Magazine Article | December 13, 2013

Mobile, Omni-Channel At The Crossroads Of Opportunity

By Matt Pillar, editor-in-chief, Integrated Solutions For Retailers

A veteran retail solutions integrator says mobile and omni-channel are so intertwined, you can’t determine where one ends and one begins. You should be prepared to sell both.

Paul Civils doesn’t waste too much time trying to distinguish whether it’s much-hyped mobile technology or ostensibly indispensible omni-channel solutions that will ultimately drive his company’s growth in retail and hospitality. He says if you’re trying to pin the tail on that donkey, it’s indicative that you’re approaching your customers all wrong.

Civils ought to know. He’s SVP and GM at solutions integration powerhouse Kyrus (formerly Agilysys RSG), where he’s been developing technology solutions for retailers since 1998. “We see mobile and omni-channel solutions in the same vein, and we’re seeing growth there,” says Civils. “That growth is a result of retailers understanding that their mobile and omni-channel development are directed by the consumer. More specifically, success selling these solutions often depends on the retailer’s acceptance that without these technologies, they can’t keep up with consumers,” he explains. Civils says his customers’ response to that simple question — Are you keeping up with your consumers? — serves as an early indication of Kyrus’ potential for a mobile or omni-channel solution sale. “Retailers are sincerely concerned that consumers have mobile access to better information than their sales associates. Addressing that concern isn’t as simple as deploying mobile devices,” says Civils. In fact, addressing that concern opens up a whole economy of opportunity for solutions providers, including mobile hardware, network infrastructure and security, device management, and often back office enterprise systems like POS and e-commerce. As a result, he says the mobile/omni-channel sale is never canned and usually results in bigger spoils than anyone anticipated.

Mobile Is The Foot In The Door
A look at Kyrus’ mobile business is illustrative of the company’s proactive approach to finding — and selling — the “next big thing.” Civils says Kyrus has been putting retail applications on mobile devices for 15 years, and it was one of the first large solutions providers to embrace the idea that you didn’t need a fixed terminal to transact with consumers. “This opportunity started coming to fruition about 10 years ago with online ordering in the QSR (quick service restaurant) space. More recently, we’ve taken it into retail,” he says. Recognizing retailers’ struggles with disparate inventory, price, and promotions across stores, catalog, and e-commerce channels, Kyrus set to work with the IBM Smarter Planet initiative to understand what that meant to its customer set. “When we blended it all together, we saw the discernible lines between channels fade away. The consumer doesn’t care where merchandise comes from as long as the item is in stock, as advertised, and on time. Mobile devices — in back rooms, on store floors, and in consumers’ hands — are key elements of the omni-channel infrastructure that enables this.”

As mobile goes today, only about 15 percent of Kyrus’ revenue can be chalked up to the sale and deployment of devices themselves. Once that interest is ascertained, however, Kyrus sales associates have a seemingly perpetual line card to discuss with their retail and hospitality customers. To empower associates with mobile access to sales- and service-enabling information, retailers need a mobile device management system. They need secure networks. Most importantly for the solutions provider, they need integration of legacy back office and e-commerce systems to the mobile front end. For Kyrus, the demand for mobile spells the opportunity to tie retailers’ IBM 4690, Microsoft, and SAP systems to that front end. “Once retailers experience the power of legacy and back office systems in their associates’ hands, you can add all sorts of application sales opportunities around it,” says Civils.

Price checking, cyclical inventory management, and customer- facing CRM and clienteling applications that allow associates to stay task-focused and on the sales floor are typically hot discussions for Kyrus.

Addressing the integration of back office and mobile applications also often leads to the discovery of opportunities to integrate other floor-level devices — such as kiosks, digital signs, and price checkers — with back office and e-commerce systems. “As the sales approach goes, mobile tunnel vision and/or ignorance of the omnichannel connection with both mobile and fixed store-level devices are big mistakes,” says Civils. “If you can help build an infrastructure strategically designed to engage and keep consumers in a store or channel — to facilitate the consumer’s acquisition of products from your customers — then there are big opportunities for you in the current retail environment.”

