[00:00:00.000] We’re just talking offline about the different ways in which customers are shopping, especially very timely now with Black Friday. So we’ll merge that into the conversation, but wanting to introduce the topic, which is going to be unified commerce. And so we have Matt on the podcast today, and I think you offer a really interesting perspective on it.

[00:00:22.260] And I’ll hand it off to you to-We’ll see, I guess, in the upcoming minutes. Yeah, I think we were having that conversation, what is Unified Commerce? It’s a word that gets thrown around, and it’s interesting to see how it evolves. There’s one thing that came out not too long ago, a Victoria’s Secret that you were telling me, the show.

[00:00:39.510] Yeah, exactly. So I think that piqued my interest from just a consumer standpoint is being able to have shoppable TV. And so while the show is streaming live, being able to go onto my Amazon cart and purchase all of the items in real-time. And that got me thinking, what are the operational components that are behind efforts like this? And I don’t think it’s unique just to Victoria’s Secret. You see it shopping on TikTok. You see it… Jeremy just showed us the other day. Walmart and Roku have a new holiday movie. I think it’s called the holiday Jingle. It’s very much like a Hallmark Christmas movie that’s being released on Roku. And if you link your two accounts, anything you see in the movie can then be purchased essentially through a catalog type of experience on Walmart. And And so I think that’s really interesting to be able to just make things a lot more frictionless in the buying experience.

[00:01:36.570] Yeah. And I like your example that you have on Amazon. Actually, Jeremy was also telling us this right before the podcast. And he was saying that on Amazon Prime, there’s metadata that’s actually available that when you’re watching a show, you could identify what they’re using as potentially props, what camera it’s being filled on, so on and so forth, which makes the experience really cool because I know that when I watch TV, sometimes some things stick out, and I’m like, that’s a really neat object, or that’s a really cool pair of glasses, or whatever that might be. And I’d love to know more about it, and I have to use Google Lens, and it’s very tedious, so I end up probably not buying it. Where if it was easy, I’d probably be able to buy it or at least show interest. In it. And I think it’s very interesting to think about all these different ways that companies are trying to reach consumers and how that has impact, overall impact on operation. And I would even take it a step back and just say supply chain as a whole. If you think that the buying patterns are extremely important to understand from customers as well as their interests versus certain marketing campaigns, whatever it might be.

[00:02:41.920] And traditionally, you would look at the orders coming in to your ERP, and you would say, well, I got orders coming in from my Econ website. I’ve got orders coming in from my internal sales team. I got orders coming in from my external sales team, B2B website, so on and so forth, which is great, but it only gives you visibility on the orders that actually been placed. So people that have completed the checkout process. So it’s good, it’s not great. As you’re thinking about people shopping on their phone at the same time the Victoria’s Secret show is going on, it’s great data to be able to understand potential demand even before it gets committed by having that visibility on the website that someone’s shopping on Amazon. But if you take all these different places that people are showing demand or showing interest for a particular product, before it actually gets purchased, that has a significant impact on what the actual converted demand might be. Right now, there’s little visibility for companies to understand that and to see, well, what is the actual demand and convert that to their planning process.

[00:03:45.740] Well, I think that’s where the term unified commerce, in my opinion, has come. Is it semantics? Is it omnichannel commerce? Is it just a rebrand? But I think when you think of it that way, it’s this unification across all the different channels. I mean, we can jump into a bit later what that means in terms of unifying your data. But also it’s the idea of personalization. So not only do you need to have the same experience across every channel you’re engaging with, but you also want, and customers are asking for, a level of personalization. And to your point, that anticipation of demand and that tracking and monitoring of user behavior and anticipating what products they might like and what products they would potentially be most likely to purchase. I think those are two big proponents of this unified commerce.

[00:04:33.940] Yeah. And then I think if you take it a level down, let’s say, and once you’ve actually have that demand or you have that committed order, where is it even shipping out from? Are people picking up in store? Are they shipping out from the The house. What does the customer want? And not only in terms of product, but in terms of experience afterwards? It’s possible if you think of someone that’s shopping for shoes online. It’s great to be able to shop for shoes online, but odds are you’re not going to buy a pair of shoes without trying them on, trying to see if they fit you or not. So yes, the experience goes from shopping online to reserving your shoe in store, to trying it in store, and then potentially paying in store. Or actually, you might want to put a down deposit online, deposit online, then try it in store, and then do a half check out afterwards. Whatever it might be, there’s a lot of different points in time where consumers will look at buying off the internet, buying off TV, buying off the retail store, and then there’s going to be a lot of operational challenges in back of it that result from it.

