Customer demands for more rapid and cost effective e-commerce delivery seem to be increasing on a daily basis. In fact not a week goes by now without my speaking with retailers and etailers that since the dawn of e-commerce have successfully serviced Canada from one fulfillment operation for the country and are currently rethinking this model.
In most cases their national fulfillment operations are either positioned in Toronto or Montreal, as well as some in Vancouver, which up until now have been totally acceptable solutions. However, it definitely appears the days are numbered for a single e-commerce fulfillment operation being a viable customer delivery experience solution for all of Canada.
In preparation for this year’s Retail Industry Leaders Association (RILA) Logistics event in Orlando February 17-20th my first task was to review the program and determine priorities for which sessions to attend.
In my mind the most significant challenge facing retail logistics professionals bar none is the rapid rise of multichannel commerce and all associated complexities and surrounding issues. With this in mind I am now a man on a multichannel mission for this year’s #RILAlogistics event!
Early in January of 2012 I found myself struggling with the current terms around multi-channel, cross channel and omni-channel to adequately describe the current retail and e-commerce marketplace reality we all face.
Searching for a term that would better capture the full complexity and many drivers impacting the business, on January 3rd 2012 in a moment of epiphany I came up with the term and concept of Matrix Commerce on which topic this whitepaper is a primer.
Matrix Commerce describes the complex construct integrating marketing, sales, sourcing, pricing, profitability, service levels, delivery and consumer perceptions. Inherent in this is the notion of complete customer centricity from many of the above items extending to include customer desires for positive social outcomes relative to cause alignment and even the sustainability performance of companies they choose to do business with.
A mouthful for sure, but while you’re chewing on that start considering the types of real time and rapid processing systems which will be required to support such multi-facetted business decisions, not to mention the reams of big and not so big data that will be necessary for companies to collect in order to make them.
IBM (NYSE: IBM) today announced new marketing and sales innovations that will allow retailers to deliver a consistent shopping experience for consumers across multiple touch points — from the store, mobile and online. IBM’s global survey of 26,000 consumers announced today revealed that 35 percent of consumers are considering diversifying the way they buy goods and services in the future.
To meet these rising demands, IBM is introducing new software that serves the rise of the so-called “omni-channel shopper,” those consumers who shop multiple channels and expect a consistent sales and marketing experience.
As part of the Smarter Commerce Initiative, IBM is helping retailers serve these consumers so they can shop where, when and how they want, quickly finding and purchasing the products they want, all the time viewing the retailer’s interactions with them as a service.
CMOs, CIO’s and e-commerce leaders are striving to better understand their most effective sales and marketing strategies. Their goal is to increase sales by growing average order values, conversion rates and cart sizes. IBM’s new marketing and sales technologies help achieve these goals by gaining insights into all customer interactions, buying patterns and purchases across mobile, social, online, call center, email and offline.
As the world of commerce continues to become more complex, volatile and socially transparent the need for a strong linkage between the CMO and the Chief Supply Chain Officer (CSCO) grows. In our ongoing exploration to better understand this need within the emerging reality I call Matrix Commerce, last week I had an opportunity to connect with John Mesberg of IBM.
The below Q & A points capture John’s insights into the growing need for C-Level bonding between CMO and CSCO. I then wrap up with a few thoughts on some of the SCM factors CMOs may want to consider as they begin to build out this relationship facilitated by technology for enhanced brand protection and longevity.
Ashcroft: Why is it important now for the Chief Supply Chain Officer and Chief Marketing Officer to partner?
Mesberg: When it comes to both marketing and supply chain and we consider consumer demand and supply, both sides are simultaneously becoming more volatile. On the demand side, you have consumers who expect more. They expect products to be delivered more quickly than we ever envisioned in the past. Consumers expect products to be available in an hour at a local store. They expect to walk into a store and if the store doesn’t have what they want, they expect the store to fulfill that order to make the sale. So the level of expectation on the consumer side is changing. On the supply side, we’re now dealing with a global supply chain with significant commodity price fluctuations. There’s political unrest, supplier volatility, and managing the risk of those suppliers. Both the consumer and demand side are undergoing more volatility than we saw even ten years ago. When it comes to marketing, I tell my clients, CMOs and marketers are the ones responsible for making brand promises. CMOs are telling their customers what to expect of the brand, whether that’s fashion, service, etc. And to a degree, marketers are now telling the customer to not just expect a certain product, but to expect a certain experience. And ultimately, marketers are dependent on supply chain officers to fulfill that brand promise and deliver on the experience. These promises however, are becoming increasingly more difficult to fulfill due to the increase in customer expectations and the challenges faced on the supply chain side in order to deliver the product and that experience.
