Omnichannel vs. Unified Commerce - eMarketer

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Omnichannel vs. Unified Commerce

January 7, 2015

Ken Morris
Partner and Co-Founder
Boston Retail Partners

Retail consulting firm Boston Retail Partners (BRP) specializes in technology and business challenges associated with omnichannel retail. Ken Morris, partner and co-founder of BRP, spoke with eMarketer’s Yory Wurmser about what the firm sees as the next stage in retail: unified commerce.

eMarketer: What is the difference between unified commerce and omnichannel?

Ken Morris: In omnichannel, you have multiple channels, but you don’t have one piece of software, one version of the truth: You have many versions of the truth. In the unified commerce world, it’s all connected in real time. I don’t just mean the web side, but the mobile side, the web side and the store side—all in real time.

50 years ago, retailers made a decision to decentralize point of sale [POS] because of a lack of network technology. The networks at that time weren’t redundant, they weren’t fast enough, and they were too expensive to connect. When we talk about unified commerce, it’s bringing that all together in real time.

The best example is banking. Banks 25 years ago woke up to the fact that the network could revolutionize banking as we know it, and they created a network of ATMs linked together by technology.

Retailers were thrifty, and they never really invested in this network technology. ... The cloud is a much better environment to run a retail operation. It’s more customer-centric and customer-friendly. That’s why this unified commerce experience will be the way people go in the future.

eMarketer: What is the biggest technical challenge to linking all of this various data together?

Morris: The most important component is a middleware layer—a piece of software that connects the dots. Retailers aren’t going to throw their legacy applications away, they’re not going to throw their investments away, but what they have to do is link it all in real time.

“The most important component is a middleware layer—a piece of software that connects the dots.”

eMarketer: What is keeping retailers from implementing unified commerce right away?

Morris: They’ve made an enormous amount of investment in the technology they have. Let me put it this way: A traditional retail register costs $3,500 to $4,000 per register. If you have a thousand stores, and you have five registers per store, I mean do the math: There’s $50 million in investment in hardware. No one’s going to allow you to throw it away, so people are moving toward mobile [as a first step].

eMarketer: When you say mobile, do you mean mobile POS?

Morris: Yes, but a lot of the mobile POS solutions are architected to talk to the in-store controller—the machine in the store, which to us is insane: It’s just like another register, and you’re just perpetuating the insanity of this decentralized process. A mobile solution that’s cloud-based is the smart direction for retailers to move in.

eMarketer: Do you think customers themselves are demanding an omnichannel or a unified commerce experience?

Morris: This is the big debate. I always say we need to sell to my daughter not my mother, and then other people point out the reality is we need to sell to both and we need to be able to interact with the customer, regardless of how that customer wants to interact. Retailers have to engage with consumers where they want, any time they want and have a consistent message across the brand. It’s rare to have a retailer that’s able to do that.

eMarketer: What aspect of unified commerce has the highest potential to excite shoppers?

Morris: I’ll give you an example. A liquor store we worked with has hundreds of stores, but they only have one or two people in the chain who are experts, really sommeliers. They know everything about wine. They know what Wine Spectator number is attached to this white wine or red wine, and they know the questions to ask. The retailer wanted its store associates to be able to ask the right questions in their stores: “Is it a special occasion? Is it a dinner? Is it red? Are you having meat, or are you having fish?” We’ve been able to take the expertise of the A associate [the expert] and give this selling experience via mobile device to the new associates—what we would call B, C or D associates. It’s a win for the retailer, and it’s a win for the customer.

eMarketer: Do you see hyperlocal messaging being a major thing in the future?

Morris: Absolutely. Twenty percent of the people provide 80% of the sales. That 20% is constantly changing, and to be able to identify that 20% of the top customers in real time—and take care of them, give them extraordinary service—is really the key.

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