[00:05:36.750] I guess leading into those operational challenges, each of those touch points is data. And so to start with, you mentioned that your ERP alone is not going to be, or correct me, where all the data is facilitated through. You need to have that common data layer above it all. Can you explain that a little bit more?

[00:05:54.660] Yeah. So the idea is typically, orders will only get to your ERP once they are confirmed orders. But there’s a lot of elements that are really crucial to marketing that won’t necessarily make it all the way to your ERP. So if you think of your different sales channels and the different attributes that you’re going to use in those sales channels to understand the correlation of how those marketing effects work properly, you can’t expect to use your ERP data to actually provide that insight. So what we’re seeing a lot is as people go into these omnichannel experiences, is they’re creating this data layer where orders and demand and other attributes are getting regrouped and people are creating data analytics engines to be able to look at that to become their source of truth and no longer the ERP as much as they used to, because not everything is actually going to make it to the ERP as consumers tend to shop a lot, leave things in their cart or just other patterns that don’t necessarily make it all the way there.

[00:06:57.980] And so with all this unification or conglomeration of data through proper technologies, like I just said, tech stack, then how does that impact the core supply chain function? So when we then look at fulfillment, processing, return, so on and so forth, Can you talk about how that then translates into those core activities?

[00:07:20.370] Yeah. One thing that we saw a lot, especially going into COVID, maybe three, four years ago, is that customers came to us and said, Hey, by the way, our customers’ buying patterns changed a lot. They They went from retail to actually shopping online. And if you think of what the operational challenge to that is, when you are replenishing stores, you tend to replenish stores from your distribution center with pretty large quantities, versus when someone buys online, they’re going to buy one, two, three different items. So your configuration of your distribution facility is going to be very different, where one you’re going to pick by box versus the other one you’re going to pick by each. As you’re thinking wholesale retail, you’re going to pick one order at a time. You’re going to fulfill that. That’s done. If you think of e-commerce, you’re going to want to pick 10, 20, 30, 40 orders, whatever that might be, simultaneously because they’re going to be smaller orders. So the configuration and the technology behind that is actually going to be quite different. Also, the priority in which orders are going to be sent to stores versus sent to clients is going to be different.

[00:08:15.700] So if you think that a store might get replenished twice or three times a week when you order online or even if you order a pair of shoes that you want to try, you don’t want to necessarily wait four days before that pair of shoes gets in the store. You’re anxious now to try it You want to click on it, you want to say, tomorrow, I’m going to try it on, and I’m going to leave from there. So not only the type of order and the size of order, but even the speed at which customers are expecting to receive that and to be able to pick it up is greatly different. So What that translates to is that as all these orders are coming in to the ERP, the ERP or the WMS or the associate system needs to understand what is the priority of that order and send the work to the floor in a way that it’s meeting keeping customer demand or customer expectancy, as well as keeping inventory to a minimum, right? Because you could blow it up your inventory quite easily if you want to have dedicated inventory for each one of your sales channel.

[00:09:13.720] So there’s this balancing act that you need to work with.

[00:09:16.390] Yeah, you really can’t think about each component in isolation with sales and marketing operating on the front end to the technology and the data that’s supporting in the middle to the strategy and supply chain optimization and understanding of the processes, the people, and the engineering, and how it actually works. And to your point, it’s that balancing act between achieving the customer experience that you’re looking for, managing inventory, and then also handling holding costs. And so it’s that trifecta that you’re looking at to get.

[00:09:46.080] Yeah, really. And if we think of the example from a Victoria’s Secret, if for some reason the marketing team didn’t let the operations team know, Hey, by the way, we’re going to let people order online at the same time as we’re doing the show, well, that might have an impact on when they’re expecting that demand to hit. If you have a show but people aren’t ordering right away, the demand might hit multiple days afterwards, versus when you’re letting people buy at the same time as the show is happening, you might have a preemptive spike in demand. So to have that team communicate with all the other initiatives, that’s where I think it gets a little complicated, and you really need to have a dialed in planning process to help you out.

[00:10:24.850] Yeah, I was going to say that’s where S&OP and the cross-department functionality and supply chain planning Yeah, it really is, because when you have one or two different sales channel, you could probably predict demand pretty well because you understand the behavior.

