I wrote yesterday about how at NetSuite’s annual user conference in San Jose this year, the cloud company was making significant investments in its horizontal platform capabilities - whilst still mulling what verticals made sense for it to pursue on its own.
The short of it was that NetSuite believes that if it has a mature platform, it is in a good position to both build out verticals on its own and also urge partners and customers to do developments that it doesn’t see the need to do itself (for example, in some mid-market industries).
However, one vertical that NetSuite has been pushing deeper into over the past couple of years is retail, with its SuiteCommerce solution.
NetSuite’s proposition is that in the age of multi-channel, multi-touchpoint customer engagement, it doesn’t make sense to simply bolt an e-commerce solution onto your ERP system - the two need to be tightly integrated to ensure you can deliver on customer expectations. But more on that later.
Today NetSuite announced further extensions to its retail offering, with the release of the NetSuite Retail Apparel Edition, which has been created to help address the growing challenges of apparel and accessory retailers.
NetSuite has said that traditional ERP and retail management systems have “failed” to effectively serve apparel businesses in the past, where the purchasing of one-off, disparate systems has resulted in multiple data silos that are costly and lead to a poor user experience.
It believes that by tightly integrating a specific front-end solution for apparel retailers with NetSuite’s back-end ERP system, it will be able to give customers an end-to-end tool that allows real-time reporting, planning, financials, supply chain insights, inventory management, with the front-end engagement piece having the same insights.
For example, you don’t want to be able to see a dress online that you’d like to buy, only to find out that there is no stock for delivery, or have no insight into whether your local store has it available. Integrating the two should solve this problem.
Some of the key features include:
- Unified online and in-store shopping - which includes features such as store locator and inventory by item, giving shoppers insight into stock availability across all channels. Store pick-up enhancements have also been added, including email alerts to customers to notify them when an item is ready.
- Improvements to the online experience - NetSuite is pushing apparel and accessory specific website features, with the addition of an Instagram hashtag gallery (allowing you to manage galleries of Insta images from brand influencers), a size chart and a lookbook.
- Optimised inventory allocation - enabling the system to “intelligently” choose how to fulfil orders based on inventory availability and pre-defined business rules.
- Merchandise management - the aim being to remove some of the manual processes for entering sales, purchase, transfer and bulk orders.
- Retail business operations - which now includes preconfigured dashboards, with instant access to inventory manager, store manager and warehouse manager. And predefined reports, KPIs and metrics, which are specific to retail apparel (e.g. top selling item, units per transaction, shrink reports, sales per hour, retail stock-ledger).
The ERP/CX gap
Andy Lloyd, NetSuite’s general manager of commerce products, took to the stage today for the company’s retail keynote presentation (a new format for SuiteWorld) and warned that companies that want to be competitive in the retail market can’t rely on poorly integrated front-end customer engagement and back-end ERP systems.
He argued, which supports the NetSuite product offering, that retailers need to be operating around a single version of the truth.
The focus on customer experience differentiates NetSuite from other providers. [Traditionally] the ERP and financial system was locked away in the business where your employees accessed it, but your customers were completely separate. As your customers interact with you more and more online, that customer experience is becoming more and more important and the role of ERP is really changing.
ERP is going from being a primary system used to a run business, to one that needs to be designed and implemented to serve your customers better. It’s critical that touch points be built on truthful and accurate information.
Lloyd said that since the internet has come along, there has been significant extinction in the retail market. Stores that used to be able to isolate themselves from the rest can no longer do that because consumers have visibility into inventory and price from a number of huge providers online e.g. Amazon. Those companies have “largely disappeared”, he said.
He added that the operational efficiency continues to be critically important, but the customer experience is becoming far more relevant.
What you want to do is orient around the customer…and create an offering around the customer that builds loyalty. [Companies] need to be laser focused on providing what the customer wants, rather than defining themselves what they think the customer wants.
Lloyd added that this means that IT can no longer just focus on supporting the needs of employees, but that it needs to focus on making customers excited to do business with their brand. NetSuite believes that you can’t do this by integrating any old e-commerce system, but need one system that can do it all. He said:
Those systems aren’t built on a single version of the truth, you don’t know if you have the accurate enterprise data to serve those customers. It puts the customer experience at serious risk, they may be placing an order that doesn’t exist.
We have pulled together the back-end system of record with the system of engagement. What we’ve done is being a system that goes from the back-end, to being a system that can run all of your business.
Customers that see something online but can’t buy it in-store, that’s a frustrating experience. We believe that by building this on top of our core systems, we can improve that.
Lloyd said that there were five pillars that retailers should be considering if they want to be able to
compete in this multi-channel, complex retail environment. He, and NetSuite, believe that unless you’ve got all of these things at your core, your business is going to struggle to keep up with the competition. The five key areas, according to Lloyd, are:
- A 360% customer view - ask yourself, do I know everything about the customer and is all the data in one place?
- Innovative experiences - Do you have a platform that is flexible enough to enable the types of experiences you want?
- Intelligent order orchestration - You need a platform that allows you to use your inventory more efficiently and ensure you’re serving your customers well by giving them access to inventory to wherever it may exist inside your organisation.
- Unlimited expansion - Do you have a platform that allows you to expand globally? Do you have a platform that allows you to add additional brands? And can you do so cost effectively?
- Single Cloud platform - do you have a cloud-based system? The rate of change is too fast, if you’re trying to cobble together a system where you are manually upgrading and patching different systems and trying to make them work together, you will never be able to keep up with the pace of innovation.
NetSuite has had a strong play in the retail space for a couple of years now and you are beginning to see it win contracts with some of the bigger brands outside of the mid-market, which is a good indicator of its progress.
I suspect that one area that may be a challenge for NetSuite in terms of selling in to companies, is that I’ve seen increased preference for retailers to build their own e-commerce front-end with a big digital team, as they see customer experience as a key differentiator. I think there is a perception that a lot of the vendors out there can’t compete on functionality and personalisation requirements.
That being said, from what I’ve seen today at SuiteWorld, NetSuite’s offering looks very, very solid. And with the lack of talent in the market, it may make more sense to go with a company like NetSuite that has most of what you need. I suspect NetSuite will also continue to deepen its capabilities within the retail vertical as time goes on.