6 march 2014 digital commerce mis 310 class lecture
TRANSCRIPT
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6 March 2014
Digital Commerce MIS 310 Class Lecture
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Kyle O’Connor, Manager - Deloitte Digital
• Road Warrior• Deloitte Digital out of the LA Office• Specialize in Consumer Retail
• MSIS, Kelly School of Business (Indiana University), 2005
• BS Informatics, Indiana University, 2004
• Recently married to high school sweetheart Lindsey• Avid hiker, biker and kayaker• Two rescue dogs – June and Tessa
• Eight years of consulting experience
Jul ‘06 – Mar ’07 Analyst
Apr ’07 – Mar’09 Consultant
Apr ‘09 – Aug ’11Sr. Consultant
TodayManager
Prior Deloitte
Internships – GE Insurance and Accenture
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Client Experience and Background
BTA and Consultant
Senior Consultant
ManagerConsultant
2006
2014
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2
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Creative
• Visual design
• Front-end development
• Graphic design
• Illustration
• Creative and experience strategy
User experience
• User research
• Content strategy
• Information architecture
• Interaction design
• Usability and analytics
Our teams are all about creating
digital experiences that make
sense for our clients’ businesses
and keeping their users coming
back for more. We bring together
the best parts of a small creative
agency and a large IT consultancy
to offer end-to-end solutions
grounded in our core capabilities.
Our breadth and depth of
capabilities ensure that we deliver
beautifully designed and cutting-
edge technology solutions paired
with real business value.
Strategy
• Mobile strategy• Visioning workshops and roadmaps• Web and eCommerce strategy• DCM strategy• Concepts and prototypes
Quality assurance
• Business and risk analysis
• Testing strategy development
• Automated and manual testing
• 3rd party service validation
• 3rd party test management
Engineering
• iOS app engineering
• Android app engineering
• JEE, Jave, ObjC, Ruby, etc.
• Oracle, SQL, MySQL, etc.
Management
• Engagement management
• Project management
• Large scale transformation
Global
• Global presence around tax, enterprise risk, and consulting services
Deloitte Digital
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Agenda
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Deloitte Digital Overview
What is Digital Commerce?
What are the major consumer trends?
What are the challenges?
How can businesses be successful?
What is an eCommerce Platform and who are the major players/vendors?
Bonus Round: Stuff I think is Cool
Q & A
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Learning Objectives
A high-level lecture that introduces MIS 310 students to the trends in
digital commerce. The lecture will discuss the components of digital
commerce and how they fit together to drive shareholder value and
meet customer expectations. Participants will be introduced to digital
commerce vendors, trends and an overview of Consulting
Purpose
• Describe what Digital Commerce is and the industry trends impacting Digital Commerce
• Explain the challenges organizations are facing in digital Commerce
• List the leading solution providers (vendors)
By the end of the lecture, practitioners will be able to:
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Polling Question: Shopping Behavior
How do you primarily shop?
a) Storesa) Stores
b) Onlineb) Online
c) Mobilec) Mobile
d) Alld) All
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What is Digital Commerce?
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Dropping the E in eCommerce - The Retail Commerce Transformation
The PastPhysical Store
The Recent PasteCommerce
The PresentCross-Channel
The Future Commerce
Increasing technical, social, and behavioral connectivity is changing
the way consumers interact with enterprises, channels and each other. Tomorrow’s connected
consumers will expect functionality at the point of need.
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Refers to activities in which businesses or consumers – use digital channels to identify
supplies, purchase products, complete financial transactions, and/or obtain services.
As commerce evolves, the lines between digital and physical channels are blurring and the ‘connected consumer’ is no longer a futuristic view of the retail shopper. The goal for businesses is to bring a seamless shopping experience to customers regardless of the touch point or channel.
What is Digital Commerce?
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What consumer trends have you observed?
Polling Question: Consumer Trends
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Major consumer trends
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Changing customer expectations are forcing businesses to develop new capabilities
1. Ship to Store
2. Buy Online, Pickup in Store
3. Endless Aisle
4. Seamless Customer Service
5. Advanced Delivery Options
Key Capabilities Required* 1 2
1 3
2 4
3
3
* Sample customer facing capabilities to enable Digital Commerce
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Ship to Store
Example•Wal-Mart - Site to Store
•Site to Store is a free service that lets you ship your online order to any Wal-Mart store in the contiguous United States.
What it is•Basic step in enabling Digital Commerce•Allows businesses to ship a customer’s online order to a participating store location•Offers customers the convenience of picking up their online/ digital order in a store without paying for shipping.
