14 July 2010

Microsoft’s Worldwide Dynamics Retail team introduces the new Microsoft Dynamics AX for Retail offering.

So often characterised as a dynamic industry, the one constant in retail is change. Right now, the question on the tip of every retailer’s tongue is this: “what factors are driving change in the retail space and how can we make sense of them?” Well, the answer is kind of obvious – at least to some of us. Many retailers still view the changing business landscape as a phenomenon caused in large measure by the pervasive forces of a struggling global economic climate. As such, they continue down the trodden path of cost differentiation in a bid to boost lagging sales figures and drive traffic through their stores. Game-changing retailers, however, are taking a more strategic approach that considers both technological and socio-cultural developments alongside those of an economic nature. At the centre of these developments is, of course, the consumer, and it is here that retailers need to sharpen their focus as they look to take more of the customer’s mindshare and wallet.

Customer-centricity makes the customer a part of the retail organisation’s DNA, permeating all the key retail processes from purchasing, supply chain and sales to merchandising and customer service

Dilip Popat, Microsoft Digitally empowered and well informed, today’s consumers are increasingly using technology to research and collect information about products that interest them. Consumers research, buy products and share their shopping experiences online, 24/7, while at home, at work or on the go, and across a multitude of applications. Similarly, today’s consumers are more pressed for time than ever and increasingly demand convenient shopping experiences that are personalised, multi-channel and offered with high-touch or self-service options. What’s more, many consumers feel a growing sense of social and environmental responsibility, demonstrated by their interest in recycling, energy conservation and air quality, and their interest in organic and fair-trade products. It goes without saying then that as consumers become more digitally connected, better informed and environ-socially conscious, they become more demanding. Two important things for retailers to consider here are: customer satisfaction is driven more and more by the overall retail shopping experience, not just product price and availability; and loyalty becomes more fragile, susceptible to the quality of the most recent interaction or the most recent online customer reviews.

“We are seeing an eclectic mix of traditional and contemporary dynamics setting the rhythm of change in the retail space,” says Dilip Popat, global industry director for retail, Microsoft Dynamics. “Retailers will continue to look at ways to drive down costs, better manage their inventory and make their most valuable asset – their employees – more productive. But increasingly they will need to serve their customers across multiple channels, ensuring a consistent experience for a group of people who are better informed and more demanding than ever before. The only way to address these dynamics is through a solution that integrates a retailer’s end-to-end business processes across multiple channels.”

In order to provide consumers with a premium, end-to-end shopping experience, retailers must build customer-centricity into every facet of their business. In doing so, they can deliver an experience far greater than their competition and foster lasting relationships with their customers. There are a number of ways in which a retailer can become more customer-centric with technology as a key driver, including:

• Complementing bricks-and-mortar stores with a Web site and shop-by-phone function, so that customers can shop regardless of their locations or the time of day
• Being available to consumers regardless of where they are in the purchase cycle by providing factual, engaging content about stores and products; supporting the actual purchase with product features and availability, and personalised incentives and coupons; and delivering personalised post-purchase customer service, such as warranty activation
• Satisfying customers’ demands for both highly supported and self-service interactions; this requires knowledgeable customer-facing employees, an up-to-date, e-commerce-enabled Web site and perhaps in-store kiosks.

“Customer-centricity makes the customer a part of the retail organisation’s DNA, permeating all the key retail processes from purchasing, supply chain and sales to merchandising, customer service and more,” says Popat. “Insight into the needs and changing preferences of the consumer is key.”

In line with this, the Microsoft Dynamics vision in retail is to empower retailers to become ‘connected’: connecting people, insight, and customer relationships to deliver innovative, cost-effective solutions and capabilities that resonate with consumers and suppliers. This leads to rich, lasting customer relationships, creating heightened customer-centricity.
Let’s take a closer look at the three tenets of this vision:

• Connected people: sales associates, call centre representatives and customers are the retailer’s most valuable assets. Technology that connects these assets and improves their productivity with timely, relevant information can help transform simple, standalone transactions into relationship-building opportunities
• Connected insight: delivering connected experiences on a sustained basis requires continuous fine tuning of processes from one end of the retail organisation to the other. Gaining the insight to do this requires data from throughout the organisation to be merged, analysed and delivered to the people who need it in a timely manner. When this is accomplished, the end-to-end retail operation becomes customer-driven and proactive
•  Connected customer relationships: when people and insight are connected across the retail organisation, the convenient, consistent, multi-channel experience that customers demand is enabled. This is the quality experience that differentiates the retailer’s brand and encourages customer loyalty in the long term.

Executing this vision means using information technology to create and sustain differentiated brands based on an end-to-end shopping experience, which produces stronger customer relationships and greater loyalty. It also helps retailers gain insight from information collected throughout the organisation to inform decision making, turn the supply chain into a customer-driven operation, and enable more proactive retailing. In turn, all customer interactions, from pre-purchase information gathering through multi-channel shopping to post-purchase customer service, offer customer relationship enhancement opportunities.

This article first appeared in the Summer 2010 edition of Retailspeak magazine and is part of a Dynamics AX for Retail special:
Dynamics AX for Retail: a partner perspective

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