Omnichannel D2C POS: Is Your Website Your Point-of-Sale System?

A common challenge native Direct-to-Consumer (D2C) e-commerce and Web Marketplace companies face during their growth is channel expansion beyond their initial online marketplace.  Commonly, the first channel expansion is over the phone, where the organization is now taking orders or collecting leads away from your website for the first time, likely entering them in-house.  Later, you might expand into retail, wholesale, B2B, or even automated retail.  But how do you take these orders?  Is your Website your Point-of-Sale System (POS)?  Here’s what I’ve learned from three different approaches and their tradeoffs.

Your Website IS Your POS

This approach is just like it sounds.  All orders are entered into our website regardless of which type of user is using the system (your staff or your customers).  Have you heard this before? “Let’s just put the orders in on the website.”

I’ve been part of that conversation and championed this approach more than I’d like to admit.

Here’s what I learned:

Benefits

• Your website already exists and is taking production orders.  Set-up time is fast and it’s connected to your back office systems – i.e. ERP, CRM, and finance platform (even if you’re small and those are just a database).
• It puts your teams’ eyes on the core site more frequently; making it easier for your team to understand the customer’s shopping experience which can encourage more empathy for the customer in-house.
• New features that you launch on your website are immediately available to your new channels as well, for your sales teams’ use in addition to your online shoppers.

Drawbacks

• Your site is being optimized for the customer via AB testing which can lead to an unpredictable experience for your sales team.  For example, payment type testing might result in changes to the ways customers can pay.  That’s great for an AB test, but it affects your sales team operationally if the ability to split payments disappears unexpectedly.
• Channel and Sales Rep identification in your dataset must be solved with a hack of some kind.  Otherwise, distinguishing which channel or Sales Rep generated the sale will be challenging.
• The interface is designed for your online shopper, not your sales team, power user, or retail customer.
• Your website may not be able to meet the security and compliance requirements in all environments.  Particularly if your company must adhere to the requirements of being public.

Never say never but consider this solution only in special situations.  I am guilty of utilizing this approach in both Phone and Retail environments.  It can be helpful when launching a new channel or for a 1-time event like a pop-up retail operation or a conference.  But if your new channel is successful it will become more sophisticated and require higher volume.  You are likely to experience scalability issues and find yourself limited fairly quickly.

Separate System for Each Channel

In this model, each channel uses a monolithic POS system that is designed for that channel where UI, business logic, and data access are self-contained.  There are actually two sub-options to choose from.  Off-the-shelf products or build a custom solution.  In either case, you may implement the new platform on the back end to your existing ERP so basic functions like fulfillment still occur seamlessly.

Benefits

• Each system can be optimized for its channel (or comes out of the box that way), giving your staff power-user features that might not be available on the website.
• Customer service features like customer order history and order tracking can be baked into the phone sales channel more natively than your website and you don’t have to invest as heavily in UX optimization in systems your staff use (because you can train them).
• Site optimization and AB testing don’t interrupt Retail or Phone operating procedures.
• Sales through each channel are more easily identified and a suite of analytics capabilities become available to evaluate each channel.

Drawbacks

• Multiple systems can be costly to implement and maintain
• Sales information is reaching your ERP from multiple sources, which can lead to inconsistency in the richness and completeness of data objects and fields.
• Problems can become more difficult to detect and analyze.  Forensic analysis may take longer and consume many hours from your engineering and analyst groups.

Proceed with caution If you decide to roll your own app with this model.  This is becoming increasingly common.  It’s a fun project for your technology teams and likely what the stakeholders for retail, phone, etc will advocate for.  However, you must carefully consider the ROI of creating your own app, including ongoing maintenance (the “rent” you will pay on this software).  Deploying your technology team to this application may be costly and when the rubber hits the road it will take a back seat to your core product, making it harder to keep at feature parity.  If you roll your own app it can become a liability for your organization as well if it does not receive continual investment.

Hybrid Omnichannel

In this model, each of your channels has its own user interface but there is no business logic or database associated with a channel in its own app.  It’s simply a “skin” so that the UI, and only the UI, can be optimized for each channel’s specific use cases.  If you have an omnichannel business strategy this strengthens the argument for microservice architecture so that data and functionality are available across all channels.  Even as your custom website becomes more tailored to the specific needs of your customer, you can deploy out-of-the-box solutions available for other channels, particularly the ones where the users are your internal staff.  Whether you choose a 3rd party solution or go custom, the UI connects to your existing services or simply drops in as a plug-in if you are on one of the more commonplace commerce platforms.

Benefits

• The UI can be tailored to each channel’s users, whether they be internal users or customers.  If done well this will optimize both sales and operations.
• Custom UI is more feasible from a cost perspective.  Rolling your own UI on top of existing services that adhere to a hardened interface will require less investment than maintaining your App.  And possibly less than integrating a 3rd party application into your environment.
• There is little to no work for your back-office systems or technology teams.  Platform modifications are minor depending on how your microservice architecture is designed.
• Distinguished UIs allow for the proper channel-specific data and analytics to be captured.
• Your business, from a technology perspective, is truly Omnichannel, rather than just Multichannel because your tech platform is truly one.  Whatever happens with a customer in one channel is immediately known in other channels in real time.

Drawbacks

• Requires existing microservice architecture implementation, which has all the associated complexities of any distributed system and may not be best suited for small companies that have not yet reached a level of scale.  For businesses in a monolithic structure, up-front investment may be high.
• If you experience an outage in the underlying system, it may be more likely to have cross-channel impacts.
• If developing a custom UI for your phone or retail team in this model, development costs are still non-trivial.

In summary, while using your website as your POS may help you get a new channel off the ground, you are likely to outgrow it quickly.  Using the same platform for all channels is ideal from both a technical and business strategy perspective and enables a true Omnichannel operation.  Your approach to achieving that varies with the uniqueness of your business.

Generally speaking, you want to go from the bottom up as far as possible in the stack before diverging for channel-specific technology needs.  Ideally, to the point where the divergence is limited primarily to the UI and you just have a different “skin” for each channel that communicates with your platform via a suite of common services.  There is a win-win-win to be had when it comes to speed, cost, and quality if it’s carefully thought through, allowing your business to both manage investment costs and capitalize on new revenue opportunities quickly!

This article has been reposted on LinkedIn.