[00:10:38.380] But as you have all these different channels, you have this unified commerce and this experience that you want to give your clients, they all have their particularities. They have when they’re going to buy, what time they’re expecting to receive the orders in, as well as just completely different patterns. And if you don’t have a way of understanding those patterns, it becomes very difficult to to plan demand and to have an efficient supply chain.

[00:11:04.380] Is this something that you have some examples of or you can share some common ways it shows up in different projects and day-to-day work?

[00:11:14.200] Yeah. I think the simple example is really, as you think of inventory for retail stores that actually have an e-com operation that have pickup in store as well. So a common thing that’s going to happen is you’re going to have inventory that’s brought into your distribution operation. And there’s going to be two different ways of managing that inventory allocation. There’s going to be some companies that say, I’m reserving a certain subset of inventory for e-com orders, and I’m reserving a subset of inventory for all my retail stores. And I’m going to allow my stores to actually ship between each other and have inventory balancing through that. There’s others that what they’re going to do is they’re just going to take a higher level of risk depending on what they can afford for their client base. And they’re not necessarily going to split up the inventory between the different channels. And instead, they’re going to try and plan or have more efficient planning so that they’re not necessarily running out or not necessarily competing of inventory. Because one thing we see with a lot of our clients that do split that up is that you end up potentially reordering inventory for SKUs that you still have and have much higher holding costs just because you are splitting it up.

[00:12:25.090] So if you think about, oh, we’re going to do a new promotion, I want to split and reserve that part of inventory a marketing campaign. I want to reserve this part of inventory for another type of campaign. You start creating all these inventory buckets, then that’s when your inventory levels get bloated up. But that’s how you could ensure that you’re actually going to be able to ship everything. So there’s this bouncing up that needs to happen.

[00:12:45.020] It’s understanding what your core functionalities and business processes are and then what those outliers will be.

[00:12:51.780] Yeah, exactly. And by understanding how each of these different campaigns or each of these different outreaches to clients have an impact or the demand is spread out, or you can take an educated guess and have more of a aggregate inventory. So when some of our clients, what they’re going to do is They might have three different ways of reaching clients by the web. So for example, on TikTok, on Ecom, or let’s say for the- Amazon. Yeah, Amazon, whatever that might be. And they’re going to group all that together in terms of just digital commerce. And they’re going to reserve a bucket of inventory for that shared level services versus reserving for each one of them. So there’s ways to aggregate to a certain level by still providing some security that you’re going to be able to fulfill orders.

[00:13:40.710] Okay. Interesting. I’d be curious to understand why you think maybe this transition to… I mean, omnichannel, like we mentioned, is not new, but this digital and physical experience and really pushing forward a customer-first approach. It seems to me it’s taken quite a long time to really pick up, and it’s something Is this something that is only really starting to see in the public eye now. Whether it was pushed from COVID or whether it was pushed from customers becoming more demanding, is this something that is becoming more and more relevant in the projects you guys are working on?

[00:14:14.370] What we see is becoming more and more relevant in the process we’re working on is business to business portal. So direct consumer portals have been there for a very long time. And the operational elements regarding a direct consumer is relatively straightforward. You put in your order, you get it shipped. You’re not necessarily going to ask for a follow up. You’re not going to ask for an order or modification. You’re not going to ask for a credit. There’s not all these things that come into effect.

[00:14:38.100] The caveat being it isn’t as streamlined as you say, though. I’ve had so many experiences where you’ve ordered something and it actually was out of stock and there’s that mismatch. But we’ll skip the D2C and just go B2B in that example there.

[00:14:52.030] But it is true. When people are shopping online and they think that there is inventory available, well, then that comes back to the point where have you reserved or not inventory for that operation because someone else might have stolen it, not necessarily from the e-Comm website, but from another sales channel. And that’s the trade-off that people need to do. But what we’ve seen, certain of our customers do for that, and I think it’s a pretty decent trend around different industries, is that people just identify whenever gets a safety stock of five items or 10 items or whatever they feel uncomfortable with in terms of their inventory accuracy, they will just show as not available, and they’ll show as a future order, but potentially will fulfill it anyway. So at least that way, they decrease customer expectation. They might lose a sell, but that’s what we’ve seen for certain companies whenever their inventory levels, they don’t necessarily have confidence that they’ll be able to ship. Yeah, to fulfill that. But the reason why I brought B2B and why we’re seeing more and more is that as just an overall trend, companies are trying to put more on their clients and reduce their internal sales team.