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Ship to Store
Why it is important•Provides “free” shipping options to customers•Easiest capability to implement since businesses can modify existing supply chain processes to include customer orders with store replenishment deliveries•Drives traffic to the store. Customers who go to pick up their shipment can be enticed to make additional purchases in store•Reduces additional shipping and handling costs for businesses
Challenges•Long delivery time for customers since customer orders are packaged along with scheduled replenishments•Does not leverage inventory that may be available in stores
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Buy Online, Pickup in Store
What it is•Advanced capability in enabling digital commerce•Allows customers to place an online order and find a participating store location where they can pick up their order•Offers customers the instant gratification of picking up their online/ digital order the same day without paying for shipping
Example•Best Buy –BestBuuy.com In-store Pickup•The Container Store – Click & Pickup•Wal-Mart – pick up today
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Buy Online, Pickup in Store
Why it is important•Provides “free” shipping option to customers•Supports “instant gratification” for customers who do not want to wait for their order to ship•Takes advantage of inventory in a store to fulfil a customer order•Drives traffic to the store. Customers who go to pick up their shipment can be enticed to make additional purchases in store•Businesses achieve a view of inventory across all locations and can start to move product to locations that sell products faster
Challenges•More complex implementation than simply shipping to a store•Requires visibility to and confidence in inventory positions in stores•Requires confidence in ability to reserve and promise inventory in stores to customers
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Polling Question: Consumer Trends
Have you ever picked a product up at a store that you bought online? (What was the process?)
YesYes
NoNo
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Endless Aisle – The Long Tail
What it is•Most advanced capability in enabling Digital Commerce•Allows businesses to offer the entire assortment of products to a customer regardless of where the customer is shopping (digital or physical)•Leverages kiosks, mobile devices for associates and enhanced POS devices to “bring digital inside the store”•Offers customers the convenience of shopping at any “touch point” or channel
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Example•Nordstrom – Endless Aisle•Home Depot– Endless Aisle•Kmart – Store to Home and availability check
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Endless Aisle
Why it is important•Provide customers ability to purchase anything a company offers regardless of physical location•Businesses can make their entire assortment available and can manage inventory effectively•Businesses have the ability to fulfill from the most cost effective and efficient location based on customer need
Challenges•Significant complexity•Requires visibility to and confidence in inventory positions in stores, warehouses and inventory nodes (vendor managed, etc.)•Requires confidence in ability to reserve and promise inventory to customers regardless of inventory node•Requires enterprise-wide alignment on inventory allocation and management•Requires anyone interacting with customers (store associate, call center, etc.) to be familiar with more products
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Fulfillment Centers
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Seamless Customer Service
What it is•Ability to provide real-time access to customer service regardless of channel•Ability to provide consistent and seamless service experience to customers across all “channels”•Ability to provide visibility to customer order history to associates and empowering associates to address a customer’s questions regardless of channel
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Example•J.Crew - Click-to-Chat, Self service•Nordstrom – LiveChat, Self service•Burberry – Clienteling iPad app•Chicos – personalized campaigns
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Seamless Customer Service
Why it is important•Improves customer retention and reduces lost sales due to unsatisfactory customer service•Builds loyalty with customers by supporting a superior and more efficient resolution to issues or questions•Consistent and effective self-service options can lower cost to serve per customer and streamline the customer experience (no more waiting in line or on the phone)•Reduces costs by using more effective customer appeasement e.g. not offering a flat $10 off next purchase to every customer who calls with an issue
Challenges•Lack of consolidated customer and order data•Providing consistent information to associates across all channels•Need appropriate training and incentives for sales associates to gain customer knowledge
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Advanced Delivery Options
What it is•Ability to support a range of options pertaining to the method, speed, and location of delivering a product•Providing customers with the ability to customize their delivery to fit their current needs from a physical and geographical stand point•Options offered and certain ones incentivized
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Example•Amazon – Amazon Locker, Release-Date Delivery, Local Express Shipping•Nordstrom – Same Day Delivery
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Advanced Delivery Options
Why it is important•Offers customers flexibility to choose a delivery option or location provides an improved customer experience•Convenience and flexibility can be competitive differentiator in attracting new customers who may not traditionally have made the purchase
Note: With Amazon expanding “Same Day Delivery” services, retailers will face tremendous pressure to match the service
Challenges•Expensive•Robust supply chain to ensure products can be delivered to desired location•Likely need partnerships with external service providers to ensure an easy pickup process
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Polling Question: Consumer Trends
Which of the following was NOT a consumer trend discussed?
a) Advanced Delivery Options
a) Advanced Delivery Options
b) Couponingb) Couponing
c) Seamless Customer Service
c) Seamless Customer Service
d) Shop to Store
d) Shop to Store
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Learning Objectives Check
Describe what Digital Commerce is and the industry trends impacting Digital Commerce
• Explain the challenges organizations are facing in Commerce Enablement
• Discuss how businesses can succeed• Describe eCommerce platforms and major vendors• Talk about cool stuff
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Why is it so difficult?
