is your omnichannel strategy driving customers away?€¦ · is your omnichannel strategy driving...

Is Your Omnichannel Strategy Driving Customers Away?

Featuring:Bob Heaney, Aberdeen Group

Brent Halverson, ecmarketTom Gale, Modern Distribution Management

Sponsored by:

Speakers

Bob HeaneyResearch Director

Aberdeen Group

Brent HalversonPresident & CEO

ecmarket

Tom GalePublisher

Modern Distribution Management

• Introduction – Tom Gale

• Presentation – Bob Heaney

• Presentation – Brent Halverson

• Q&A – All

• Close – Tom Gale

Agenda

IS YOUR OMNICHANNEL STRATEGY DRIVING CUSTOMERS AWAY?

October 29, 2015

Bob Heaney, Research Director AberdeenPrincipal Analyst Retail, Wholesale, and eCommerce

Brent Halverson, President & CEO ecmarket

5

BOB HEANEY

Research DirectorSupply Chain, Retail and eCommerce

Over 25 years of distinguished leadership experience in research, analysis, and advisory roles

• Coverage area within Aberdeen includes various elements of Wholesale, Retail, and Supply Chain

• An industry insider and internal advisor to company executives

• Active in designing, reengineering, selling, and transforming B2B and B2C business processes and the end-to-end supply chain for Fortune 500 companies

FEATURED SPEAKER

6

TODAY’S AGENDA

1. Methodology and Business Context2. Key Pressures and Actions3. Automation Advantages of Leaders4. Hidden ROI of Omni-channel Orders5. Case Study Examples6. Key Takeaways, Recap, and Q&A


ABERDEEN RESEARCH METHODOLOGY

8

ABERDEEN MATURITY CLASS FRAMEWORKDEFINING THE BEST-IN-CLASS

Selected Performance Criteria (KPI)

Organizational Goals

Employee Performance

Bench Strength

Total Respondents

- Top 20%

- Middle 50%

- Bottom 30%Respondents are scored individually across KPI

Best-in-Class

Industry Average

Laggard

9

UNDERSTANDING WHAT IT TAKES TO ACHIEVE SUCCESS

What you need to do to become Best-in-Class: What processes you should have

in place

What you need to measure

Organizational changes you might want to make

Data / knowledge management considerations

Technologies you should evaluate

Best-in-Class

Industry Average

Laggard

P A C E

10

CLASS MATURITY DEFINITIONDefinition of Maturity

ClassMean Class Performance

Leaders:

Top 30% of aggregate performance scorers(28 companies)

95.4% of outbound orders delivered to customers complete and on-time

94.6% of orders received from suppliers complete and on-time

0.5% decrease in total landed per unit costs in the past year

7.5% decrease in the frequency of out-of-stock inventory in the past year

Automation Followers:

Bottom 70% of aggregate performance scorers(67 companies)

86.4% of outbound orders delivered to customers complete and on-time

84.8% of orders received from suppliers complete and on-time

8.5% increase in total landed per unit costs in the past year

0.9% increase in the frequency of out-of-stock inventory in the past year

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ABERDEEN’S RESEARCH METHODOLOGYPACE: END-USER INVESTIGATION

PRESSURES ACTIONS CAPABILITIES ENABLERS

External and internal forces that impact an organization’s market

position, competitiveness, or

business operations.

The strategic approaches that an

organization takes in response to industry

pressures.

The business capabilities (organizational, process, knowledge management etc.) required to execute

corporate strategy.

The key technology solutions required to

support the organization’s business

practices.

What is causing organizations to think

differently?

What strategies are they using to respond

to pressures?

Why are they achieving greater success?

What technologies and services are enabling

them to succeed?

!

12

TODAY’S AGENDA



13







pressures.


corporate strategy.



practices.


differently?


to pressures?



them to succeed?

!


14

Raw MaterialsSupplierComponent

Supplier

Ocean carrier

Retail Store

RetailStore

Customers

Global Air

Global DC

Home Delivery

International visibility from satellites and cloud technology010101

DEMAND

SUPPLY

Global DC

Raw MaterialsSupplier

ComponentSupplier

Global Demand-to-Fulfill Logistics Flows:

15

15%

38%

43%

53%

56%

60%

61%

0% 20% 40% 60% 80%

We plan to add capabilities in other areas notchecked

Shipping Direct-to-store

Shipping through a Free Port, Freeport Zone,FTZ for customs

Shipping through a break-bulk facility (i.e.Cross Dock, Transload, or DC Flowthru Facility)

Shipping through Vendor DC bypass, 3PL or e-Fulfillment provider

Shipping to or through a TraditionalDistribution Center

Shipping Direct-to-Consumer

Percentage of Respondents n=137Channel %

Source: Aberdeen, November 2014

Profit Pressures-B2B and B2C ConvergenceNew Order-to-Fulfill Logistics Flows

New Channels: In all of our studies during the past 5 years, for both B2B and B2C companies alike, the traditional distribution center (DC) ranked as the primary logistic format. This is changing, as shipping direct-to-consumer becomes equally dominate and the lines between segments blur.

