Design in a hyper networked future
Supply chains are no longer simple and straightforward. As new technologies emerge and customer behaviour changes, new ways of conducting retail are evolving. So how should retailers prepare for this new environment within digital design projects? Jonathan Wright reports.
There’s something reassuring about the idea of the supply chain. With not much of a stretch of the imagination, it calls to mind conscientious factory clerks with ink-stained fingers dutifully ordering widgets of apparently arcane purpose. These widgets, on closer inspection, turn out to be essential parts of items to be assembled on the factory floor prior to being shipped out to a wholesaler. Another step along the chain and we find the wholesaler’s rep in newly shined shoes doing his rounds, selling these value-added goods into the stores that will in turn sell them to consumers.
There’s just one problem with this representation of what’s happening, it’s hopelessly out of date, a sepia-tinged picture that sees the supply chain as a smooth, linear process. According to Stefan Schmidt, VP of product strategy at ecommerce technology company Hybris, that’s not what’s occurring these days at all.
“Traditional mechanisms don’t work anymore,” he says. “Manufacturers now sell directly. Retailers sell directly, and they sell their own products, their private brands. Wholesalers and distributors sit in-between and wonder, ‘What is our role in this when the other two go direct to the customer?’ That has certainly had an impact on how the supply chain is working and how the different parts of the chain are working together.”
There’s more. At the same time as these new and evolving approaches to doing business are beginning to emerge, customer expectations have grown. Indeed, in many respects, it’s customers themselves that are forcing change as they ask the kind of devastatingly simple questions that can trip up unwary sellers. Have you actually got the item in stock? Where can I pick up the item? Too far to go, can you guarantee to deliver it by tomorrow?
“This has an effect on the supply chain in that the retailer or even the manufacturer, or anyone who sells something, needs to understand when do the products come in?” says Schmidt. “Or when will the materials come in so I can manufacture that? And that has almost trickled down from the front end, from the point-of-sale to the actual acquiring of products over the years.” It’s the shift, he adds, from a linear process to a world that’s more akin to a “network of communication and action”.
For anyone designing and rolling out digital design projects, this is a profound shift, one that needs to be front and centre when thinking about interface design. More than this, when thinking more widely about designing retail experiences that serve customers’ needs across different channels.
To get a perspective on the landscape here, consider a company selling computer equipment. Apple products may be a crucial line, yet Apple has its own stores, its own digital touchpoints. Apple is both a key supplier and a well-resourced competitor with a formidable brand-recognition factor. There are new kinds of competitors too. Schmidt offers the example of what he calls “mom-and-pop” operations selling digitally, small retailers that ally themselves directly to manufacturers via “a white label store on top of the manufacturer’s platform”.ENTER THE MATRIX
It’s clear the competition is both fierce and no longer just a case of pureplays versus older retailers with a history in the bricks-and-mortar era, so how can companies best cope? More than this, how can companies best compete? Here, it’s worth focusing again on Apple. For all its hipster design credentials and its ability, as a huge multinational, to monitor and control its own supply chain, this is only part of the story. Crucially, Apple is far ahead of the curve when it comes to omnichannel retail, a company where sales associates routinely ask whether consumers would like a receipt emailed to them, a canny way of personally identifying customers within a bricks-and-mortar environment.
Now contrast this with an example put forward by Mo Syed, head of user experience at technology company Amplience. Recently, he wanted to buy a new coat. “There was a tremendous amount of confusion about whether this coat was in stock or not,” he sighs. “The classic one is it’s in stock, but it isn’t, the computer says we have a few but we don’t, and that’s immensely frustrating for customers when they make an effort to go to buy this thing and they turn up and it’s not actually being stocked.”
This may seem a trivial example, but it points to a real problem. If retailers are going to use digital technology to promote, for example, transparency over stock levels with customers as part of a move towards omnichannel, the information being offered has at the very least to be reliable. “A lot of stuff exposed to customers in and around the supply chain doesn’t feel trustworthy, it feels like cardboard-cutout data,” says Syed. “Customers know that because as soon as something changes, for example, unfavourable weather [affecting delivery times], they know that stuff doesn’t mean anything anymore. Out-of-date data undermines any confidence, any potential uplift around that information.”THE SUPPLY FACTOR
This isn’t entirely down to retailers. When Internet Retailing meets Stefan Schmidt, it’s at the Gameplan B2B Ecommerce Platform event in Berlin. While one glorious panel moment sees Dr Ralf Tenberg, manager of IT supply chain management for Demarg Cranes, say that, yes, the company has taken an order for a crane made via mobile, it’s nevertheless clear that many within the B2B sector are struggling to make the transition from a world of catalogues thudding on desks towards a digital future.
For even the most digital-savvy retailer, this can cause problems because suppliers may not be offering clear product information, whether that’s around specs or delivery times, information that’s in turn crucial for the retailer in its own interactions with customers.