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Meeting the demands of today’s consumer is very challengingTo provide Omnichannel experience, retailers must meet consumers’ demands at the point of need, through the most conveniently accessible channel, in the most cost efficient manner and yet provide consistent brand experience across channels.
Customer
Today customer’s use all channels simultaneously and want to buy anywhere and return anywhere
In order remain competitive in the marketplace, retailers must optimize and rationalize their supply chain commerce processes
and platforms
Omnichannel RetailBuy Anywhere, Return Anywhere
Efficient Inventory Management
Order Visibility Across Channels
Fulfill Anywhere
Optimized Logistics
Needs
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Typical Business ChallengesTo Implement “Digital” Commerce companies have to not only deal with technology challenges but also with people and process challenges
• Are the business processes consistent across channels?
• Is there cross channel visibility?
• Has your technology kept pace
with changing business needs and the competition?
• Is your technology well integrated?
• Are your people trained well to use new technology?
• Does the organization have strong change management?
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Typical Process Challenges
• Setting up products separately by channel complicates selling of the full assortment
• Buying inventory by channel can lead to overbuying and does not leverage economies of scale
• Inability to offer standard self-service features across channels
• Inability to offer a seamless and consistent experience to the customer across channels
• Inability to consistently implement business capabilities to support fulfillment of customer orders
• Inability to see incoming inventory and stage it at the appropriate location to meet demand
Lack of standardized
processes across channels
Lack of visibility into orders
across channels
Lack of visibility into inventory
across channels
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Typical Technology Challenges
• Inability to share data across channels and touch points prevents customers and associates do not have visibility to information
• Inability to share capabilities leads to duplication of capabilities across channels
• Old or inflexible framework complicates implementation of new technology and processes
• Lack of robust systems hinders the creation of a consistent and seamless customer experience
• Systems and technology implemented without focusing on business value leads to missed requirements
• Inability to implement business capabilities consistently across channels prevents a seamless customer experience
Lack of Integrated Systems
Antiquated Systems and Architecture
Technology Strategy not Aligned with
Business Needs
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Typical People Challenges
• Inadequately trained associates prevents the adoption of standard processes and leads to an inconsistent experience
• Unwillingness of older staff to adopt new processes leads to inconsistent implementation of capabilities and an inconsistent brand experience
• Lack of timely communication across the organization leads to inconsistent implementation of business capabilities
• Lack of consistency across channels leads to inconsistent information to the customer and a poor customer experience
• Channel-specific, “siloed” incentives and reporting inhibit consistent measurement of business capabilities
• Lack of alignment leads to inconsistent implementation of business processes and capabilities
• Duplication of activities across channels leads to higher costs
Lack of Change Management
Communication Challenges
Lack of Top Level Alignment
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Polling Question: Challenges
Which of the following challenges do you think companies struggle with the most?
a) Processa) Process
b) Technologyb) Technology
c) Peoplec) People
d) Depends on the Company
d) Depends on the Company
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Learning Objectives Check
Describe what Digital Commerce is and the industry trends impacting Digital Commerce
Explain the challenges organizations are facing in Commerce Enablement
• Discuss how businesses can succeed• Describe eCommerce platforms and major vendors• Talk about cool stuff
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How can businesses succeed?
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Focus on the future to ensure success
“I skate to where the puck is going to be, not where it has been”
- Wayne Gretzky
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Focusing on the future requires a fine balance
1. Near-term Requirements
2.
