Are You Ready for Omnichannel Retail?

Tags: Retail, Logistics, Supply Chain

Paul A. Myerson is Professor of Practice in Supply Chain Management at Lehigh University and author of books on Lean for McGraw-Hill, and supply chain for Pearson, 610-758-1576

An omnichannel retail strategy provides a consistent shopping experience across different channels and devices, requiring your supply chain to offer a smooth, positive experience for customers—no matter where and how they interact with your brand.

Some supply chain challenges to address when dealing with an omnichannel retail strategy include:

Supply chain visibility. Consumer expectations are increasing, and supply chains are extending. You need timely and accurate inventory information for all parts of the supply chain, whether physically integrated or separate—for example, distribution centers to support stores and fulfillment centers for e-commerce.

Use technologies such as RFID, barcodes, the Internet of Things, blockchain, and the cloud to track inventory in the warehouse, the store, or in transit.

Network design. Design the network appropriately for rapid delivery, free or low-cost shipping, and free returns, and determine optimal inventory placement.

Consider segmenting the supply chain to achieve optimal stocking and delivery performance, while maintaining low operation cost, by grouping products with shared stocking, delivery, and fulfillment needs. This may require different supply chain strategies; for example, should you integrate distribution and fulfillment center processes at some echelons of the distribution network and separate at others?

Order fulfillment. Omnichannel retail creates a range of customer touch points—stores, outlets, e-commerce sites, catalogs, and seasonal pop-up locations. This means the supply chain also gains additional responsibilities similar to sales associates and merchandising managers.

Then there is the increased demand—and added complexity—for ship-to-store and ship-from-store delivery, turning retail locations into mini-fulfillment centers requiring picking, packing, and possibly delivery capabilities.

Pricing. Determine if pricing will be channel specific, a single omnichannel price, or some combination as many consumers use smartphones in the store to compare prices—and use online coupons—before purchasing. The price can help determine if consumers want items delivered to their homes or if they want to pick them up at the nearest store.

Customer service. Omnichannel retail expands the customer experience beyond the store. Many stores contact customers through social media, live chat, or text messaging, so employees need to be trained correctly when they are contacted through any channel.

Consider using CRM systems to keep detailed customer profiles and document interactions, so anyone who deals with that customer will already have their information, which helps reduce customer frustration.

Reverse logistics. A convenient returns policy and process is essential to the customer experience, so make returns convenient through in-store, prepaid mail, and drop point channels.

Develop a strategy that includes omnichannel return options, where all designated return locations have the proper tools and information to determine quick and accurate product disposition.

An omnichannel retail strategy presents many other challenges and supply chain professionals must rise to the occasion. Be part of the solution rather than part of the problem.