Directors of Lowe’s Companies Inc. credit the home improvement chain’s 33% fourth-quarter gain in online purchases delivered from a brick-and-mortar store to its omnichannel sales approach. Photo by Mike Mozart via Flickr

Directors of Lowe’s Companies Inc. credit the home improvement chain’s 33% fourth-quarter gain in online purchases delivered from a brick-and-mortar store to its omnichannel sales approach. Photo by Mike Mozart via Flickr

The current retail landscape is filled with buzzwords and strategies that often address a multichannel approach — or "omnichannel," as it is better known in the automotive industry. In past years, hundreds of press articles and collateral have been released discussing which retailers may be embracing omnichannel strategies to better ensure the success of the retailer.

For franchised auto dealers, this strategy encompasses online research, lead-gen activities, and in-showroom transactions. Having the right omnichannel strategy may be one of the most important factors in a business built on high-volume, low-margin transactions.

Online to Instore

In a parallel example to automotive, Lowe’s Companies Inc., best known for its namesake chain of home improvement and appliance stores in the United States, attributes much of its growth and success to its omnichannel approach. The company’s directors credit the integration of online and instore sales, coupled with a combination of order fulfillment, with increased earnings in the final quarter of 2017. They reported that online purchases delivered from a store saw sales growth of 33%.

Although physical dealership locations remain a vital part for automotive, the increased use and accessibility of the ecommerce platform has had a profound effect on the shift of instore processes and procedures. According to Euromonitor International, a market research firm, U.S. retail stores decreased by 0.1% in 2017 from a year earlier, the first downturn since 2009. Dealers today are grappling with consolidation and falling sales.

Physical retail stores are now embedding the same instore technology that shoppers leverage in an online environment to enhance the customer experience. Some of these advantages may include facial-recognition technology alerting the arrival of loyalty program shoppers, how-to videos, and even screen technology to show customers what they’d look like wearing new apparel.

Naturally, all these changes also mean a change to employee and back-end processes.

Backed by BPM

It should be noted that no omnichannel strategy can succeed without an effective business process management (BPM) solution at work behind the scenes. BPM is the technical process and conductor that ties together today’s retail business model. BPM solutions integrate corporate processes and multifaceted procedures that touch both the back-end functionality as well as the consumer-facing user experience.

Auto retail today is much more complex than it was in the past. Single-roof dealers looked significantly different several decades ago. Owners and GMs must now consider all facets of business management. From customer relationship management, sales planning and accounting, the sale of financing and protection products, to the logistics of order fulfillment, retail is now run by a web of integrated data-driven technology systems.

Of course, none of these systems were built at the same time. Older technology systems are now forced to quickly adapt to ensure that all other systems in the dealership run efficiently.

BPM is the tool that keeps these systems running efficiently, interdependently, and continuously. As a result, the customer never sees BPM. They experience the benefits during the buying process. When the process runs as intended, the customer experiences BPM through shopping, point of sale, fulfillment of order, and customer service. BPM becomes the central intelligence enabling the dealer’s success.

BPM adoption happens in two key steps: First, the technology helps to create a model that outlines the right process for each of the retailer’s moving parts. Second, it enables the creation of workflows that pull employees, processes, decisions and technology into a seamless, transformed system.

Specific to auto retail, dealers can incorporate several key initiatives into their organization to help identify where and how to implement a successful BPM solution. You can structure your system in a way that can identify key metrics and ROI. This includes steps such as benchmarking to identify key areas within the organization where BPM can offer the largest impact, as well as simplify certain workflows.

Mark Holenstein is COO of Signavio and a leading expert in the field of business process management for retailers.

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