Top 10 Issues to Consider
When Evaluating a
Multi-Channel Management Platform
W r it t e n by
Steve Weber
President and CEO
[email protected]
If you're evaluating multi-channel strategies to expand your retail business, maximize revenue and
offer customers choice and convenience, you're also weighing all "brick, click and flip" options
including adding stores web sites, marketplaces, mail order, interactive television, catalogs, and
comparison shopping sites.
Industry leaders are engaging in multi-channel integration for some very good reasons. More
effective cross-channel strategies lead to more satisfied consumers, as well as more efficient, more
profitable retail operations. The fact is, most consumers expect to buy their favorite brands from
any channel; online, in the store, over the phone and in marketplaces at any time. While the multi channel landscape is always changing, the path ahead is clear.
Retail channels will continue to widen, offering customers more autonomy over their shopping
practices. In an uncertain economy, one of the safest bets for enhancing revenues may be providing
consumers with a comprehensive and effective multi‐channel experience.
Leading experts have identified the top 10 considerations companies evaluate technology
platforms to power their multi-channel strategies beyond traditional channels. They are as follows:
1. Are the systems you're using today connectable?
In a multi-channel environment you're probably using at least a point of sale, ERP or accounting
system, and one or more eCommerce solutions. If your point of sale system is incapable of easily
getting data in and out, multi-channel efficiency is going to be nearly impossible. Check to see if
your systems have a published application interface (API).
If they do, you'll know that you can get data in and out. Systems that are not flexible (no API) or
have limited import/export capabilities will add expense to your project. If you haven't kept up
with your software support plan, or applied new versions over the years, you may need to consider
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replacing a system that can't effectively be integrated with the other systems you use to sell your
products. Older eCommerce solutions can be rigid as well. Be sure to do your homework. In many
cases the cost of replacement may be far less than trying to connect and support rigid systems –
and the operational efficiencies from integration you may gain with a new system could increase
the value even more.
2. How will you manage and troubleshoot the
connection points?
Now that you've assessed whether your systems can share data – what connection points do you
need and how will you manage them? If you need to connect Magento and eBay to your ERP
system, you may find a fantastic cloud-based solution that connects eBay and Magento, but that
same solution doesn't support a connection to the ERP system. When you want to add a new
Volusion site, or add Amazon in the future, you may need to add one or more additional connection
point solutions from additional vendors – and then figure out a way to manage all the connection
solutions so they play nice together. Add in custom developed integration points and you 've got a
potential support mess on your hands.
Thinking through how you'll connect your channels and what solutions you'll use is key.
Ultimately, you want a platform that is:
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Easy to monitor – so you can tell when there are issues and which connection point is not
working well with another
Simple to connect and the connection point providers play well together and are focused on
ensuring the total solution works (not just their portion of it)
Easy to manage – especially if you have multiple vendors involved
Provides you with the ability to add or remove channels as your business changes
Easily supported so you don't have to worry about applying the latest upgrade to your
accounting or point of sale system and having everything break
How will the platform leverage systems you already own? You should be able to master items in
one existing system such as ERP or POS and connect that system to all other systems to sync,
manage and share data. By sharing the data across all systems you red uce manual updates,
duplicate work and eliminate errors while streamlining operations, improving efficiencies, and
time to market. If you truly want to engage in all or most of the multi-channel practices above, you
need to be able to effectively manage orders and inventory. This requires visibility into multiple
sources of inventory and your system needs to orchestrate a diverse set of order flows across
multiple channels.
3. What does your data look like?
Don't forget to build content preparation into your plan. You can't expect any multi-channel
platform to work efficiently if your data is a mess. If you have duplicates, have data in multiple
locations, use a variety of naming conventions, etc. it's goin g to be difficult for your platform to be
as effective as it could be.
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For eBay users, think through how your items are named. "Black Shoe" may be an acceptable item
name in a point of sale system or ERP system, but is not going to provide you with acceptable
search engine results, or apply the best eBay categories when you go to merchandise items for
other channels. Think about the channel systems you'll be using and what attributes are required –
especially if you're merchandising items across channels that have different attribute requirements.
Be sure to think through who will help you with this if you can't or don't want to do it yourself. It's
important part of managing a multi-channel operation that many companies overlook.
4. What will your sales channels look like a year from
now? 2 years? 3 years?
Your multi-channel platform (any combination of integration points, custom development or
connector solutions) needs to be flexible and scalable. Business conditions change quickly - some
for the better, some for the worse.
