Retail & Distribution

Retail Everywhere Requires a Flexible Approach to Fulfillment

13 June 2019

3 min
The term “retail” is no longer synonymous with “store.” Retail now must happen wherever customers want it: online, on social media, on mobile, in a store. The pressure is on to satisfy customers’ expectations and provide the items they want in the places they want them without friction or delay. Otherwise, you’ll lose out to the competition. This evolution requires retailers to think differently about where they stock inventory, how they optimize fulfillment according to where the customer wants to receive an item, and how they find ways to respond quickly if the two don’t line up. According to BRP, 92% of consumers call product availability very important to their customer experience, while just 45% of retailers view their execution in this area as excellent. The challenge? Retailers must achieve all this while maintaining profitability.

Building an Omnichannel Order Management Foundation

Analysts are in broad agreement that retailers must put several basic building blocks in place to pull this off. On the front end, they need to provide an array of new customer-facing solutions and omnichannel service options. On the back end, they must implement the required infrastructure to forecast, manage and fulfill these expectations, and then put inventory and assortments in the places that make for the most speedy and efficient fulfillment processes.

By shoring up both front-end and back-end processes, retailers can move customers along from the initial spark of interest to purchase and never miss a sale. This involves assuring customers them that the item in question is in stock and is available to be delivered into their possession according to their specifications. Newer service offerings, such as click-and-collect, require enabling access to real-time store inventory to ensure a product will be there when the customer arrives.

Other selling tools have similar requirements. If an item is not in stock, endless aisle can do the job of saving the sale, but only if the application can offer delivery windows based on access to accurate real-time inventory. Store associates wielding tablets for clienteling must also be able to provide this information. A kiosk taking special orders must do the same.

On the other end of transactions, retailers must be prepared to take back returned inventory — such as receiving online purchases in stores, even if the store does not carry that item — and efficiently route them where they need to go (most often for web orders)

Flexible Omnichannel Fulfillment

In addition to working its magic on the front end, a single, real-time view of inventory across the board is a must-have element of flexible fulfillment. To determine how much inventory to order and where to place it, retailers must forecast where demand will come from. They also need to optimize fulfillment to ensure they are fulfilling orders quickly, efficiently and profitably. Retailers are leveraging multiple new inventory locations and delivery strategies to make all this happen.

Stores are becoming fulfillment locations for click-and-collect, curbside pickup, deliver-from-store and ship-from-store. Some low-performing stores are becoming dark stores, serving only as local delivery hubs and click-and-collect locations. Larger stores are becoming inventory hubs for smaller “spoke” stores. According to NRF research, 42% of retailers surveyed say that faster delivery of online orders is their top customer-facing priority, and many plan to use stores to achieve that goal.

Retailers are also leveraging a broadening array of last-mile options to connect local customers with orders, including local delivery services (Walmart has seven),using associates to make deliveries, as well as in-store or neighborhood lockers. Retailers also are striking deals with partners such as Amazon and Kohl’s.

Making It Work

All those capabilities depend upon a robust, unified order management platform. Must-haves include:

  • A single, real-time view of accurate inventory availability
  • Robust distributed order management, so any order is visible and fulfillable by any channel
  • A flexible approach to fulfillment, with the ability to optimize fulfillment locations
  • Omnichannel-aware supply chain forecasting, to correctly position inventory according to demand

According to Forrester, “inventory management and fulfillment agility will become make-or-break capabilities for all retailers.” To satisfy today’s need-it-now consumer, retailers must adopt the right array of selling tools, fulfillment capabilities and omnichannel systems to deliver the ideal retail experience, anywhere.

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