The Arrival of Experience Lifecycle Management: Enabling P&L Owners in the Digital Age
More on Experience Lifecycle Management
Research shows that Gen Z shoppers want immersive experiences combining digital with in-store. Join Rick Chavie, CEO, Enterworks, and Deborah Weinswig, CEO and founder, Coresight Research to learn how embracing ELM drives growth while incorporating augmented reality and AI for the most compelling experiential moments.
Don’t miss “Gen Z and the experience economy: Experience Lifecycle Management (ELM) for growth” on January 13, 2020, at the NRF Big Show.
Digital supply chain, digital customer experience, product experience, and real-time marketing capabilities are reframing commerce management for the digital age. This reframing is highly relevant in the apparel industry, given frequent changes in consumer preferences (often driven by social media) and the resulting diversity of channel outlets that must be served by demand-driven networks that are more robust than legacy supply chains.
Each of these digitally-powered capabilities, however advanced, only address a slice of the challenges facing companies small and large embarking on digital commerce transformations. A few years ago, it seemed that “omnichannel commerce” might emerge from e-commerce vendors as the holistic enterprise approach to delivering cross-channel, B2B2C capable commerce transformation. But the e-commerce software companies were ill-equipped to handle business operations outside the digital channel as they focused their R&D in pursuit of the digital consumer and the allure of the digital marketing venues that serve them.
Unfortunately, P&L-focused executives, such as merchants in apparel retail along with category managers for apparel brands, have been sidelined in the tech gold rush, as marketers garner increasing shares of tech investments that drive revenue lift through such strategies as “next best digital offer,” “dwell times in hovering over products images,” and “abandoned cart retargeting.” These investments, along with advances in AI and machine learning, take personalization to entirely new levels as learnings across large customer sets provide very rich insights into online consumer buying patterns. However, traditional P&L owners must still concern themselves with the hard business of sourcing, physical supply chains and outlets, inventory levels across multiple echelons, and online and offline assortment management.
Experience Lifecycle Management: A Definition
The primary focus on digital marketing has opened up a tech opportunity to enable the management of holistic experiences that P&L owners must still master, especially in the apparel business. Mastery of holistic experiences requires orchestration throughout the diverse lifecycles of products, customers, and content across both digital and physical channels.
The objective of Experience Lifecycle Management (ELM) is to provide P&L business leadership a means to orchestrate and streamline experiential moments in internal and external customer journeys. External customer sets are inclusive, ranging from consumers (B2C) to a broad, end-to-end view that includes product suppliers, trading partners, content providers, and business (B2B) customers. Internal customers encompass business personnel from the supply-side (sourcing, inventory management, logistics) to the demand-side (marketing, sales, customer relations); including admin/support roles. The value of ELM arises from the recognition that there is fragmentation in serving customers today that hinders effective convergence of digital capabilities with the reality of physical commerce.
ELM owners are executives having broad P&L roles: CEOs / COOs / general managers, category/product managers (manufacturing), ecommerce heads, and buyer/merchants (retailing). What they have in common is that they are measured by more than revenue, in their shared objective to shape compelling experiences for all their constituents in bringing products and services to market.
The P&L View of Customer Centricity
We have all heard of mission statements that put the “customer first” or have a “customer-centered” organization. But customer centricity itself is becoming more complex in the drive to deliver differentiated experiences, which, from an ELM perspective, requires:
- Simultaneous segmentation of product and customer. A marketer looks at the customer and fine tunes a message about available products that will lift sales. In contrast, the ELM-focused business owner thinks in terms of making compelling products to generate new customer interest, while applying differentiated messages not just to existing product but also to new customer/product combinations. Further, ELM execs often make large bets on new products with uncertain outcomes – sometimes operating without a net to cushion the fall of unsold merchandise - that goes well beyond personalizing the next click for a consumer.
- Simultaneous engagement of customer and associate. In a self-service digital world, the store associate or the sales rep may not be a consideration. However, in assisted service – e.g., 85% of all sales in retail still take place in physical stores that may require sales or service guidance– sales personnel need to have their experiences enabled for peak performance in their customer interactions, and powered by insights into the customer that may have been gathered online or through loyalty systems.
- Ecosystem view of an integrated supply and demand chain model. There are internal and external customers in the end-to-end value chain that links an enterprise. Digital pervasiveness demands that companies shape the experience of their products, brand, services and customer beyond the edges of their company; they must think and act as a boundaryless enterprise that embraces its trading partners, industry associations, customer support and social networks, and more, to achieve the enterprise experience excellence.
Technology for the Merchant and Category Manager
Category managers in consumer products have more limited tools, often focusing on trade promotion management (TPM) that are more of an exercise in brute force than the 1:1 marketing tools that online marketers have available. While apparel retailers and some brands may have loyalty schemes that provide detailed portraits of individual consumers for some of their customer base, they are still challenged with reconciling those nuanced portraits to online and offline assortments that should address a variety of channels, customer touchpoints, and operating models; while also meeting the demands of a P&L business model that must cover margin optimization, aligning inventory levels, ensuring supply efficiencies, managing B2B and partner relationships, etc. – not just maximizing sales lift from highly select consumer campaigns .
The technology that enables P&L owners to master ELM is called Multi-domain Experience Management (MxM), such as the EnterWorks Enable™ platform, which offers the ability to manage multiple experience domains of product, customer, supplier, location, assets, and more within a single platform as a master data hub. This technology has the potential to allow P&L owners break through the digital waves that have crashed over their legacy business models. MxM links ecommerce with ERP, auto-generates assortments tailored to diverse physical and digital store types, enables insight into attribution for customer offers by mapping buying behavior back to assortments and customer journey insights, the role of merchants and category managers in apparel businesses will experience a true renaissance.
MxM addresses the duality of today’s commerce model, unifying the front office sales focus with back office efficiencies, provides a B2B2C framework for linking the supply chain with today’s demand networks, and more, on the path to enterprise experience mastery.
Return on Experience / Commerce (ROX/C)
As a final note, there will be great importance in being able to measure the returns from improved experiences across demand and supply side engagement. The measurement tool is Return on Experience / Commerce (ROX/C) consisting of inflection point metrics arising from experiential moments contributing to P&L outcomes, including omnichannel attribution.
The arrival of Experience Lifecycle Management will put enhanced profit levers into the hands of the apparel merchant and category manager. The result will be a digital transformation that is truly inspirational for all customer types and reinvigorates the merchant role as the masters of the experience universe.
Rick Chavie leads EnterWorks, a market leader in Master Data Management (MDM), Product Information Management (PIM) and Digital Asset Management (DAM) solutions which comprise the EnterWorks Enable Multi-domain Experience Management platform. EnterWorks is highly ranked as a leader globally by the leading industry analysts.
Rick Chavie came to EnterWorks as CEO from his role as a Senior Vice President at SAP Hybris, having led hybris ecommerce solutions before their acquisition by SAP and previously served as SAP’s global leader for Retail and Wholesale.
Rick also brings industry experience from industry as a retail executive R C&A, a global apparel retailer, and at The Home Depot, as a technology leader in NCR’s retail and hospitality business, and in partner roles at Deloitte and Accenture focused on retail and brands.
Rick is a Harvard MBA and a Fulbright Scholar in International Trade. He is a noted speaker and author on content and commerce and is frequently quoted in industry publications.