When business is booming you may want to add eBay or Amazon which may involve custom
integration work or the ability to find connectors that will work for your environment. You'll want
to think through your long term goals and plans to ensure that the multi‐channel platform solution
you choose can address your growth goals.
If your business isn't so great and you need to pull the trigger on channels that are
underperforming will your platform give you the ability to accurately predict what your costs for
adding and subtracting channels will be? If not, the solution you choose should be able to track the
costs for each channel and determine expense for adding new channel or removing current sales
channels.
5. Item Syndication
Companies selling through many online channels have to contend with content such as eBay and
Amazon categories and other product information that needs to be shown for merchandising. How
do you do this when product information changes rapidly and must be shared across different
channels? Effective multi-channel commerce solutions will give you the ability to streamline
content management and "syndication" of product data across multiple channels. A change to the
item in the master system should ideally update the product in all channels - or the channels you
designate.
6. Order Collection
When you operate a multi-channel sales environment efficiency is going to increase profitability
and help you sell more product. If you have to log into your web store, eBay, Amazon and other
solutions to collect your orders how much time will that take you? Don't forget to factor in how
long it will take you to either a.) fulfill orders out of each different system or b.) hand enter the
orders into your fulfillment system. Additionally, don't forget to add in time to send emails back to
each customer to let them know that their order has shipped and provide them shipping details if
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you have them. With manual entry comes the risk of mistakes and can certainly account for delays
in being able to process and ship orders. Delays and mistakes impact customer service, which you
already know can be life or death to multi-channel sellers. Just a few unhappy customers that write
a few bad reviews can quickly impact sales and ratings on marketplaces.
A multi-channel platform should be able to route orders from your online or brick and mortar
stores to a single fulfillment system or route orders to other fulfillment systems if you deploy drop
ship or third party logistic partners.
7. PCI Compliance
You're not capturing credit card information right? No credit card information should be passing
through your multi-channel system, nor should you be storing credit card information in any of
your software systems. We are continually surprised how many companies open themselves up to
fines and risk by doing so. Most eCommerce systems will support payment processing gateways to
avoid PCI compliance issues. Many companies don't realize that they shouldn't be capturing
payment of a sale prior to the customer's order being shipped. Be sure to review PCI compliance
with any multi-channel platform you consider and ensure that you are properly capturing payment
details.
8. Bi-Directional or One Way?
When you need to connect channel systems, be sure that data is bi-directional. For example, many
connector solutions will push items from one system to another – such as items in Magento to eBay.
That function certainly goes a long way in cutting down the process of manually populating eBay
with items but it won't help in streamlining and closing the loop of the complete order process. For
example, one-way connection solutions mean data is passed from one system to another only – data
can't be passed back. If you are trying to streamline the process of item syndication, order
collection, inventory synchronization and customer collection - one-way integration is only going to
solve a small portion of your needs. Your multi-channel platform should be able to push items,
collect orders, send back fulfillment details, update inventory and bring in customer information to
be effective at managing multi-channel environments. Can it connect to your warehouse system or
the system that tracks inventory? If not, it should.
9. Inventory Synchronization and Visibility
As you expand the number of channels from which customers can purchase, you'll need to ensure
that inventory can be easily updated so you're not selling items you don't have in stock. The term
inventory synchronization is used to describe the automated process of updating available
quantities as inventory is leaving the warehouse (or back office). As orders are fulfilled in the
system that is mastering inventory, the platform needs to be able to get updated it em quantities
and publish those quantities to your channels.
A multi-channel commerce operation requires that a company have inventory visibility across
stores and warehouses. If you have several inventory locations you may want the ability to make
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decisions as to which inventory locations should fulfill orders – perhaps by state or region. In some
cases you might want the ability to manually route orders to inventory locations based on
inventory availability at that time.
10. Know all the Costs of Software vs. Cloud-Based
Solution Implementation
Consider a "pay-as-you-go" month-to-month vs. long term contract payment plan to allow you
maximum flexibility. Watch the fine print. Some vendors charge a percentage of marketplace
sales in addition to monthly fees as a recurring revenue strategy. Be sure to weight month -tomonth plans against annual maintenance fees – and the combination thereof if you'll be
deploying several connection point solutions.