16


Supplier

Ocean carrier

Retail Store

RetailStore

Customers

Global Air

Global DC

Home Delivery

010101

DEMAND

SUPPLY

Global DC


ComponentSupplier

Profit Pressures-B2B and B2C Convergence Flows:

International visibility from satellites and cloud technology

17


Supplier

Ocean carrier

Retail Store

RetailStore

Customers

Global Air

Global DC

Home Delivery


DEMAND

SUPPLY

Global DC


ComponentSupplier


61%

18


Supplier

Ocean carrier

Retail Store

RetailStore

Customers

Global Air

Global DC

Home Delivery


DEMAND

SUPPLY

Global DC


ComponentSupplier


60%61%

19


Supplier

Ocean carrier

Retail Store

RetailStore

Customers

Global Air

Global DC

Home Delivery


DEMAND

SUPPLY

Global DC


ComponentSupplier


60%61%

56%Dc Bypass Vendor/3PL

20


Supplier

Ocean carrier

Retail Store

RetailStore

Customers

Global Air

Global DC

Home Delivery


DEMAND

SUPPLY

Global DC


ComponentSupplier


60%61%


21


Supplier

Ocean carrier

Retail Store

RetailStore

Customers

Global Air

Global DC

Home Delivery


DEMAND

SUPPLY

Global DC


ComponentSupplier


60%61%


43%Free Port, FTZ

22

Multi Channel Logistics Flows: Evidence of Convergence

• 60% Shipments to and through a distribution center– Was 75%-80% 2-3 years ago

• 61% Shipments direct-to-customer– Was 45%-50% 2-3 years ago

• Now they are both almost equal at 60/61%

• Fundamentally moves B2B from bulk to single shipments at execution

23

Pricing has become more important

Need to create tailored, specific, precision merchandise assortments for customer segment and channel

Need to increase gross margin

88%

54%

32%

3 ADDED pressures that are vying for optimization….

24








pressures.


corporate strategy.



practices.


differently?


to pressures?



them to succeed?

!

25

The Business Case:Addressing the challenge of the convergence of B2B and B2C requirements

Defining and Understanding the Impacts: The trend of companies shipping direct-to-customer vs. to, or through, a distribution center continues to accelerate

The New Logistics Formats: Confirm B2B and B2C convergence is changing how Best-in-Class companies must orchestrate their demand-to-fulfill process

A "Call to Action": To address the B2B/B2C demand-to-fulfill process reengineering

There is a growing challenge that companies face in the convergence of B2B and B2C requirements, which constitutes a Call to Action for today’s business executive across retail, wholesale, manufacturing and eCommerce industry segments, as the lines become more blurred.

B2B and B2C Convergence – a Call to Action

26

NEW IMPACTS AND CALL TO ACTION

80% of wholesale distributors say that they are concerned about the impact to costs and profitability with more B2C orders

Increase in order density and the growth in B2C order types Labor/shipping costs due to the introduction of more split case

quantity fulfillment and parcel delivery Compression in the order to deliver cycle time that comes with

matching same day and 2 day delivery for the new B2C orders Manual and special offline processing as traditional B2B EDI

systems are supplanted by more complex manual flows like email/fax and phone orders

27








pressures.


corporate strategy.



practices.


differently?


to pressures?



them to succeed?

!

28

TODAY’S AGENDA



29

MANUAL IMPACTS AND CALL TO ACTION

In the 3 year period the number of wholesalers processing manually (email /fax /phone) decreased by;

34% on B2B orders

24% on B2C orders

The Top 30 Automation Leaders in 2014 are:

350% more likely to automate via portal for B2C orders

333% more likely to automate via portal for B2B orders• …compared to Bottom 30 Automation Followers in 2011

30

TOP PERFORMERS ARE …..3.5X MORE LIKELY

TO AUTOMATE ONCE MANUAL ORDERS

• Forcing your customer to place orders through your website may be counterproductive and open the door for web browser based pricing comparisons. Caution, ask yourself:

• Is Your Omni-Channel Strategy Driving Your Customers to Shop Competitors?

31

IS YOUR OMNI-CHANNEL STRATEGY DRIVING YOUR CUSTOMERS TO SHOP

COMPETITORS?B2B customers would prefer not to have to enter both

into their own PO system and then reenter line by line using the sellers web portal.

The browser based portal is a target for shopping banners, for specific items and prices, with links to buy from a competitor’s shopping website.

Product items and descriptions are saved in cookies marketed by search engines like Google and Bing to target and entice your customers to comparison shop.

32








pressures.


corporate strategy.



practices.


differently?


to pressures?



them to succeed?

!

