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Unified Commerce vs Omnichannel Retail

This is an archived post from OrderDynamics, now Tecsys retail division.
Unified Commerce vs Omni-channel Retail Latest among the retail buzzwords is ‘unified commerce'. So, the question immediately arises about what the difference is between omni-channel retail and unified commerce. For the most part, they seem to be the same thing, but are they?

Don’t Listen to Most Vendors

Ironic for me to call out as a retail technology vendor, but it is true. If a vendor simply says that they are different, and glosses over that omni-channel retail is ‘so passe’… then make sure your ‘BS’ gauge goes into overdrive. In fact, I will hold OrderDynamics to the same high standard. If we suggest that unified commerce is more than a buzz word describing omni-channel retail from a tech perspective, then we should prove it. Moreso, we should be telling you why this is important to your business.

Multi-channel Retail

Having read some definitions of omni-channel retail, the suggestion is that it is the next step after multi-channel retail. Multi-channel retail is the early step of having physical stores (bricks and mortar), mail-order /catalog business, order taking call center, and online ecommerce business. Each of these channels are originally distinct businesses, and do not necessarily communicate with each other. In this scenario, which still exists today, a shopper can find one price online, call their order center to find yet another price, and find a third different price when they shop in-store. Frankly, these situations infuriates many customers. With the advent of social media (instant frustration ranting on twitter) multi-channel retail is clearly no longer a winning strategy. In this era of retailing each channel was a silo unto itself. Prices could vary between the different channels. And returns are often NOT accepted from one channel to another. So, the idea of ordering online and being able to return that product in-store, was not necessarily accepted. When confronted with these discrepancies, it was not uncommon to hear the brand employees pointing out that the different channels were different divisions, and run like different companies. Clearly, pointing such things out to a customer is a serious mistake, and an embarrassment for the brand. Yet, we all have stories of this sort. Now, don’t get too smug. Although we pointed out that this was the past tense of retail, there are still many examples of brands working in a multi-channel fashion. In fact, OrderDynamics will soon release new research showing that for North America, only about 26% of retailers are working with an omni-channel strategy. With the intense competitive pressures of retail today, it is surprising that more of these organizations have not evolved faster.

Omni-channel Retail

Omni-channel retail evolved from the failings of multi-channel retail. There needed to be a way to tie all these channels together, and provide the customer with a seamless brand experience. When a shopper logs into their online account with the retailer, their order should also be visible to the call center, when they call in with a challenge. That shopper can then make the choice to either ship their order directly (home, office, or other location), or do a in-store pickup (instant gratification), or view it on mobile. Shoppers expectations of omni-channel retail are that it is seamless. They want one single experience that follows them regardless of method of purchase. Omni-channel retail does not have to fall victim to the same perils of multi-channel retail. To make omni-channel retail effective requires a centralized hub of intelligence that pulls all the pieces of the retail puzzle together. To form a cohesive brand story. That centralized intelligence is the order management system (OMS). Old order management systems are often on premise software solutions, based on an retailer owned computer systems. However, modern order management systems are based on cloud (SaaS) technology, called distributed order management (DOM) systems. To be fully transparent, OrderDynamics’ OMS is really a DOM system. A System based on the absolutely latest and most robust cloud (SaaS) technology available.

What do Omni-channel Retail Systems Give you?

This means omni-channel retail systems centralize many aspects. These include real-time inventory visibility, order orchestration, routing optimization of a consumer’s order (for time, cost savings, etc), order orchestration (to make sure it all shows up in one box, not five), and robust returns capabilities. As a customer, it means shoppers get a seamless brand experience. It means that as a customer, I feel like I purchased from one single brand. I am treated the same throughout the process – regardless of channel purchase selection. Equipped with a centralized intelligent DOM or OMS, the brand treats me as one single person with one single account. Without hiccups, complaints, or challenges.    

Unified Commerce

Since unified commerce is retail’s latest buzzword, most vendors are trying to figure out how this is different from omni-channel. With a clearer understanding of how a robust DOM or order management system provides a seamless brand experience to consumers, there is little difference in the end result of the customer experience. At the core of a unified commerce solution (as that of the omni-channel retail solution), is a highly robust, powerful, and easy to use order management engine (DOM).

