Article Series

Unified Commerce: Implications on Traditional Back Office Systems

Unified Commerce: Implications on Traditional Back Office Systems Part 7

Apr 16, 2017
   |   by 
Rick Boretsky

In this blog series, we’ve examined each of the cornerstone back office systems to reveal the issues in integrating them to world of unified commerce. This blog focuses on the new challenges Unified Commerce places on CRM, or Customer Relationship Management applications.

Old world CRM

Traditionally CRM systems were developed to manage direct mail and email campaigns based on customers’ purchasing history, loyalty, and demographics. These systems were often used to manage customer loyalty programs as well.

The underlying premise of CRM is that retailers “manage” their customer relationships based on information collected from three interactions.

1. Point of transaction.

Originally this meant POS, but now means POS, Mobile, Web, OMS, Call Center.

2. Promotional offer

When the customer was targeted for some specific promotion.

3. Promotional response

When the customer responded to the promotional offer through some purchasing behavior.

Retailers with loyalty programs added two more interactions:

1. Loyalty signup

When the customer joined the loyalty program and provided some additional information about themselves

2. Loyalty redemption

When the customer took advantage of some benefit of the loyalty program.

As such, many of our retail clients have built up huge customer files with years of purchasing history. The challenge is how to make this vital information relevant in the world of Unified Commerce where most shoppers are rapidly changing their shopping habits.

What’s different in Unified Commerce CRM?

In Unified Commerce, CRM takes on the considerable additional responsibility of managing the “Customer Experience” as an integral part of managing the overall customer relationship. This means CRM moves from a back-office tool used by the marketing department to one used by everyone engaged in the commerce itself. Unified Commerce CRM must make sense of the full complexity and disruptive nature of customer engagement in the digital world. Think of old world CRM as an orchestra with a few instruments playing familiar tunes in harmony. Unified Commerce suddenly expands the orchestra to include strange new instruments with experimental musicians improvising in different keys.

As the infographic illustrates, we are experiencing an explosion of digital customer touchpoints for retailers to leverage to capture vital data and get direct customer feedback. We find it useful to categorize these touchpoints in four broad categories: (1) Building Awareness, (2) Exploring Possibilities, (3) Shopping, and (4) Post shopping. In our next blog series, we will discuss the integration challenges of each of the dozens of new digital commerce interactions which together frame the Unified Commerce customer experience.

Industry visionaries and many retail CEOs want their touchpoint applications to quickly evolve in order to deliver effective personalized promotional messages, suggestive selling recommendations, and foster community-wide loyalty.

If CRM is to provide this level of orchestration, these interactions must be captured and analyzed. It’s up to CRM to make sense of the customer response. Otherwise, all the members of the orchestra – social apps, social media, web site, kiosk, call center, and POS – will be playing different songs, in different tempos and at different volumes. The customer won’t be able to make sense of the resulting cacophony.

The challenge is data integration

According to the Boston Retail Partners 2017 study on POS and Customer Engagement, most retailers (71%) see themselves replacing their range of front end systems with a fully integrated new platform. But these systems are not yet available in the market and will require huge investments. Another complimentary strategy is to integrate the new world with the old CRM systems. Most CRM systems we’ve seen are extremely configurable. Attributes can be assigned to customers, transactions, promotions, shopping locations, and customer segments. A wide variety of transactions can be classified and stored. Notes can be housed. Through the magic of data integration, old batch systems can be revitalized to receive near real-time feeds. And customer information can be securely exposed across the enterprise to enhance the customer experience at every opportunity. The trick is to track back to the source to find out how these attributes can hitch a ride on your data flow. Unified Commerce CRM must ultimately make sense of how each customer, and customer segment, is responding to your digital innovations.

Our Recommendations

1. SINGLE DATA MODEL. Before abandoning your old CRM, enrich your data model to include attributes that characterize each customer interaction and more robustly define the customer shopping patterns.

2. EXPOSE CUSTOMER INFORMATION across the enterprise — merchants, store operations, digital commerce, planning.

3. INTERCONNECT CRM with every digital touchpoint from dressing rooms to instore pickup, from gift registries to customer surveys, from mobile apps to digital advertising.

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