The omnichannel iceberg: Large backend processes are hidden

Martin Öztürk, Sales Consultant at ROQQIO and expert for complex backend processes, explains the challenges in omnichannel commerce and shows which solutions are available.

Omnichannel commerce is easy - just not for the retailer

Omnichannel commerce is easy. At least for the end customer: He orders, pays and gets the goods delivered to his front door, preferably on the same day. And if something doesn't fit, he returns the product, either to the nearest branch or he sends it back as a package. The snag on the retail side: In order for these supposedly simple processes to actually run smoothly, organizations have to overcome enormous challenges.

The perceived 1-to-1 relationship of the end customer is a complex multi-to-multi relationship

If you take a closer look at a modern customer journey, you quickly see that the customer-oriented functions on the one hand and the backend processes on the other form a complex, multidimensional relationship. This means that the shopping experience described above hides a wide range of omnichannel processes that must be used flexibly, because the customer determines how he buys and always expects a high level of service quality.

So in the end it shouldn't matter:

• chow and where the end customer orders (eShops, marketplaces, branches, app, voice, social ...),

• how and where the end customer pays (cash, credit card, hire purchase, voucher, split payment),

• How and from where the package reaches the end customer (own warehouse, FBA, external logistician, third-party supplier, branches, manufacturer or shipping via several warehouses),

• how and where the customer returns, if necessary (in the branch, parcel delivery),

• Which device the customer uses to log in: He would like to see his complete order history and use all service options (e.g. in the backend of the eShop, in the instore app, in a mobile app...).

It is also important during the customer journey that the company always has a uniform appearance and that the brand experience is consistent.

In short: Whatever the ordering process, the customer always demands that they receive their package as quickly and smoothly as possible, that they can return it just as easily and that they are optimally informed at all times. Disruptions, such as the cancellation of an item due to a lack of stock, are now a major annoyance for the customer and often culminate in bad ratings that affect the retailer both online and offline. And: The distances to Amazon or other marketplaces that attract customers with a high quality of service and an almost endless range of products are short.

Omnichannel backend: Welcome under the water surface

Most of an iceberg is below the surface of the water. It's similar in omnichannel commerce: there is the visible interface, i.e. the touchpoints through which the end customer interacts with the company, and there are the backend processes that are hidden from the customer.

This includes, for example, the following tasks:

• Quickly connect different touchpoints,
• Prepare article master data specifically for each touchpoint,
• Keep inventory levels from multiple warehouses up to date across multiple touchpoints to avoid overselling,
• Receiving and processing orders in a wide variety of formats and completing all relevant forms such as B. Create delivery note, invoice and credit note,
• Route orders to the warehouse that is best suited for shipping (e.g. main warehouse, branch, drop shipper, external logistician or manufacturer),
• If necessary, split the order into several warehouses that are different in nature,
• ensure optimal and uniform customer communication for each trigger point (e.g. when shipping the goods, accepting the return, paying out a credit note, cancellation, etc.),
• the optimal integration into the existing IT infrastructure in order not to build up an e-commerce silo.

There are problems with scaling

As a rule, a 1-to-1 relationship (an eShop and a shipping warehouse) will change over time into a more complex multi-to-multi relationship. This means that the number of touchpoints and shipping warehouse options are growing. In order to avoid adjustment programming in the eShop and/or in the ERP system, organizations need a strong solution that maps the backend processes and that is specially designed for such scaling scenarios.

Data and business logic in multiple places

If an IT infrastructure grows, several systems are often used: an e-shop, the ERP system, a system from the external logistics company, a system for connecting to marketplaces and a cash register system. Each system contains customer and transaction data - and its own business logic. That doesn't just make it difficult operationally. For example, let's take a look at support: They often have to log into several systems and have a good knowledge of each one. Bringing together the data from these different pots to create a uniform customer base including history is almost impossible. The result: personalization, comprehensive reporting, good service and omnichannel are a long way off.

Adaptation programming prevents upgradability

Some retailers without a backend solution try to meet the scaling requirements with expensive and lengthy customization programming on eShop and ERP systems. In addition, further interfaces are created, which makes the system landscape even more shaky. Such adjustments z. B. a release change to a new version of the eShop system or the addition of new touchpoints or shipping warehouses is becoming more and more complex and expensive.

So, over time, the iceberg keeps growing below the surface of the water, taking on uncontrollable shapes. The integration of a new backend solution into the existing IT infrastructure and into the operational processes is necessary to prevent this growth, i.e. the creation of an additional e-commerce silo. Such a solution synchronizes all customer data including all relevant transaction data and connects ERP, CRM, logistics or financial accounting systems. Special third-party systems, for example for personalization, automatic text generation, PIM or logistics systems, are also easy to integrate. This is an excellent way to pursue the best-of-breed approach.

The solution: A headless system that organizes the system landscape

If you analyze the existing system landscape, you quickly notice that many systems are connected to one another in very different ways. These are usually systems that are not designed for e-commerce transactions and their highly automated processes. If you were to add further e-commerce systems to this system landscape, it would quickly end up in an interface chaos that sooner or later would no longer be tradable. As a result, the necessary speed in e-commerce is lost; in the worst case, a “dead lock scenario” threatens. Because: The systems can no longer be updated due to too many adjustments and further adjustments are no longer possible due to so-called butterfly effects.

This can be remedied by middleware that works "headless" and also contains sophisticated e-commerce business logic. As a result, data is imported from surrounding systems and passed on to other systems after processing. In this way, existing systems are "decoupled" from the online world. One speaks of the principle of "IT of two speeds". In this way, the complexity in e-commerce is drastically reduced: The existing systems do not slow down the e-commerce business, the business becomes scalable and the same options are available as an online pure player has.

Open to all future touchpoints

A backend system that works "headless" can process a wide variety of formats from different touchpoints and harmonize order and customer data. The connection of new touchpoints is also quick and easy. Perhaps the biggest plus is that the entire business logic can be mapped centrally in such a system.

API: make data and functions available centrally

A prerequisite for a uniform customer experience is that there is a central data view and that functions can be provided centrally via an API for all devices. This makes it possible, for example, to provide the same function for a return via all channels, be it online shop, app, PWA (progressive web app), checkout or mobile sales support. This has the advantage that functions do not have to be newly developed or adapted for each device. And that in turn leads to a faster time-to-market. In addition, each touchpoint can access customer data and transaction data such as purchase history and returns behavior centrally.

No e-commerce without logistics

Logistics is central to e-commerce. While classic logistics systems are not designed for omnichannel logistics, a special backend solution opens up enormous potential in this area. An order algorithm can be used to find the "right" warehouse for each individual shipment, for example based on inventory, proximity to the end customer (georouting) or the cheapest shipping option. A shipping order can also be split into different orders, for which several warehouses can be used. Since the order algorithm takes place directly in the backend and runs centrally, this means a significant speed advantage, so that overselling can be massively reduced.