Where Unified Commerce and Omni-channel Differ

Admittedly, the omni-channel retail perspective of the world is one of a customer having several different channels by which to purchase from a retailer. It is one single route to all the different channels. The brand experience is seamless, and smooth. Unified commerce is often shown as a customer at the center of all the different methods of ordering a product. Like omni-channel retail, it too requires a centralized, intelligent DOM or OMS to orchestrate order, optimize systems, provide real-time inventory updates and customer visibility, and transact returns from any source. Philosophically, there is a slightly different nuance. Being pragmatic about it, both terms essentially say the same thing. They both hold the seamless brand experience as the key component of the customer’s journey to a purchase. They both require the same technology to orchestrate, communicate between siloes, and make it all happen easily.

Don’t Fall for the Schtick

Many vendors are using the ‘unified commerce’ buzzword to scare retailers into believing that they need all systems to be from one vendor, to be truly unified. Not so. If someone uses this line of reasoning on you, stop them and walk away. This is a scare tactic, used to increase their sales opportunity. It is not a bad idea, but it certainly is not your only option. A simple OMS, which is part of the POS (point of sales) solution is fine for smaller retail chains. If you have five stores and an ecommerce site, then this solution is probably all you need. But, if your chain has 15, 20, or 100+ stores and one or more branded ecommerce sites – then this solution will be your Achiles heel. You may want to take a moment to prepare a white flag, and declaration of defeat which you will provide to your competitors. Unified as a single solution or not, this type of simple OMS will just not serve your needs, regardless of the POS vendor’s protests. Not only will it not meet your functionality and robust order fulfillment requirements, the lack of omni-channel capabilities will start to damage your retail brand.

Unified Commerce Doesn’t Mean Only One Vendor?

‘Unified commerce’ is also often used to point out how retailers need ALL systems to come from one single vendor. Again, this is a sales centric fear-tactic used by many vendors. It is not necessarily a bad thing. It is wonderful to have one person to hold responsible for ensuring all systems work seamlessly, are well integrated and have a single beautiful graphical interface. However, make your choice based on the functionality of all the individual product pieces. A good systems integrator (SI) can pull together several best-of-breed technologies that will cater to your exact needs. SI’s integrate industry leading systems for all aspects of your unified commerce solution. That way you get the truly best possible system, integrated into a single system that works better than most single system vendors. The fear-tactic approach is often used by a vendor who is more interested in ‘winning’ your entire business, and expanding their own sales pie. Rather they should be focused on providing the retailer with the best possible solution, made of the best focused systems on the market. Single source unified commerce vendors might be using a best-of-breed order management engine. If so, don’t be shy. Ask them who provides their order management system, and make sure it is the best system that will meet your needs. Don’t get bamboozled! Just because mega-vendor’s big brand financial ERP software is fantastic, does not mean that their warehouse management system (WMS) or order management is any good. If the vendor is using a best-of-breed engine – then great. If their OMS was a side project using an underfunded team to patch a hole in their overall strategy; then be very careful. Many retailers buy a great overall ERP system, only to realize that the OMS fell seriously short of their needs.

Results Are What Count!

Unified commerce is the end result of a shopper’s seamless brand experience. Call it unified commerce or omni-channel retail, it is the mission critical, intelligence of a robust DOM or order management system that will make a difference to your customers. Don’t sell yourself short on the capabilities of a powerful system. Remember too, that the power of a best-of-breed system can integrate into most ERP, eCommerce, POS, WMS, payment gateways, and even custom coded retail technology systems. To customers, the results are what count. Don’t get hung up about whether your solution is an omni-channel retail system or a unified commerce solution. Fundamentally, they are the same thing, as long as your customer is experiencing the smooth buyer’s journey they expect. Shoppers won’t see the hard work taking place behind the scenes to make it all seamless. So, choose your systems wisely. Choose the system that will do the hard-work for you, making your omni-channel retail experience, unified! Author: Charles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.       Related:    
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