Choose the Right Technology. Select the Right Strategy
The keys to an effective multichannel retail implementation include choosing the right technology
platform for your business model. Selecting the right strategy and enabling your organization with
proven technology optimizes your chances of success.
nChannel provides an easy, cloud-based subscription service that quickly links existing web stores,
and marketplaces like eBay and Amazon with back office systems and POS software. nChannel
enables these solutions to work together seamlessly so you can increase sales, improve customer
service, optimize inventory and save time. With no long term contracts and no percentag e of sales
subscribers pay as they go.
nChannel gives you your own web-based portal so you can reduce data entry, gain better visibility
and better manage sales orders. You can connect your existing POS, ERP, eCommerce and
accounting systems from one place to manage orders, items, inventory and customers. nChannel
doesn't replace your systems – you'll still use them to ring transactions, sell online and handle your
accounting, but you'll be able to work more efficiently.
Before you decide on a multi-channel management platform take a look at nChannel's cloud-based
solution to manage, connect and sync data from your existing systems to manage item, order
inventory and customer information in your multi-channel environment.
Learn how companies maintain tight integration with the ability to streamline item syndication,
inventory synchronization, and order processing integrated into their marketplace, eCommerce,
POS accounting and ERP systems with a single cloud-based platform. Contact nChannel at 1-800311-5944 for a live demo. Connect, Manage and Streamline!
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A primary business investment for retailers is updating existing operational
systems. With retailers now realizing that supply chain systems once thought
robust cannot meet rising customer expectations, the 2012 RIS/Gartner Retail
Technology Study titled "Embracing Change" states that 25% of merchants with
real-time inventory systems have systems that are up-to-date, with 15% – the next highest level –
saying they have started but not finished the process of updating their systems.
In the same study the majority of retailers surveyed are either planning or testing a mobile
commerce strategy, or have an existing strategy - 46% of merchants are currently in the planning
stages; 24% have pilots in progress; and 10% have a fully functional mobile strategy in place.
The Mandate for Multichannel Retail Evaluating Supply Chain Models
2 0 1 2 Booz & C o mp a n y In c.
To remain competitive, retailers will have to implement forecasting systems that provide a high
level of accuracy to minimize stock outs and keep inventory at a reasonable level and
simultaneously embrace innovation in picking, packing, and shipping so that packages can rapidly
depart an increasingly dense network of distribution centers, which must be appro priately located
near major cities. To facilitate this highly distinctive capability, systems need to be designed to
improve inventory accuracy and create product transparency and visibility throughout the supply
chain and all retail outlets so items can be moved quickly to where they are most needed.
There are a number of tangible gains from this model including improved margins as better
inventory control ensures that less online or in-store merchandise has to be sold on sale. And
equally important, the retailer can resell long tail SKUs returned to stores without the expense of
sending these items back to the main distribution center.
"Before the nChannel integration, we relied on manual processing of sales orders
from the RMS system to the ERP system. The amount of manual intervention was
impacting our ability to improve order processing speed and accuracy. For example
shipping used to take 3-4 days. We invoiced and billed credit cards after shipping
because we couldn't charge until product was received. Now we ship in 1 -2 days and
send a receipt via email from GP. Now we collect cash faster which has improved
cash receipt volume. Transaction volume is up 10%-20% and we've reallocated
resources to selling instead of duplicate manual data entry. We're very pleased and
plan to include nChannel integration into our new stores in San Francisco."
Re n e e T h e le n
C on t r olle r
Blu D ot
[email protected]
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800.311.5944
ABOUT AUTHOR
Steve Weber is a 13 year veteran and former Vice-President of eMarketplace Outsourcing Services
for Sterling Commerce, a division of IBM. More recently Steve was named Microsoft Partner of the
Year for Dynamics Retail and awarded Microsoft Retail Independent Software Vendor (ISV) of the
year for his company’s data sync solutions. Steve has more than 20 total years software industry
experience building and leading teams in various roles including sales, marketing, produ ct
development, infrastructure hosting, call center operations and customer service.
ABOUT NCHANNEL
nChannel provides an easy-to-use, cloud-based management platform that enables companies to
cost effectively synchronize, manage and exchange sales, customer, and product data from
transactions that occur at the register, in the warehouse, or via a web-store. nChannel’s centralized,
web-based model enables companies to easily manage sales processes for both wholesale and
consumer channels. Using nChannel, subscribers connect their existing financial, ERP and/or POS
systems with any number of external online and offline stores including marketplaces such as eBay
and Amazon. Publishers of software or cloud applications can develop connections to the nChannel
platform to quickly provide integration to any other connected application on the platform. For
additional information about nChannel, please visit our website at www.nchannel.com.
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DISCLAIMER
©2013 nChannel Incorporated. All Rights Reserved.
This document contains proprietary information protected by copyright. No part of this document may be
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recording for any purpose without the written permission of nChannel, Inc.
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