[00:16:01.820] So one thing that we’ve seen is, especially with the ability to integrate in your inventory management system and provide visibility. And granted, it’s not perfect, as you said. Companies are offloading some of that internal sales team responsibility and exposing their products to other businesses. But there’s some complexity that come out of that, of course, is all the business pricing that’s different than just standard D2C. There’s going to be different shipping So some companies are going to want to use their own carriers. How do you manage that? There’s going to be the whole process of return, which is a lot more elaborate from a business than it is from a consumer. So there’s definitely this trend that is picking up that companies understand the value of being able to offload their internal sales team to the client, and as well as better position promotions or anything that they want to just make available to their client. So if you think that you sell equipment and the equipment has a lot of information regarding the installation of it or the maintenance of it or whatever you want, well, you could offload some of that internal work by just adding it to your business to business website and that people self-serve that reduces the load on your internal team and provides better customer service.

[00:17:19.830] So many moving parts, a lot of different components to think about. The easy answer is just call lead. If you had to give three key insights or components to look out for to start thinking about when you’re trying to streamline and optimize your unified commerce strategy, what would you say?

[00:17:43.380] So the first thing I would think about is what is the team responsible for that commerce or for that channel? And then what is their way of communicating back with the operation when it comes to what is demand, what is the client expectation, and then how does that come and compete for the other channels? Because every new initiative is going to take away from something that’s already gone on. So one of the first thing I would say is really to think about, well, don’t think that this will be secluded just to a campaign, but it’s going to have a rippling effect on the rest of your operation. And then the other thing I would think about is how much visibility I’m willing to give initially into my inventory levels or into my service levels for these new initiatives. I’d probably start a little slower and then ramp up as you go. We saw with Amazon, they got more and more and more and more aggressive as they finetuned their way of delivering to clients. And then maybe at least thing I make sure that I revisit it every three weeks, four weeks. It’s not because you launch something, launch a new commerce experience.

[00:18:53.140] It’s not when and done. Technology these days is something that you maintain month over And if that’s something that you should constantly monitor, and that’s when it comes to thinking about how are you actually monitoring that data, understanding the customer trends, whatever it might be, and pushing that back down to your operations.

[00:19:10.540] Well, you have to. Technology is at the core of everything we do, and it’s just escalating how fast preferences and behaviors are changing. And if you’re not thinking ahead and iterating, you’re probably already behind, right? So I guess it’s a 24/7 process.

[00:19:25.700] Yeah, exactly. And you have to see what people are doing, what works and what doesn’t work, because a lot of the times, a lot of things doesn’t necessarily work right away. So it’s keep iterating on it and make sure that you just include everyone. And that’s it.

[00:19:40.120] Yeah. We’ll for sure be keeping an eye on some of the initiatives that Amazon has underway Especially with Black Friday. I think they’re filming the NFL game. Was it the Raiders versus Chiefs? I want to say. I’m going to expose my lack of football knowledge, but that’s going to be a live shopping on demand experience as well. I know Amazon has a few different ways that they do it. They have the video purchasing, similar to how Walmart and Roku are going to set it up, the catalog associated with it. But they also have, as soon as you’ve paused it, they have reengagement ads that will prompt different items that they think you might like. And they also have carousel ads. So the shoppable ad experience that’s being paired with this live streaming on demand shopping, I think is really interesting. And somebody will keep an eye on to see.

[00:20:28.990] Yeah, I’d be curious to see to what extent they take it. So if you’re shopping during the football game, do they consider what you already have in your basket and you haven’t checked out the target ads regarding that during the show or not? I don’t know. I’d be curious. I’m curious to think about when are they starting to actually in further order when they feel like they have enough commitment on demand to start thinking about the operations behind it. It would be interesting to learn more about that.

[00:20:54.880] Yeah. Well, something we’ll definitely stay tuned for. I appreciate you coming on chatting about it. Was there anything that you wanted to talk about that we might have missed?

[00:21:04.590] No, not at all. I think this is great. And I think this is the start of it. We’re just seeing all these companies just try these different things. And it’s just exciting to think that the supply chain operations are the backbone to all these fund initiatives because everyone always looks at it and says, oh, how cool is it that I can order directly as I’m watching the Victoria’s Secret show? But the cooler thing is that that order is probably be shipped in less than 8, 12 hours from the moment in time that people clicked on the purchase button from the actual show, which I think is incredible in itself.

[00:22:22.640] Yeah, that’s it. That’s the only way. It’s perfect. Super. Thank you for having me.

[00:22:27.520] Yeah. Thanks, Matt.