Other Voices: Tools for Cross-Channel Retailing

Editor’s Note: The following column by Scott Fenwick, senior director of product strategy for Manhattan Associates, is part of Modern’s new Other Voices column. The series, published on Wednesdays, will feature ideas, opinions and insights from end users, analysts, systems integraters and OEMs. Click on the link to learn about submitting a column for consideration.

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With consumers’ growing expectations to shop the way they want, traditional brick-and-mortar retailers have overcome their fear of ecommerce cannibalization of store sales, adopting dotcom storefronts and strategies to help ensure a consistent experience across all channels—and ultimately increase sales.

However, with these new cross-channel opportunities come new challenges, and perhaps going somewhat unnoticed and unattended is the impact to store operations. Perhaps the most common cross-channel activity among consumers today involves completing research online prior to making a purchase in the store, but a number of other permutations have materialized to keep customers happy—and sales on the books:

• Buy online/pick up in store;
• Buy anywhere/ship from store to home;
• Buy online/transfer to store for pick up;
• Research online/reserve in store;
• Buy online/return to store; and
• Endless aisle buy in store/ship to store or home

But new channels, along with new services, bring new challenges. Retailers need new and improved store systems and processes in place to address this business problem.

To transform a store from simply being an end-point in the supply chain and a gateway for the in-store shopper into a fully functional “node” in the supply chain, the following technology capabilities must exist:

• Inventory Management: Tightly managing the flow of merchandise into the retail store is the first step in improving inventory accuracy, which is the life-blood of any cross-channel retail enablement initiative. Retailers should look for solutions that offer the ability to receive goods into the store electronically and perform and audit quality inspections. For retailers that receive shipments directly from external vendors, they should also look for the flexibility to print store specific price tickets at the point of receipt.

• Order Fulfillment: Both cross-channel and endless-aisle initiatives involve better leveraging inventory assets residing at the store to fulfill customer orders. This approach ensures sales opportunities are not lost and takes advantage of the most cost-effective fulfillment strategy. Retailers should look for the ability to negotiate and accept orders being fulfilled from their store locations as well as direct store associates to pull merchandise from the retail shelves efficiently and either pack and ship, or hold, depending on the customer-delivery model.

For goods being shipped to other store locations for pick-up or direct to the consumer’s home, retailers will require the ability to leverage common parcel carriers dynamically to perform rate shopping, generate shipping labels and documentation, track the shipments, and possibly capture electronic signatures for proof of delivery.

• Supply Chain Visibility: To facilitate most of the business processes covered in this paper, store managers need visibility well beyond their own front door. Retailers should look for solutions which give them instant access to information pertaining to inbound shipments (from any point in the supply chain), outbound shipments (to any point in the supply chain), current order status, as well as inventory (both on-hand and intransit goods). This information should be rendered in easy-to-use and flexible formats, which are purpose built for the in-store operator.

• Business Analytics: Finally, once the store is operating as a fully functional distribution point, it is critical to gather key performance measures from each store to monitor efficiency and effectiveness over time. Retailers should look for solutions that automate the collection of these execution-centric metrics and consolidate those across all distribution channels.

Fortunately, with advancements in network connectivity and web design technologies, retailers now have much more cost-effective options for deploying robust and easy-to-use supply chain capabilities across their hundreds and thousands of retail store locations. By leveraging web-based deployment methodologies, retail execution capabilities can now be deployed centrally
at the corporate IT location and be fully leveraged by store associates located anywhere in the world.