NextGen Supply Chain: Unified Commerce in the Digital Age

New models present retailers with the opportunity to increase operational efficiency, improve the overall customer experience and, ultimately, to increase top line growth as a result.

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Over the last decade, e-commerce has become primary driver or retail sales. E-commerce retailers like Amazon have led this industry business model shift to improve online sales capabilities, adding increasing value to consumer convenience.  A significant trend within the rise of e-commerce has been the shift from omni-channel to unified commerce as an integration of the traditional brick and mortar store and online sales channels. This industry shift in retail to a unified commerce model presents retailers with the opportunity to increase operational efficiency, improve the overall customer experience and, ultimately, to increase top line growth as a result.

In a competitive retail landscape, e-commerce has changed the way consumers shop, forcing traditional brick and mortar stores to adapt the ways they engage their consumers. Retailers have since implemented an omnichannel model for their customer base that provides a consistent experience across all sales channels. The similar feel, design and application of such channels, including social media, mobile applications and websites, have enhanced the customer experience by further engaging the consumer across multiple platforms. This omnichannel model, however, fails to integrate the customer experience into a singular platform, which a unified commerce solution does.  With the customer as the crux of the unified commerce model, it integrates the omnichannel platform into a singular system, thus providing retailers with the opportunity to enhance operational efficiency and cater to the unique needs of the customer.

Therefore, you might ask what a unified commerce experience looks like from a retail perspective. A unified commerce solution integrates the following:

•      Technological incorporation of all sales, marketing, business operations, location and people
•      Personalization of services and products to individual consumer needs
•      Real time consumer data analytics and sales metrics for actionable insights
•      Indispensable customer service and client relationships
•      Unaffected mobile and web application performance within peak use times
•      Adaptable web design configuration across all devices and interfaces
•      Simplified checkout process and mobile payment options
•      Customer centricity is the fundamental aspect of the unified commerce model, which provides benefits to retailers and consumers alike.

Through unified commerce, retailers can leverage consumer analytics to achieve greater operational efficiency and increase profitability.  Utilizing a singular data model grants retail employees access to real time customer data like product preferences and previous purchases that lead to more meaningful customer interactions at all points of sale.  Additionally, this singularly linked, cloud-based solution allows for greater product availability and inventory accuracy by providing retailers with a full scope of their entire inventory at any given time.  By systematically knowing which locations house specific products, it allows retailers the flexibility to ship items to a consumer’s home from different locations that are not readily available in store, thus limiting lost sales opportunities.  Similarly, by leveraging real time consumer analytics, retailers will have improved forecasts of consumer demand. Having a better understanding of consumer demand and product shelf life is crucial for retailers improving the operational efficiency of their supply chain and maintaining an optimal balance of inventory.  Retailers can also integrate better point of sale technology such as self-checkouts and mobile payment applications to enhance consumer agency, reduce labor costs in store, and improve store mapping for an enriched customer experience.  These unified commerce solutions have the potential to increase retail margins by cutting the cost of inventory management, increasing inventory turnover, reducing lost sales and improving employee productivity.  Therefore, this added operational effectiveness can drive revenue growth and strengthen key sales metrics such as conversion rate and average order value by creating an exceptional shopping experience across all sales channels.

In this ever-evolving retail space, the unified commerce business model will be the prevailing retail structure that flourishes in the digital age of e-commerce.  Retailers who fail to integrate into a unified commerce model will have a difficult time competing against those that implement these solutions.  Integrating a unified commerce platform, however, presents its challenges, especially for retail conglomerates and well-established brick and mortar stores that rely heavily on their existing legacy hardware and software to drive their sales.  Adopting a fully unified commerce system will take time for retailers as initial costs to installing new infrastructure requires capital.  The long-term cost of operating a singular data model, conversely, will decrease as retail efficacy improves and healthy topline growth is achieved through sustain customer loyalty.  Furthermore, in this age of e-commerce, customers appreciate an omnichannel shopping experience; a unified commerce solution incorporates this omnichannel experience by connecting the retail store to the consumer, thus creating added value through superior convenience.

Michael Clarke is Research Associate, AutoID & Data Capture for VDC Research. He can be reached at .(JavaScript must be enabled to view this email address)


If you would like to learn more about omnichannel engagements and the shift towards unified commerce, please inquire at .(JavaScript must be enabled to view this email address). Additionally, if you would like to learn more information regarding how technology is driving the expansion of the retail space, please request access to VDC’s portal that includes more thought provoking content and industry insights.


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