What is Unified Commerce and why is it so important for fashion retailers?

Although the term has been around for years, Unified Commerce remains somewhat of an emerging concept for many retailers. A recent survey conducted by Bain & Company global consultants, on behalf of Aptos, the retail technology solutions platform, found that the fashion industry still remains largely unprepared for it. However retailers are enthusiastic about Unified Commerce and 75 percent of respondents said it was a very or extremely important element of Customer Relationship Management (CRM). The majority also agreed that it would benefit other areas such as profitability, employee experience and inventory management. But while 75 percent of retailers think their company has ambitious UC goals, only 55 percent believe their strategy is clear and well-defined.

So what exactly is Unified Commerce? Is it an expansion of that other buzzed about term of recent years, omnichannel? FashionUnited reached out to Nikki Baird, VP Strategy at Aptos. “It’s like an evolution maybe, in the sense that omni was about trying to break down the barriers or ease the integration between channels,” said Baird, but added that Unified goes further to avoid duplicating processes. Unified Commerce connects omnichannel’s customer-facing focus with the all the myriad backend systems associated with running a retail business. “Promotions is a great example,” said Baird. “You have your merchandising system which can set promotions, point of sale systems can also set them, and you have your ecomm order management system that sets promotions for online and all three must be in synch.”

But often they are not and that’s a problem. Customers should receive the same promotions however they choose to shop and so Unified Commerce enables retailers to have one promo engine that serves all channels. Said Baird, “From a technology perspective Unified Commerce means much more than just omnichannel because it simplifies and reduces the complexity and level of integration required to begin with, rather than connecting the dots after the fact.”

Studies show that successful implementation results in companies experiencing higher organic sales growth than their peers. Prioritizing investment across tech is key, not just focusing on the sexier front-end and user experience channels - the website, app, social commerce, and in-store point of sale - but also the underlying technology to facilitate loyalty programs, warehouse data, search and pricing engine. There is very little about retail that Unified Commerce doesn’t touch. Experts agree that investment in it is critical to delivering a holistic seamless customer experience, something that every retailer needs to prioritize more than ever before. Customers now expect the online shopping experience to be reflective of the physical store while a visit to the store should provide them with the same level of personalized experience as they would receive online. Unified Commerce operates to maximize efficiencies by removing all barriers between online and offline commerce.

Fashion industry enthusiastic but hesitant about Unified Commerce

If it’s so exciting to retailers why does execution of Unified Commerce prove so challenging? The retail environment is changing almost daily with new consumption patterns, the expectation of ultra-convenience and a personalized customer experience keeping brands on their toes. Add to this concerns about inflation, recession, global unrest and the rapid growth of generative AI, and the prospect of implementing new technology might currently seem overwhelming.

But the delays tend to come down to problems that are more pragmatic: organizational alignment, lack of expertise, budget constraints and an unclear ROI. Brands must unify within the organization first in order to sufficiently commit to Unified Commerce. 1 in 5 companies see significant divergence in priories between IT and other departments, but Unified Commerce cannot be exclusively an IT responsibility. Everyone must be on the same page. Ease of deployment and ability to integrate are important for successful implementation and brands must check in with store operations to ensure that the technology is easy for them to use and that it is making their jobs easier.

According to the Bain survey, retailers chose point of sale and inventory management as the areas of their business they believed would be most positively impacted by Unified Commerce, 70 percent respectively. 65 percent selected customer engagement followed by marketing and order service management.

Retail categories are investing in technology at different levels and according to a November 2022 Retail Customer Technology Survey by Bain, the apparel industry spends 33 percent on technology compared to a 31 percent spend by general merchandise stores and a 29 percent spend percent by food, drug and convenience stores. The coming months will surely demonstrate if the fashion industry widens its lead over other industry and whether it matches its enthusiasm for Unified Commerce with the investment to roll it out successfully.