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Removing Roadblocks to Omnichannel 360 in Retail
Posted by Donald Soares on 20 May 2015 01:24 PM

“Nordstrom kicks its omnichannel strategy to the curb” – George Anderson, RetailWire

iStock_000049820424_MediumFew topics are as hyped up as omnichannel in Retail – or as difficult to execute successfully. Part of the problem depends on where you sit within the organization. Marketers view this as a consumer issue, in-store this is a merchandising and fulfillment issue, online this is a website design and e-commerce execution issue, and of course there is also a supply chain and fulfillment angle. Next is your IT department that views this as a complex data integration issue with huge ETL implications and a multimillion-dollar price tag to get started. More often than not your retail omnichannel strategy ultimately gets kicked to the curb! However, as indicated above, Nordstrom is doing things differently and is currently testing a store redesign that would make in-store pick up of merchandise easier to manage for consumers and the retailer.

Having a consistent view of and delivering a seamless experience to your customers across all touchpoints in-store, online, via kiosks, mobile, digital and social media is the original premise of omnichannel and it has become an even more important strategy in today’s competitive market. Consumers want to be treated as individuals and responded to consistently – regardless of channel. And, given how easy it is to compare pricing and fulfillment options online, lack of an omnichannel strategy would increase the chance that consumers may abandon their shopping carts mid-transaction and kick your brand to the curb.

So why does Omnichannel Fail? Three Major Challenges
Delivering on an omnichannel strategy requires linking consumer data with product and supply data, and delivering on a live transaction regardless of channel. You need a 360 view of the consumer, product and supply as well as the ability to manage live transactions that utilize heterogeneous data sources.

Let’s examine why this is so difficult:

  • Consumer 360: Who is Jen Dough? Simply put, most retailers don’t know who their consumers are! Consumer loyalty data for the retail store may sit in one database, while online transaction data and calls into the contact center are kept in numerous others. Each of these three data types has a specific format. To illustrate another case-in-point, consider what happens when a Convenience Store retailer’s loyalty program is not linked up to its pharmacy program nor patient visits to its in-store health clinic. If you don’t know who Jen Dough is – it’s really hard to understand why she buys, how frequently, what her preferences are, and what promotions will engage her. And you certainly aren’t going to be able to expertly advise her on nutritional information or potential drug interactions. Unfortunately for most retailers, Jen expects and requires a more consistent and meaningful interaction with you or she’ll abandon your brand for another.
  • Product 360: Can your consumers find what they’re looking for? Consumers really don’t buy products – they buy solutions. This may include recipes for dinner or a home entertainment system bought online, in-store or via mobile device. A product is a complex mix that includes the physical product and accessories, digital images, videos, recommendations and ratings, nutritional information or specs, locations, pricing and promotions – all of which need to be linked and communicated to the consumer. Consumers would also like to be able to compare and make choices across products. Whether the choice is between steaks or lasagna for dinner or an Ultra HD and Plasma TV set with the right service plan – the consumer’s path to purchase is individual and complex as they might research online, compare prices via mobile device, and finally purchase in-store. Regrettably, retailers are still stuck organizing category data around “products” i.e., an online search for wireless sound systems may yield 1,300 results that are not linked logically to enable better consumer purchasing decisions.
  • Supply 360: Making sure you’re operational: Or simply, knowing where the product is in the supply chain and fulfilling the transaction seamlessly. As this is retail, this process needs to be fully “Live” or “Operational.” If you can’t check availability, update inventory, price dynamically and suggest stocked, pick-up stores within driving distance from the consumer – you won’t succeed with omnichannel. Plus, there is also the issue that stores were not designed as distribution centers (DC) and you may want to consider redesigning yours to enable curbside pick-up just like Nordstrom is doing.

To make omnichannel work, you must be able to link consumer data with product and supply data in real-time to enable operational transactions.

Unfortunately today’s retail systems and databases just weren’t built for this challenge. Most retail database systems run on rigid, inflexible relational database (RDBMS) models first developed in 1970. Data stored in RDBMS’s is framed into a rigid schemas consisting of rows and columns prior to analysis. It’s really difficult to make changes to these schemas so RDBMS does not work well for the unstructured and constantly changing heterogeneous data associated with omnichannel. Next are the challenges inherent to complex data integration across multiple legacy systems – many of which are the multimillion-dollar dream projects for systems integrators and ETL software vendors. Finally, we’re looking at making this operational or live if it needs to work.

So, how can a retailer achieve success at omnichannel?

NoSQL Represents a Revolutionary Solution for Omnichannel
Clearly traditional mainframe or RDBMS’s lack the flexibility and scalability to handle the data volume, velocity, and variability issues inherent to omnichannel retailing.

