This article was written by The Business of Fashion in partnership with Cegid.
Through Cegid’s unified commerce platform, retailers can combine analytics and create a single view of their operations, from supply chain management, including forecasting and planning, store management and distribution services, to mobile POS (point of sale) systems. In connecting these distinct elements, clients can find operational synergies and optimise a seamless shopper experience.
Aimed at improving the operational ability of luxury and fashion brands specifically, the company has created a tailored solution that reflects both the reality of the luxury fashion market’s limited stock and the requirements for flexible, premium and luxurious service, including customisation and personalisation.
Now, Business of Fashion (BoF) sits down with Olivier Chiono, Cegid’s retail product management director, to hear about the advantages of unified commerce and why the company has doubled down on its omnichannel retail solutions and capabilities to ensure a premium, single customer-centric level of service across all touchpoints.
What opportunity does unified commerce represent for the luxury industry?
In unified commerce, the retailer seeks to break down channel silos and deliver consumers a coherent and frictionless shopping experience across all touchpoints. This is essential to deliver on customer expectations, while also enabling the retailer to capture new sales without eroding profit margins.
The first major opportunity is regarding current stock. Luxury retailers do not currently leverage the availability of product in their retail network and online fulfilment centres enough. When it comes to luxury, the “pull model” on which it operates — whereby, based on the buying season, the store itself is often responsible for selecting the product for its individual local customers — means that there is no single catalogue of what’s available and where.
With their historical pull model, the product was simply allocated to the store. Following the buying season, product was simply assigned to a store and would remain there — even if it was not sold. Additionally, the percentage of e-commerce sales against offline sales has been quite small within the luxury market. We saw the consequences of this during the Covid-19 lockdown period, with sell outs online but overstocks in-store. Furthermore, unlike other retail sectors, many [luxury brands] did not possess strong online presences and so were unable to help compensate for the loss from in-store sales. Unified commerce can better manage stock across all channels and improve customer conversion rates through an omnichannel approach.
Why is that opportunity growing?
[Store associates] have to collaborate more and more to try and find a way to satisfy the customer. In the old era, the luxury customer traditionally built a relationship with their own personal shopper at one store. However, today, in a time of digital discoverability, perhaps the product your customer is looking for is not in their boutique of choice, but available in another location. As a result, sales associates need to have a unified view of the stock — even if this view is not directly shared with the customer.
Creating a single, easily accessible catalogue, not only of the stock in the distribution centre, but [also] the stock in the store network capable of fulfilling a customer’s order, gives brands more opportunities to respond to customer demand, by having a granular view on exactly what is available to buy and where it is, and even allows them to consider the logistics of fulfilling orders — taking into account carbon footprint requirements too.
The absence of tourist spending has also demanded a rethink. Prior to Covid-19 in Paris, 70 percent of transactions were made with a complementing tax refund for tourists. Now, that spend counts for less than 10 percent of transactions. With so few people travelling, the luxury sector has had to switch from global shopping to local shopping, which commands a different approach.
How does unified commerce alter the path-to-purchase?
When it comes to unified commerce, the contact between a consumer and the boutique or online touchpoints becomes more streamlined. It tracks the customer at different touchpoints. The consumer can start their journey online, continue in-store with no disruption in the process, with their wish-list prepared online, ready to share with the sales associates in-store and continue the process through to the payment step.
In the luxury segment over the past three years, we have seen rising demand of the store associate to be more mobile-oriented, with brands bringing in sales through the smartphones of the sales associates. In the new normal, luxury and fashion store associates now have to manage distant sales much more frequently, which is not at all the same process and has required some innovation around the use of the smartphone.
Likewise, the store associate’s role has evolved to manage more complex omnichannel strategies including curb side pick-up, BOPUS and BORIS, and ship from store capabilities, and they need centralised tools to help them facilitate this.
How can Cegid tools evolve the customer experience?
Our software empowers in-store sales associates so when a customer visits their preferred store, the associate knows their shopping history, orders and preferences. If the customer wishes to pre-book a store appointment or join the brands livestream session, the associate is armed with product information, stock availability and the customer insight needed to deliver a personalised shopping experience.
We have also integrated some one-to-one communication feature from a clienteling approach, to allow the sales associate to send text messages to customers and interact with them via social networks. A lot of our customers have told us that, from the lock-down period, they have new selling journeys that provide better service.
Why does Cegid believe utilising customers smartphones in-store can improve the customer experience?
Self-service kiosks, where the customers can browse product or order product, are not a good fit for luxury as it is not at all what a luxury customer wants to experience. But we believe if we can uphold that level of service, but bring the transaction and elements like a wish list to mobile, it will provide a great experience. Imagine a customer comes into a store and the associate can share the product information directly via mobile. Even if [they] do not want to purchase this on their mobile, they can keep track of the product, ready to revisit online or back in the store at a later date. It’s a way to interact seamlessly through mobile and a good opportunity to rethink the in-store experience within the luxury business.
With the rise of the smartphone and mobile capabilities in this context, luxury must consider that tomorrow, everything imaginable in-store could be completed through a smartphone. We believe that brands must equip their store associates with smartphones, then think about the interactivity between the smartphone and the sales associate, and the smartphone of the customer.
As the path to purchase continues to diversify, brands must consider the required apps to manage more operational processes in this way. Apps for sales, but also apps for back store operations when it comes to the collecting reserved product. It is why [Cegid] has invested in multiple platforms, including for iOS — to provide a comprehensive set of business processes that can be managed on a smart phone.
What growth levers do you believe will be most relevant to the luxury market in the near term?
The [luxury] sector should accelerate omnichannel, invest in their online presence and increase the percentage of their product visible online to simply attract more sales opportunities and offer visibility. Beyond online, [luxury retail] should also rethink the in-store relationship with the consumer and what that experience achieves. However, it must move to more dynamic management of store inventory — at least at the country or regional level, in order to analyse where the goods are sold, where there is a shortage and to find an equilibrium. To balance the stock between different locations is to have what we call DRP (distribution resource planning). To have the capability to have the goods in the right place and at the right moment to optimise sales will make for a much more dynamic and profitable system.
However, human-centric strategies are still key. This technology is there to help foster stronger in-person interactions. Retail is still firmly about entertainment and experience. Customers need this — even more so during these difficult periods. Technology is about making this people-oriented industry future-proof.