Are your retail customers finding you less attractive lately? Consider your position on the seven signs shared below and you may decide your retail business needs an omni-channel makeover!
This is not just an idle suggestion we’re making as the omni-channel retail buzz is quickly becoming a roar and with good reason.
Not since the advent of price tags, cash registers and the ubiquitous apparel hanger has there been a retail industry innovation poised to create such major change.
Part of every hype cycle is always the massive amount of noise surrounding new trends and of course omni-channel has been no exception.
And always trying to cut through the hype and get to the core issues, this post highlights seven signs any retailer can look for in their business as indicators of the need for, and then target where to initiate omni-channel change.
Sign 1: Dual Inventory
Probably the simplest of these indicators is whether your organization maintains seperate and often duplicate inventories of product, one to support store distribution and another to fulfill e-commerce orders.
In addition to increasing overall inventory investment, keeping dual inventories can also lead to potential stock outs, delays and costs due to any needed transfers between these two inventories. This practice can often lead to higher markdowns/clearance costs should your unsold product become trapped in one channel when could have potentially been sold in another.
In addition, if you’re moving this inventory from one DC to another you’re also experiencing extra handling and transportation costs as well as increasing the potential for product damage.
Sign 2: Pricing Conflicts
As any remaining lines between online and offline shopping continue to disappear having different prices for the same items being sold online or in store will cause nothing but confusion.
Here’s a recent abomni-channel experience I had with a retailer whose pricing conflicts created much frustration and ultimately resulted in loss of significant profitability and me as a customer.
Sign 3: Payment Options
Flexibility in payment options and ability to pay across channels is key to omni-channel transparency and success. Supporting multiple payment types and maintaining consistency for both online and in-store payment methods will allow retailers to deliver a unified customer experience.
Here’s one personal experience with retailer who didn’t offer consistent and varied payment options in-store and online to give you a real world example of the potential confusion and frustration for consumers.
Sign 4: Assortment Variance
Another omni-channel watchout is not retailers who don’t carry the same items online as in-store. Such a situation is especially frustrating in apparel where someone will see a garment online and then go to the store to try on only to find the item is not carried in store.
Exception to this of course would be drop shipped items which are coming direct from vendors to consumer and oould never be stocked in store.
Critical in such cases is to ensure the customer does not have the expectation that such products are also available in store to prevent wasted trips and frustration.
Sign 5: Store Inventory
How much inventory do you keep on hand in stores? Do you have significant overstock up above merchandise display shelves or racks? And what about stockrooms, do you have them and if so how large? How much cost is associated with putting these products up there and taking them down? Putting into stockrooms and taking products out? Do you have a good handle on which stock is there and a locator system or ist it manually driven? How much theft, damage or obsolesence is caused through these in-store stock practices? What is the cost of staff, space inventory investment associated with extra on-hand inventory in your stores?
Sign 6: Push vs Pull
Other than opening orders when product is allocated to stores is it done on a push or a pull basis? And as noted above how much on-hand inventory is kept in the store if utilizing a push process? Potential with omni-channel is to harmonize your store and e-commerce logistics by moving to each picking, or inner pack/case level where makes sense.
When moving to an each picking approach and potentially supported by daily store replenishment, many items can be stocked in store with one to show and one to go significantly reducing the space required to display the same assortment in store.
Sign 7: Store Size
If someone asked you why are your stores the size they are, would you be able to accurately describe why? Do you wonder if there’s a way to reduce the footprint and still drive an even higher sales per square foot number? If the issues surrounding many of the above points are implemented in unison retailers will be able to reduce their store size, inventory investment and in so doing also improve their Internal Rate of Return on invested capital. For additional thoughts and ideas on this approach check out Sharing Kevin O’Leary’s Omni-channel Epiphany.
If you see a number of these seven signs in a quick review of your retail business, it may be time to pull together a tiger team to begin your omni-channel makeover.
For enhanced success make sure to include external components in this team as well as looking at success by other retailers already operating in this manner such as John Lewis and Office Max. Be sure to also tap logistics experts both internally and externally to ensure plans developed are feasible and can be supported either by internal distribution networks or utilizing experienced supply chain solution providers.
All of the aspects and signs highlighted here vary from company to company, situation to situation, and there are exceptions in every case. Remoteness of stores, value of products and frequency/cost of transportation delivery can all play a part in determining correct decision for your retail firm. Key to the success of the process is to first undertake a complete omni-channel logistics network strategy to help you quantify, measure, optimize and refine your plan before implementing.
Retailers committing to a makeover in order to get their omni-channel synergy right will be well positioned to Break the E-Commerce Sound Barrier with their target consumers and so remain ever alluring and attractive in her eyes.
Jeff Ashcroft
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