“This is a massive issue,” says Mo Syed, “and I think it will become an even bigger issue as retailers understand the cost of not having that data present in the buying process. In short, when retailers can put a pound value on not being able to be precisely clear about when that product is going to be received by the customer, they will then pick their suppliers and do the analysis on which suppliers to do business with on the basis of that. Having that data visible will be just as important as the price that something is supplied at, because it will actually be part of the price.”
Fiona Ashdown, marketing manager, for Stibo Systems, tackles the problem here from the perspective of a company specialising in master data and product information management, but the underlying point, that retailers need reliable data from suppliers in order to give reliable information to customers, is the same.
“The cost of efficiently managing hundreds of suppliers, and thousands of SKUs is a huge challenge,” she says. “The need to improve operational processes and the related technology, while making significant cost reductions, is a top priority. One area our retail customers are addressing is how they acquire product information, enrich and version it for multiple channels and regions, as well as delivering that information quickly and accurately to multiple business systems and customer-facing touchpoints.”
In this context, it is perhaps not surprising that companies such as Amazon and Google, respectively via amazonsupply.com and Google Supply Chain, are moving into the B2B sector. These internet behemoths see an opportunity here.
That’s not to say that retailers can simply blame suppliers for problems. Matthew Curry, head of ecommerce at Lovehoney , a company selling sex aids in an impressively jolly and all-good-clean-fun fashion, emphasises the need to warn customers if products can take a while to source.
“The first rule is always ‘manage customer expectations, then exceed them’,” he says. “If a product takes a while to source, then specifically say how long on average it takes, and offer suitable alternatives. If the customer wants that particular model, they will wait, if not, they’ll buy something else. The same case works with stock: not only does it give the customer confidence that you actually ‘have’ the thing, a lack of stock can give the purchase a sense of urgency.”
Make sure that staff are similarly well informed, he adds. “This is why we place our warehouse right next to customer service,” he says. “Obviously you’ll want to put as much information as possible onto the site, so that the customer doesn’t have questions and makes an informed purchase, but in cases where that isn’t possible, Customer service have to have access to the product. Further, when you are stocking multiple brands, what we find useful is to have brand-training days, where a rep from that brand will come in, talk about their ranges, and train up not only our customer service team, but also content, merchandising and trading.”
Predicting the Future
To look at this another way, and at the risk of labouring a point we’ve made often within these special reports, digital design is no longer just about designing for mobile or for the website, it’s increasingly about service design and the emerging world of omnichannel. If the raw information underpinning these approaches is lacking, no amount of pretty pictures tastefully laid out will compensate.
Looking ahead, the underlying issues here are not going to go away. Rather, at the same time as Schmidt’s “network of communication and action” becomes more complex, we’ll enter an era when customers will increasingly expect a combination of personalised shopping experiences, up-to-the-moment information about whether an item is in stock and keen prices. There’s an inevitable tension here between service levels and expectation, one that will be solved in part by automation so that certain processes become cheaper even as smarter machines provide better customer experiences.
One of the keynote speakers at the Berlin B2B event was futurist Jack Shaw. His argument was that we’re already on the cusp of seeing what he calls self-configuring business eco-systems beginning to develop. Why is this new? Because where today’s big data projects are essentially retrospective, designed to act on information the retailer already holds, in the near future we’ll move to a point where dynamic, intelligent systems will anticipate needs in real time. The retailers that utilise this technology most effectively – and we’re talking about a level of sophistication exponentially beyond if-you-like-this-have-you-thought-about-this? recommendations – will be those that consumers use again and again.
To pull this back to the present day, retailers need at least to begin to approach digital design in a way that takes account of this future. After all, as Mo Syed points out, automated systems already take a surprising amount of the strain within modern retail.
“These systems fill in the cracks and they’re the systems we touch first when stuff starts to go wrong,” he says. “They’re at the sharp end of the customer experience, they’re the things we complain most about, they’re the places we scrutinise, so it’s very important that retailers do the best they can here because it’s often the place where there’s the most rage around the experience.”
Speaking from experience
“It’s not just about having visibility within the supply chain, it’s also making that visible at every possible touchpoint you can think of. It doesn’t really matter whether someone is using a mobile phone, a browser or for that matter any kind of internet-enabled device that can serve this information.”
Stefan Schmidt, VP of product strategy, Hybris
“The idea that you have to pleasure-delay a purchase for potentially weeks is anachronistic. People are just not used to that, even where there’s a perfectly reasonable reason for that. Customers are just not used to the idea of having to wait that long anymore because we’re used to having our needs fulfilled immediately. Having said that, if these things were more transparent upfront, they’d have less of a negative impact on the
Mo Syed, head of user experience, Amplience
GET THE DATA RIGHT
“Mastering product information in a single repository – creating one view of product information, which can easily onboard new products from suppliers, and feeding this information across the enterprise – reduces silos of data and inconsistencies, while ensuring data quality.”
Fiona Ashdown, marketing manager, Stibo Systems
MONITOR YOUR OWN INFORMATION
“Customer service will always be the frontline here. Monitor everything from service review to product reviews, it will quickly flag up where your messaging did not accurately reflect either the experience or the customer expectation.”
Matthew Curry, head of ecommerce, lovehoney