If Omni-Channel Retail Is A Foreign Concept, You’re In Trouble
Retail is an extremely competitive business, and for forward- thinking VARs and integrators, the most competitive retailers present the best opportunities. In the past, Kmart’s biggest competitor was Walmart. Walmart’s biggest competitor was Target. To make a sale, all a solutions provider had to do was help a retailer make its in-store systems better than those in the store across the street.

Today, that’s all changed. Civils says that when he asks his customers who their biggest competitor is now, they almost always say Amazon. That’s an uh-oh moment for the omni-channel ignorant VAR or integrator.

Subscribe to Business Solutions magazine “Amazon created the showrooming phenomenon — any store is their showroom,” says Civils. “Interestingly, our customers want to both beat Amazon and become Amazon,” he says. In other words, they want to create perceptions of channel agnosticism, product and service expertise, and fulfillment magic. They want to achieve that perfect balance between always having their top 800 best movers on hand and the capability to get and fulfill everything and anything else. “If they don’t have an item in stock, they want to create a seamless way to get it to the customer anyway. That’s where the back end has to hum and tie into the mobile front end. Retailers need inventory systems that cross stores, platforms, channels, brands, and even reach back to the manufacturer. This is where the great opportunity lies for solutions integrators,” he says.

Still, Civils says, the new consumer-driven reality is lost on many channel players who remain inwardly focused on the business challenges associated with making profit in a rapidly changing market. Looking outward at the challenges that create both opportunities and obstacles for your customers — challenges like consumer empowerment and cross-channel synergy — is the key to channel survival. “Whoever made that last buggy whip was probably awesome at it, but nobody needed it,” quips Civils.

Of course, realizing that it takes a new skill set to compete for today’s precious retail technology dollars is easier than acquiring those skills. For its part, Kyrus hasn’t been afraid to expand its partner network to quickly meet customer demands when its own portfolio of solutions doesn’t fit the bill. “We’ve tied ourselves with an ISV network that we can partner with very quickly to take advantage of the solutions they’ve created,” says Civils.

The Future Of Channel Sales In Mobile, Omni-Channel Retail
Civils’ observation of the new pull-through hardware sale has reformed Kyrus’ sales approach. “We don’t go after dollar-for-dollar hardware profit like others do. We have no inside sales force. Instead, we’re investing in hybrid salesmen/consultants/project managers we call our solutions delivery group, who can demonstrate an understanding of the customer’s situation, issue, problem, or requirement and roll that into a what-if scenario,” says Civils. “These are people who wake up in the morning thinking about Big Data, analytics, and omni-channel retail. They’re the people you need to compete in this environment.” The company is vigilant about employing customer-facing associates who understand larger retail trends, those with enough skills and experience to say, “I’ve seen this challenge before, here’s how we handled it, let’s discuss whether a variation of that would work for you.” Civils says it’s a highly consultative, reference-based sale that requires seasoned, knowledgeable engagement with customers. “From my perspective, if a potential customer says, ‘Here’s an RFP — I need a price,’ then we’ve already missed the boat.”

Civils’ advice to integrators is to get under the hood and act as a partner from the outset of the customer’s determination of requirements, as opposed to accepting a role as a transactional player. He admits that its veteran staff — many came from IBM or retail — makes this a bit easier for Kyrus than it is for most, but he suggests consultant-led training for sales representatives is a key step toward the consultative sales effort.

Civils also offers some target audience advice. While the CIO was once the most revered executive at the bargaining table, he says the CMO (Chief Marketing Officer) is now considered the new owner of both the business problem and the budget to fix it. “Retail budget decision makers care about customer loyalty. They care about marketing to the millennial generation and meeting the omni-channel consumer expectations we’ve discussed. The CIO will help support that, but marketing and merchandising are the budget holders,” he says. If your only POS contact is the CIO or other IT professionals, you’re probably already guilty of missing the earlier-referenced boat. Sure, you’ll work with the CIO on the specifications — hardware selection, network security, wireless access points, etc. — but if that’s the extent of your conversation with customers, you’re missing the key to bigger and more profitable sales. The key to those, Civils says, is understanding the business problem and what to do about it. “Today, that understanding is more often than not coming from the CMO and executing through the CIO,” he advises. It might be difficult to get your head around the idea that consumer knowledge — not hardware configuration — is the key to technology sales, but Civils calls it imperative. “How fast do you need to get there? Yesterday,” he quips.

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