Meeting Retailing Challenges in a Multi-channel Environment (Strategy Focus)

The demand for a multi-channel shopping experience is leading many retailers to adopt this approach today. However, the rolling out a multi-channel offering brings with it a variety of business challenges that will need to be overcome. While service oriented architecture (SOA) may provide the answers, it brings with it more challenges, both at a technical-level and an organization-level.

Report Highlights


Adopting a multi-channel retail approach can prove to be a costly management exercise. Business challenges that need to be addressed include gaining visibility across channels and the ability to provide consolidated real-time order information. IT departments faced with adopting SOA to facilitate multi-channel retailing need to be aware of the challenges they may face including overcoming a lack of knowledge about SOA, security issues and the need for effective SOA governance. Deploying SOA may require a degree of organizational change. Internal collaboration among stakeholders will be necessary, and the role of IT needs to be better integrated into corporate goal setting. The right approach to implementing SOA within the organization also needs to be considered.
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DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 1
ANALYSIS 2
Achieving cross-channel visibility is a key business challenge for multi-channel retailing 2
It is critical to achieve visibility across channels for efficient retail management 2
A single customer view is vital for effective marketing efforts 2
Cross-channel tracking allows accurate forecasting and inventory management to prevent lost sales 3
Cross-channel promotions and pricing effectiveness data is needed to refine strategies 4
Unified multi-channel customer service is important for improving the customer experience 5
Consolidated real-time order information across channels is needed for successful fulfillment 5
Multi-channel IT solutions must support the ability for change and growth if costs are to be contained 6
Overcoming a lack of knowledge about SOA adoption is the biggest technology challenge 7
Service oriented architecture is a natural solution for the challenges of multi-channel retailing 7
SOA in the 'real-world' 8
A lack of knowledge about SOA is a key impediment to implementation 9
Many businesses are not familiar enough with SOA to feel confident deploying it 9
Security is another crucial area that needs to be addressed if SOA uptake is to rise 10
A variety of other issues are also inhibiting SOA adoption, including a general lack of awareness 10
The need to overcome governance issues surrounding SOA is vital once implementation has occurred 11
SOA Program Governance 11
SOA Design-time Governance 12
SOA Run-time Governance 12
SOA Change Management 12
Organizational challenges revolve around the need to align business and IT strategies 13
Successful SOA strategies require internal collaboration among business and IT stakeholders 13
Deciding on the right organizational approach to take is critical to SOA success 14
Modeling SOA maturity and the business goals is a useful starting point 15
The growth of a hybrid approach is gaining ground over top-down or bottom-up execution strategies 15
APPENDIX 17
Definitions 17
References 17
Further reading 18
Ask the analyst 18

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Figure 1: Differing customer details across channels need to be consolidated into a single record 2
Figure 2: Tracking projected and actual SKU sales allows stock revisions to be made if necessary 4
Figure 3: Multiple order fulfillment systems that are poorly integrated jeopardizes meeting customer needs 6
Figure 4: SOA meets the technology requirements that multi-channel retailing brings 8
Figure 5: Lack of knowledge is an important obstacle for SOA adoption 9
Figure 6: Attention needs to be given to four levels of SOA governance 11
Figure 7: IT must be able to demonstration the ROI of an SOA initiative over time 14
Figure 8: Maturity Model for Multi-Channel Retailing 15

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