33

TODAY’S AGENDA



34

HIDDEN ROI OF A STREAMLINED CLOUD-READY AUTOMATED SOLUTION

Cash to Cash Conversion - Calculated as the sum of: + Days Inventory Outstanding (DIO) - the current inventory level and how many days are required to sell this inventory+ Days Sales Outstanding (DSO) - the current sales and the amount of days it takes to collect the cash from these sales Less: Days Payables Outstanding (DPO) - the average number of days before inventory debt must be paid back to vendors

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36



37



38



39



40



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BENEFITS AND ADVANTAGES :TOUCHLESS ORDER AUTOMATION

350% higher likelihood to automate B2C orders via customer portals and sales order automation solutions

-12.5 days Cash to Cash Cycle versus +24.4 days on B2B orders on credit

100% order accuracy from email/fax or PO entry via cloud-based automated conversion vs as low as 70% manual

500% increase in touchless orders with no manual intervention. Staff redeployed to handle rush orders and problem solving

2.5 days B2C order to cash/delivery vs 39.4 days on B2B orders bought on credit

Automation (top 30%)Leaders deliver:

as compared to Followers.

42


350% higher likelihood to automate B2C orders via customer portals and sales order automation solutions





Automation (top 30%)Leaders deliver:


43

350% higher likelihood to automate B2C orders via customer portals and sale order automation solutions





Automat ion (top 30%)Leaders deliver:



The bottom line: The most automated wholesale companies have transformed, as they move to address B2C/B2B Convergence and automate ‘manual’ processes to uncover hidden ROI in Cash to Cash conversion cycles with “negative inventory”.

44

350% higher likelihood to automate B2C orders via customer portals and sale order automation solutions





Automat ion (top 30%)Leaders deliver:



Sales Order Automation leaders (top 30%) are delivering superior results (below) and are more operationally ready to address the quicker order-to-delivery cycles in new B2C and B2B order flows that convert/automate without touches.

.

45

AUTOMATING B2B AND B2C ORDER FLOWS BY CUSTOMER DELIVERS

3.5 x improvement in order throughput

Obtain 100% accuracy, and reduce manual intervention.

Compete with 2 day delivery standards

Capture the hidden ROI associated with negative cash to cash conversion cycles

46

TODAY’S AGENDA



47

BRENT HALVERSON

President & CEO, ecmarket

Over 20 years of distinguished leadership experience• As President and CEO, Brent leads the overall strategic

direction of ecmarket and is responsible for developingthe business plan and driving success in all areas of thebusiness including product, finance, support, services,sales and operations.

• Recognizing that the needs of wholesale distributors werenot being met by existing solutions, Brent has led theproduct strategy and vision behind Conexiom to ensurethat it is the only service that delivers 100 percent dataaccurate, sales order and invoice automation. Brentbrings more than 20 years of senior managementexperience in product management, finance, operations,and research and development in the high-tech industry.

FEATURED SPEAKER

48

TODAY’S AGENDAProfitable Omni-Channel Commerce and B2B/B2C Fulfillment

1. Methodology and Business Context2. Key Pressures and Actions3. End-to-End Event-Driven Capabilities4. Mobility and Event-Driven Enablers of

the Leaders5. Case Study Examples6. Key Takeaways, Recap, and Q&A

49

• Challenge– Introduce a solution for inbound order processing for

customers that did not have the resources to implement EDI

• Solution– Captures purchase orders that were faxed and emailed

and transforms and delivers them as EDI orders• Key Results

– Improved order accuracy– Faster order processing– Improved employee productivity– Greater customer satisfaction

50

• Challenge– Manually re-keying orders downloaded from the portal of

one of their largest customers costing one FTE 2-3 hours/day

• Solution– Automation saved over 400 hours of labor costs for one

customer and automatically processed over 11,000 orders for a single customer

• Key Results– 99.96% correct shipping rate– Refocus staff on high value business priorities– Improved customer service and loyalty– Saved thousands of hours annually

51

• Challenge– Eliminate dual entry requirements of customers creating

PO in their system and again in Wacker’s portal

• Solution– No change to customer’s current order process: over

50% of customers place orders via email

• Key Results– Increased efficiency– Improves order accuracy– Place orders 24/7– Full transparency

52

TODAY’S AGENDAProfitable Omni-Channel Commerce and B2B/B2C Fulfillment

1. Methodology and Business Context2. Key Pressures and Actions3. End-to-End Event-Driven Capabilities4. Mobility and Event-Driven Enablers of

the Leaders5. Case Study Examples6. Key Takeaways, Recap, and Q&A

53

KEY TAKEAWAYS

• Omni-channel B2B Convergence with B2C is here• New Order to Deliver flows provide the evidence• The Impacts – Order management through

Fulfillment• Fundamental Automation capabilities are lacking –

even for Leaders• CALL TO ACTION – Get ready now!!

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Only process changes and adequate investment in all areas of automation to answer the B2C order flows and sales automation …

will provide the necessary clarity to make decisions that are worthy of the investment dollar and that are transformational in nature

CONCLUSION

THANK YOU, ANY QUESTIONS?

For more information on this and other topics, please visit aberdeen.com

[email protected]

@BHanalyst

http://www.linkedin.com/in/bobheaney1

http://www.linkedin.com/in/bobheaney1


Featuring:Bob Heaney, Aberdeen Group

Brent Halverson, ecmarketTom Gale, Modern Distribution Management

Sponsored by:

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