Str
ate
gic
l C
ap
ab
ilit
ies
Businesses must balance investment in near-term requirements, with investments required to develop strategic capabilities to
position for long-term trends and business pressures
Strategic focus on positioning for future
Tactical focus onbusiness requirements
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End-to-end commerce enablement
Partner System(s)
Direct Platform
Inventory
Distributed Order Management (DOM)
Retail/Wholesale Fulfillment
Direct Fulfillment
POS System(s) Store Fulfillment
Mobile
Website
Stores
Contact Center
Enterprise Inventory Management
• Central view of Inventory and Availability
• Flexible inventory availability rules
Wholesale1
Wholesale1
Orders Order Lines
Inventory
Order Lines
Inventory
Order Line
Orders
Orders
Order Capture Channels
Order Fulfillment & Logistics
Inventory
Inventory
Inventory
US Stores
3PL
Order Line
Inventory
Planning & AllocationEnterprise Operations
• Cross channel view of demand and fulfillment
• Enterprise planning and allocation
Transactional Messages to
Customer
Drop ship Fulfillment1
Inventory
Order Line
Enterprise Order Management
• Central order history and status• Pricing and promotions• Product catalog / items• Flexible fulfillment rules and
assignments• Payment settlement
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Digital Platforms
Contact Center
Mobile
Website
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Learning Objectives Check
Describe what Digital Commerce is and the industry trends impacting Digital Commerce
Explain the challenges organizations are facing in Commerce Enablement
Discuss how businesses can succeed• Describe eCommerce platforms and major vendors• Talk about cool stuff
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What is an eCommerce Platform and who are the major players/vendors?
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The eCommerce platform vendor landscape
Source: 2013 Internet Retailer’s Top 500 Guide
IBM Websphere Market Presence # of 2013 Top US 100 retailer clients: 17 Representative clients:
Oracle Commerce Market Presence # of 2013 Top 100 US retailer clients: 19 Representative clients:
48% of the Top 50 Internet Retailers use IBM Websphere,
Hybris (SAP) or Oracle Commerce as their base
eCommerce Platform to build their digital experience
Hybris (SAP) Market Presence # of 2013 Top US 100 retailer clients: 1 Representative clients:
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eCommerce Platform Analogy
Base Platform consists of core components (e.g. Engine and Frame) that allow you to customize the look and feel of your eCommerce site and build new options into the customer experience.
eCommerce platform overview – A Car analogyAn eCommerce platform is a technology that organizations leverage to build virtual storefronts, both websites and mobile applications that are used to sell products and services.
Customized Unique Look and Feel
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Enterprise Global eCommerce Platform
Enterprise grade global eCommerce platform overviewAn eCommerce platform consists of a set of core capabilities, tools and frameworks that allow a company to create their unique branded look, feel and online customer experience.
Platform Development Toolkit
Core Platform Business Capabilities
Development Environment
IntegrationBusiness Logic
API’s
Frameworks
Data Models
Product Management
Promotions
Pricing
Search
Service
Order Management
Global multi-sites
Security and Compliance
Personalization
Shopping cart
Tax and Order Calculation
Customer Master
3rd Party integrations
Promotions Engine
Email Marketing
Point of Sale
Enterprise Back-office
Social
Products and Reviews
Payment Processing
Custom Code and Integrations
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Polling Question: Vendors
Which of the following is NOT a vendor that has a software solution in this space?
a) IBMa) IBM
b) Oracleb) Oracle
c) SAPc) SAP
d) Appled) Apple
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Learning Objectives Check
Describe what Digital Commerce is and the industry trends impacting Digital Commerce
Explain the challenges organizations are facing in Commerce Enablement
Discuss how businesses can succeed Describe eCommerce platforms and major vendors• Talk about cool stuff
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Bonus Round: Stuff I think is Cool
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In 1984, we thought this is what 2029 would look like
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The future arrived a few years earlier
Smart Glass Capabilities
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Wearable TechnologyTechnology advances have created a new class of small, mobile and networked devices – e.g. smart glasses, smart watches, fitness sensors, health monitors.
Source: 1. Senior Analyst, IMS Research
$6B market in 20161
Wave of wearable products
Visualization capability + hands-free
Smart glasses are a powerful platform
Key Opportunity in Enterprise – Empower “deskless workers”
Enterprise adoption is now viable
Clear use cases and ROI
Enabling technology available
Lowering device costs
Accelerating media attention
1 Smart glasses are the right technology
Workers need to work hands-free
Jobs require real-time data
Managers need real-time intelligence
Phones / tablets / shared kiosks are inefficient and error-prone
2
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Maker Movement
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Drones, Drones, Drones
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Summary
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Learning Objectives
• Describe what Digital Commerce is and the industry trends impacting Digital Commerce
• Explain the challenges organizations are facing in digital Commerce
• List the leading solution providers (vendors)
You should now be able to…
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Deloitte Digital
Thank you.
Kyle O’[email protected]/pub/kyle-o-connor/0/a93/101/https://twitter.com/kpoconno