There’s no getting around it, times are tough and we may still be in for more of these lean times for years to come. Every company is looking for that elusive source of growth to keep driving the top line, or at least to replace any shrinkage in business from the downturn.
But in difficult times growth can be a hard thing to find and merchants both online and offline need to be creative and on the lookout for any potential sources of new growth. For those in the United States still struggling to find growth in the aftermath of the real estate and banking meltdown I have one word which may be the answer and that is … CANADA!
Canada you say? What’s different about the situation north of the 49th parallel that might make it a growth opportunity for me? Well to borrow a phrase well worn south of the border the first answer is “It’s the economy stupid!” On whichever metric one compares, Unemployment, GDP, Inflation or Currency, Canada has fared better during this downturn. Relative to Unemployment, at the start of the downturn Canada and the US were both tracking an Unemployment rate of roughly 6% and since that time the spread has grown to 1.5% with roughly 9% in the US versus 7.5% in Canada. Looking at GDP, Canada and the US both went negative in 2008 and based on aggressive stimulus both returned to roughly 3% in 2011, however since that time there is about a 1% spread with Canada at 2.75% and US at 1.75%.
In June #MMchat aka #MarketerMonday chat will be held for the 100th time!
Established July 26th, 2010 #MMchat has become a weekly tradition for an ever expanding number of CMOs, marketers and others working in and around the digital social networking space. And all of us @TheSocialCMO were recently very pleased when #MMchat was named one of the 15 Essential Social Marketing Twitter Chats by Mashable.
One of the most elusive goals of transient social networks remains the creation of sustainable ongoing communities of interest. Tweetchats are an excellent way to not only establish such an expert community, but to also keep it engaged and growing on an ongoing basis.
In the past two months, IBM has made three strategic moves that bolster its SmarterCommerce portfolio. Acquisitions of Emptoris and Demandtec expanded sourcing and pricing portfolios while the new version of IBM ILOG LogicNet Plus XE further enhances supply chain network capabilities. These actions move IBM closer to achieving the technology requirements to support matrix commerce.
New channels such as social, mobile, and virtual goods create new business models that disrupt and expose the weaknesses and rigidity in existing models. Our research helps guide clients on how to optimize and deploy Matrix Commerce for the right customer audiences. Matrix Commerce extends beyond the sales and customer focus to include management and optimization of supporting sourcing and supply chain facets.
Specific focus of the Matrix Commerce research theme at Constellation Research will be:
- Market landscape of next generation products
- Relevant use cases by customer type
- Nature of Matrix Commerce
- Vendor selection criteria
- Future of Matrix Commerce
Stay tuned for more details as we prepare to launch Matrix Commerce and see summary of the three IBM announcements mentioned above and our POV in relation to Matrix Commerce.
At the Kinaxis Kinexions event last week, CEO Doug Colbeth and the Kinaxis team delivered an exciting and thought provoking show. Despite some would say, over the top showmanship, the stars of this show were clearly customers. On the stage, at the Industry Influencers session, but more importantly at the tables, all sharing their passion for what they see as a key SCM tool. Below are summarized reports on What’s New, What We Saw and What it Means for You.
What was new?
Rapid Response Control Tower
The Kinaxis Rapid Response Control Tower was launched by Kinaxis CEO Doug Colbeth to kick-off the event. The image below depicts all the component extensions to the current Kinaxis S& OP and SCM product.
Specifically the product extensions with RapidResponse Control Tower allow companies to use a single cloud-based enterprise planning and “what-if” simulation solution to increase customer service, reduce corporate risks, and improve financial performance. This means no more disparate planning tools in multiple functional silos allowing them to simultaneously plan, monitor and respond across multiple areas of the business.