Golbal CommunicationsTrying to combine the vast scale of structured and un-structured consumer, product, and supply data for analysis into a relational database designed for structured “rows and columns” and then using SQL (Structured Query Language) to query it – just does not work. Part of the problem here results from the dominant position incumbent vendors like Oracle and IBM hold in Retail IT departments making a radical shift difficult even when the business value proposition is clear.

NoSQL (Not Only Structured Query Language) technology represents a transformational change in perspective. Instead of getting the schema just right before doing anything else, NoSQL advocates loading up the data first and then seeing where the problems lie. This problem-oriented approach focuses on how the data will be used (queried) rather than how the data must be structured to fit within a traditional RDBMS.

For omnichannel retail, the shift to NoSQL means you would not have to spend a year trying to figure out the right data model and perfect schema to analyze and store data on consumers, products, and supply. Instead, you can load the data, have it indexed automatically, and then search and query it for emerging trends and signals.

The retail industry has surprisingly lagged behind other industries like media, financial services, and even government when it comes to using NoSQL to solve the complex operational problems associated with Big Data. But with the growing importance of omnichannel it may finally be the retail industry’s chance to get it right.

Please stay tuned for my other articles in this series:

  1. Big Data, Little Insight: Challenges for the Retail and Consumer Industries
  2. Mass to 1:1 – Reaching One Billion Consumers With the Right Message
  3. Products and Packaging in a Digital World
  4. e-Commerce – Closing the Deal with Consumers and Search
  5. Loyalty – Hype vs. Reality

Removing Roadblocks to Omnichannel 360 in Retail from MarkLogic.

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I recently had a chance to catch-up with Bill Fox, MarkLogic’s new Vice President of Health Care and Life Sciences, to ask for his thoughts on a special Healthcare IT briefing he recently attended at the White House. According to Bill, the Administration is calling on technology companies to get involved in the development of fast, nimble apps that can be deployed quickly across underserved health populations …

National Health IT Collaborative for the Underserved

Bill Fox received an exclusive invitation to attend the briefing on Advancing Health Equity With Technology and Innovation at the White House. This briefing was a part of the National Health IT Collaborative for the Underserved (NHIT) Summit held in Washington D.C. in April 2015. The discussion at the briefing addressed the concern that many health apps coming out of Silicon Valley, in particular consumer engagement health apps, fail to take into account the very people who need them most – those from traditionally underserved communities. Further, techy people (e.g., readers of TechCrunch) that create and evaluate these health apps are likely to have good jobs with health insurance. They aren’t the target audience for these applications. So even though there has been a tremendous activity in the development of payment and population health apps, if the apps leave out those that need it most, the solution isn’t built on a sustainable healthcare model.

The idea raised by the CTO of the U.S. Department of Health and Human Services (HHS), Bryan Sivak, and DJ Patel, Chief Data Scientist for the Obama Administration, was to create technology solutions that could reach these underserved populations and then refer those individuals to providers who can leverage new billing codes aimed at wellness and chronic disease management. The gist here is that tech and population health companies should develop healthcare apps that improve the quality, consistency and access to care for underserved populations and by doing so would also create a financial boon for their own businesses. The White House recognizes the creative energy and vision coming out of the technology industry and is trying to promote and encourage business innovation through serving the populations most in need.

Healthcare: Change Is in the Air on Cultural, Technology Fronts

iStock_000060390742_MediumThe call for healthcare technology applications to be developed in this more inclusive model is indicative of the recent cultural and legislative shift in the healthcare industry. Under the still dominant strict fee for service world, there is no financial incentive for the provider to discourage a patient with diabetes from coming into the office, or ER, again and again. Because, in the past, if this person visited the ER ten times a year, it wasn’t a problem, and in fact was highly profitable. Now, however, there are readmission rules stating that if a patient gets readmitted for the same condition within a certain amount of time – providers/hospitals won’t get paid for that patient’s care. This is the transformation that the federal government is looking to drive and, for technology companies, it will necessitate a basic shift in thinking about application design principles. The questions tech companies need to ask is Who really needs this app? And who is going to get the most use out of it?

NoSQL’s Agile, Enabling Technology to Play Key Role

MarkLogic provides a database environment that enables value to be extracted from data quickly and less expensively, whether that data sources are simple or heterogeneous and complex. It is very difficult for healthcare organizations to integrate all of the information about a patient into a useable form. MarkLogic can help by equipping healthcare organizations to consolidate and query data, even if it’s stored in twenty different legacy systems using twenty different schemas. And by enabling this, MarkLogic solves more than just the technology challenges of a healthcare organization, it also helps overcome the entrenched thinking of those working with legacy systems and the culture of inertia that often goes right along with it.

In the briefing, the government communicated a genuine willingness and desire for both large and small businesses to get involved in the development of fast, nimble apps that can be deployed quickly across underserved health populations. MarkLogic is poised and ready to provide the flexible database technology that will play a key role in making this endeavor a success.

Tech Companies Poised to Win With Healthcare Apps Designed for Underserved Populations from MarkLogic.

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