As one explores the Sterling Commerce Customer Connection 2010 Conference here in Dallas, a certain observation concerning specific industry representation becomes quickly visible.  With the exception of the National Retail Federation (NRF) annual conference, few supply chain conferences have as many brick and mortar and online retailers represented than Sterling Customer Connection.  The reason is fairly obvious.  Establishing external supply chain network connections and providing seamless order capture and fulfillment is core mission critical for this business segment and Sterling and its partner network have broad associations and technology expertise across retail.  Name badges reflecting Apple, Best Buy, Home Depot, Loews, Macys, Nordstrom and many others are all in attendance. These companies have one significant common business challenge, insuring a seamless and meaningful customer buying and servicing experience among all buying channels.

At this conference, many retailers continue to emphasize that consumers are much more sophisticated in their buying patterns, and more and more of these consumers are expecting a multi-channel ordering experience.  Consumers want the flexibility to research product features, place orders directly online, and have options to pickup at a local store or have merchandise drop-shipped directly to their homes.  John Thompson, Senior Vice President for Best Buy dot com, noted in his keynote that today’s consumer seeks an integrated and repeatable interactive experience, and all channels have to be consistent in delivering that experience as a singular virtual entity. The journey, however, has to be undertaken in segments, beginning with the foundation of multi-channel operations.

In the session titled Fulfilling the Promise of Multi-Channel Commerce, Infosys consultants offered a roadmap toward achieving multi-channel commerce (MCC).  In achieving this, two building block capabilities, achieving multi-channel operations (MCO) consistency and multi-channel data integration (MCI), enable MCC.  A few weeks back, I had the opportunity to provide a guest posting on the Infosys Supply Chain Management blog. In my posting, I expanded on the notions of understanding the different needs of MCO and MCI as the essential foundation.

As most retail supply chain professionals will quickly tell you, easier said than done.  There are many moving parts and as Gopi Krishnan of Infosys often notes, “stuff constantly happens in the supply chain.” The order management system is often the one with the most integrated connections to other processes and supply chain partners, and needs for integrating pricing, promotions, planning and financial policies all come into play with MCC.

Two educational sessions, one featuring Best Buy, the other Nordstrom, provided more insights for attendees.  The importance of having a solid business process foundation is paramount.  As Best Buy pointed out, the benefits of an in-store pickup option are quickly evaporated if the inventory locator systems are inaccurate.  Drop ship can initially be an expensive proposition if suppliers are not ready to electronically interact with the process. Exchange of electronic content for order catalogs and shopping sites present format challenges.  Obtaining top management support and commitment throughout the journey and having a comprehensive and well architected implementation plan are essential.

The benefits, however, can be substantial in economic and competitive dimensions.  Best Buy indicated that the implementation of alternate store pick-up provided an unexpected significant benefit in having more efficient overall inventory turnover. The option of being able to capture a sale or not losing a customer because of location of inventory positively overcomes a lost sale. The journey for Nordstrom took two years, but the requirements insuring a Nordstrom shopping experience were stringent, and at the same time, not wanting to be a customized system.  The reward was a relatively seamless go-live, and the company is in a much better position to accommodate a sophisticated consumer.

Bob Ferrari