Unified Commerce: Apparel Needs it Most, But Also Least Ready to Make the Leap
Three out of four IT executives strongly agree that developing unified commerce is important to the success of their business, but just more than half believe their companies have a clear plan to execute it and less than 50 percent believe they have the right technology in place.
This lack of preparedness is even more profound in the apparel sector where only two in five believe they’re prepared to leap to unified commerce, a rate that drops to just 30 percent among those that also run physical stores.
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These were the results of a study conducted by Bain & Company that surveyed more than 300 IT executives and was shared at the Aptos Engage 2023 conference in Las Vegas on Wednesday.
“Unified commerce is kind of becoming something you absolutely need to have,” said Bala Parameshwaran, management consultant in Bain & Company’s Technology & Analytics and Retail practices. He pointed to data showing that “the larger you are, the more important unified commerce is for you.”
“For billion-dollar companies, it’s an existential capability you need to have, not only to meet the needs of today, but to future-proof what’s happening because channels are only going to be added, not subtracted,” Parameshwaran added.
The survey found that while apparel companies expressed a stronger need than electronics and home improvement stores for developing unified commerce, two-thirds of those businesses expressed confidence in meeting the challenges.
Some of the challenges unique to apparel companies are their need to connect with customers on a personal, in-store level and to use that physical presence to convert potential customers. All this brick-and-mortar amounts to what Parmeshwaran likened to the bulk of the iceberg, underwater, as opposed to the “tip of the iceberg,” which is the level to which companies have begun to adapt to this new norm.
The Bain survey found that IT execs report four key building blocks to actualize unified commerce—alignment between the business and technology side of the company, collaborations with other organizations, availability of financial capital and the ability to integrate new tech solutions into legacy systems.
The Bain study also found that many IT executives do not feel CFOs and CEOs spend enough attention and energy on technology issues.
“A lot of times they’ll just throw it over the wall and say, ‘it’s an IT problem, go build me this warehouse or inventory management system without really thinking it through,” Parmeshwaran said. “But IT is part of the business, which means nothing is disjointed at all—it’s all an organizational challenge. We believe CFOs and CEOs are not bought in. They need to sit through the value conversation, the ROI conversation, where it needs to be done on the business side and the IT side.”
A unified commerce platform connects a company’s systems for back-office, customer-facing commerce and store functions in a single solution, but, as Steve Ross, Aptos senior director of global omni solution principal told Sourcing Journal, most C-suite leaders don’t always know the difference between it and the term omnichannel, which integrates in-store, mobile and online sales. Omnichannel does not include services like inventory tracking.
“We literally have to explain it,” Ross said. “It’s kind of like the movement from dot-com to multichannel to omnichannel.”
Ross gave the example of one Aptos client who was using the customer-facing parts of the software platform, but not the inventory merchandising system. As a result, that client was sending inventory to the slowest-turning stores rather than the ones that had the most need.
“That’s a big difference, and so by making that tweak of a rule change, we really hope that’s going to help them for the holidays this year, but you don’t get that until you get those linked systems,” Ross added. “With universal commerce, you get customer-facing order management, POS, website—all of those are part of the equation, but also what the customer doesn’t see, especially merchandising, allocation, all of those flow in as well and you need that front end and back end to balance out the equation. Where order management and omnichannel kind of fail is they don’t have inputs from the other system, and companies tend to oversell, customer orders get broken and that leads to cancelled orders at the end of the day.”
