Digital culture is changing the way retailers need to operate.

Customers want to browse and shop seamlessly, accessing the same range and offers in the physical and digital worlds. Traditional high street retailers are extending sales into third party platforms at a pace too, and selling/commercial models are becoming increasingly complex.

Simply put, customers expect to be able to buy anything from anywhere at any time and have it shipped anywhere they want.

Amazon in particular has driven rapid delivery speed, stock visibility, and low customer time investment.

For a while, many thought digitalisation wouldn’t be as relevant for fashion or fresh food, but they underestimated customers.  Now, most retailers need to offer digital sales support, home delivery, click and collect and new distribution models to compete.


Blueprint for “The Store of the Future”

When thinking about ‘store of the future’ pioneers, Apple has led the pack.  The tech giant set itself apart not only by creating sought-after gadgets but also as masters of the digital customer experience. Tablets, wireless POS, click and collect, staff radio communication, and customer wifi are commonplace now, but Apple were first to be recognised on a global scale.

The DIY sector knows computers are better at remembering where things are than humans. A hardware store in San Jose, California has employed robot sales assistants, the OSHbots, to help customers find what they’re looking for.

‘Find it for me’ tools aren’t limited to DIY, Ted Baker launched a virtual version of their ‘& Moore’ East London store that allows customers to click on items to be guided to the products.

Digital technology is engaging fashion customers too, for example – with interactive digital mirrors and wall-mounted screens that access the web to allow browsing and purchasing.

Ultimately, the retail sector needs to marry the physical and digital worlds whilst remembering that solutions shouldn’t solely focus on transactions.

A recent trip to purchase computers spurred one example of the challenge. The salesman was excellent but the laptops I chose weren’t in stock so I returned home and ordered three online. It is there that opportunities were missed.  I could have bought the same laptop from another retailer online and the salesman missed the opportunity to earn a bonus as I couldn’t attribute the online sale to him.

Demand and supply is the big challenge

Web shopping/ecommerce solutions are mature, e.g. Hybris, ATG, Websphere, Magento, and Venda are used widely. For wholesale and B2B, web-based virtual showrooms like NuOrder and Pop Market are springing up at a pace.  Setting up shop online is easy these days.  The hard work and real rewards lie in cracking the stock management challenge.

Two problems stand in the way:

1) the extra cost of distribution in home shopping.  As e-commerce grows, retailers’ distribution costs are increasing; for home shopping, they have to provide the vehicle, driver, and fuel;

2) meeting the stock demands of the consumer. Planning what stock to have where is a big challenge because customers expect all products to be everywhere.

Order management solutions can be implemented to help tackle these problems: Manhattan and IBM offer centralised stock management, order fulfilment and customer transactions across customer and distribution channels.  Their solutions aim to help retailers manage increasingly complex supply chains.  They give retailers flexibility to support new channels that emerge. They have been designed to route “orders” to the best ‘stock pot’ (an “order” can be a plan, a web customer order, a wholesale order, a store replenishment order, click and collect, etc).  They can plan transport, reserve stock and anticipate intake.  Visibility into network-wide inventory supports the re-planning process when exceptions or disruptions occur during the execution cycle.

When planning to implement systems like these, there are important factors to bear in mind.

First, inventory records need to be accurate.  This could require process improvement or even RFID.

Second, approach the project with a “lean” perspective. Projects can no longer be considered ‘finished’ in the traditional sense; the conditions for success must be adjusted as the process evolves. Build in continuous improvement: implement, learn and adjust.

Third, choose partners wisely. Large providers offer mature tools but can be inflexible. Smaller companies employ a personal, customisable approach.

Fourth, remember that success will come from having a malleable, efficient supply chain strategy that is ‘demand-driven’ i.e. the supply chain is pulled by what customers are buying and where they’re buying it from.

Finally, be aware that systems can only go so far, maximum efficiency comes from having the right stock in the right place so, identify the information needed to manage the supply chain and view the data that systems provide as an asset of equal value to the system itself.

Retailers are beginning to tackle the seamless journey between the web and the store, and the management of stock across those journeys, but there is a long way to go before the cross-channel customer experience is fully established.

It’s a good time to invest to stay ahead.

Read More:

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