Excellence at multichannel has become perhaps the most important critical success factor for retailers this decade, not only for retailers, but also for consumer products companies and other manufacturers, as Ann Grackin described in her featured article this week on Demand Management strategy. And it's hard to do it well. Consumers now expect an integrated experience, with freedom of choice, starting with viewing/shopping/researching their buys either online or in-store; being able to order where/when/as they please; making choices in pickup and delivery; and specifying how warranty, service and repair are handled. This touches many different parts of the organization and cuts across systems, platforms, and modules.

A number of companies, such as Sterling Commerce and i2 Technologies (now part of JDA, of course) have made multichannel a key part of their product and marketing strategy. In Sterling's case, when they acquired Yantra, Nistevo, and Comergent over the past several years, they inherited some innovative capabilities, such as enabling store associates to view available-to-promise inventory across all locations (DCs, stores, in-transit) and providing flexible fulfillment options. They have continued to invest in and emphasize the multichannel aspect. In fact, Sterling named two of its main modules Multi-channel Fulfillment and Multi-channel Selling.

Though SAP has a page on its website dedicated to multichannel retailing, it says "In addition to multichannel retailing, these other processes may interest you:" and it proceeds to list Store management, Category management, Price optimization,  Inventory management, Sales order management, Transportation management, Warehouse management, Point-of-sale software, etc.--implying that those are all separate and distinct processes from multichannel retailing. That is the old way of thinking. Serving multiple channels runs through all those processes and functions, and more.  And Oracle, in spite of its strong suite of retail products, barely mentions multichannel anywhere. In contrast, NetSuite's main page for retail is titled "NetSuite Multi-Channel Retail Suite".

Multichannel integration and its impact on the customer experience is of course not new--we've been writing about it at ChainLink Research for the better part of a decade. However, that does not mean that there isn't a lot of work to do and room for a lot of new innovation in this area. And now we've surpassed a critical mass of online sales.

Figure 1 - Online Sales Share of Overall U.S. Retail Sales

In spite of the slow-down last year, online sales will continue to grow at a healthy pace, to be a larger and larger percent of retail (see figure 1). As this growth persists, the importance of multichannel will only continue to increase. We expect that Oracle, SAP, and others will position their products and marketing to address this segment more directly in the future.  And look forward to seeing more in-depth analysis and research from us on this topic this year.