OMNI-CHANNEL SUPPLY CHAIN - The Game Changer?

WHAT'S ALL THE HOOPLA AROUND OMNI-CHANNEL?

There are a lot of talks happening around Omni-Channel initiatives in supply chain industry among solution providers, the retailers, and not to forget the trade publications. 

So it's important, as well as imperative, to cut through the hype and get down to its essence: A customer wants a product, and the path to that product must be short, readily available and consistently support the brand promise. Channels are merely vehicles on that path.

technology-enabled shopping options

The expansion of both brick-and-mortar and virtual retail channels creates a wide range of customer touch points — stores, outlet locations, e-commerce sites, social media commerce, catalogs and possibly seasonal or short-term locations such as pop-up stores. And no matter where the customer makes her purchase, she expects fast, hassle-free, flawless fulfillment.

Now, let's focus on the details.

WHAT CUSTOMERS WANT

With advancing technology in the retail sector, consumers increasingly expect to get personalized, relevant and seamless shopping experiences.

Online shopping can sometimes be frustrating to customers. Users tend to give up on the online shopping scene if the web functionality and performance are not up to the mark, if there are not many products to choose from, or if the customer service is too poor.

Customers have different reasons to prefer in-store or online shopping experience. The reason why online/mobile shopping has gained prominence is the following five factors – Convenience, Variety, Price, Comparisons and Fun.

WHAT RETAILERS WANT

Retailers nowadays have to be at the customer’s service 24x7 right from offering the right product at the best price to exceeding their expectations at handling an order.

When it comes to e-commerce, it’s not only about presenting and selling products online. Retailers are focusing on providing a rich, relevant and personalized shopping experience across multiple business channels.

Omni-Channel commerce is gaining prominence among retailers, as it provides consumers with a quality and personalized shopping experience online and in-store while building a trusted bond with the retailer and aiding the retailer to grow the business.

Different retailers will have different needs when considering an Omni-Channel commerce platform, depending on their business model and the size of their business.

OMNI-CHANNEL SUPPLY CHAIN MANAGEMENT

One result of omni-channel retailing is that the supply chain has become more complex, due largely to the growing need for the efficient handling of cross-channel inventory location and allocation.

The most common causes of customer dissatisfaction in stores centered on product unavailability: out-of-stocks, empty shelves, lack of correct sizes or colors or simply being unable to find what they came in to purchase. 

Forward-looking retailers are planning and upgrading their entire omni-channel supply chains to avoid these kinds of issues by building in a number of critical management capabilities. And, for most, the driving force is providing visibility, accuracy, control, flexibility, and efficiency.

VISIBILITY

To meet customer expectations, you’ve got to be able to see what you have and know exactly where it’s located across all supply chain channels. In managing the omni-channel supply chain, end-to-end cross-inventory visibility is vital.

ACCURACY

The benefits of supply chain visibility are reliant on the accuracy of the available inventory information. Supply chain systems capable of providing accurate, supply-chain-wide inventory data and visibility are crucial in omni-channel retail environments.

CONTROL

Today’s connected consumers not only want to be able to buy when and where they wish, they also want to have their order fulfilled to their exact specifications. To efficiently deliver consistent experiences to customers who shop via one or more channels, retailers need real-time access to — and dynamic control over — their entire inventory. Being able to control total inventory access, availability and allocation is key to the ability to deliver merchandise to the right place at the right time and keep omni-channel customers satisfied.

FLEXIBILITY

Today’s retailers can no longer afford to have rigid supply chains. Having multiple sales channels requires the supply chain to respond to, accommodate and anticipate a great many external and internal inventory needs. In an omni-channel environment focused on meeting customers’ requirements, flexibility is mission critical.

EFFICIENCY

In a multiple channel retail environment, maximizing efficiency in every part of the supply chain — in-store, at the warehouse, in transit — is necessary for meeting customer expectations, for ensuring that inventory is capable of serving multiple channels, and last but not least, for controlling costs. 

VERDICT

Retail is all about the customer experience. Omni-channel retail hasn’t changed that, but it has expanded on it.

For retailers going beyond brick-and-mortar into the virtual world, it’s no longer just about the in-store experience. It’s about an end-to-end experience that begins whenever and wherever the customer orders: in the store, on a smartphone, on the store’s e-commerce site. The final — and maybe the most important — part of the experience is flawless fulfillment.