The Retail sector is currently undergoing a transformation the likes of which it has never previously experienced. This is being driven by two key factors. Firstly, globalisation; the rise of the middle classes and disposable income in BRICS nations and the corresponding demand for consumer and branded goods. Secondly, technological advances; with the spread of 4G mobile internet and smart phones consumers are shopping any time, in real time and the ways we are spending are varied and interwoven. The challenge for retailers is huge but no challenge seemingly is greater than that of the supply chain. Here Clyde Buntrock, Executive Director Business Development at ACS, looks at how retail organisations are responding to these changes with omni-channel strategies.
It is hardly surprising that a omni-channel approach to sales is moving to the top of the retail agenda, since it seeks to provide customers with a seamless shopping experience – whether online from a desktop or mobile device, by telephone, or in a retail store. According to research commissioned by Retail Week (2015), 67% of retail bosses say that mobile is their top omni-channel priority. This strategy is all about making sure the way companies and brands interact with their customers ‘all time-real time’ across all channels is the same; maintaining brand consistency and ensuring the customer experience excels on all levels.
Consumer behaviour, and specifically pre-purchasing behaviour is now being understood by retailers like never before because the customer journey can be readily captured online, something not always so easy with just a bricks and mortar store. Abandoned baskets, viewed products, hours of browsing, methods of purchase and delivery can now all be captured and connected to form a complete individual consumer profile. This information can be used to present products that consumers might like to purchase in the future. Following a user journey, alongside social media conversations, gathers vital customer intelligence. In the retail sector, and particularly in fashion, this is a great way of driving sales and reducing obsolete stock and mark downs.
Omni-Channel and the Single Stock View
An omni-channel approach really requires a single stock view – whereby a desired product must be available across all channels, and available for the consumer to purchase in the most convenient and relevant way for them. Few retailers have really managed this in entirety. How retailers fulfil against a seamless multi channel stock view is the real challenge. Obviously, the easiest method is to hold stock everywhere and close to the customer – but that’s simply not possible. So the challenge is to keep stock global AND local, whilst only having one stock pool that can fulfil demand from any channel. By its very nature, fashion retail, tends to have obsolete stock, so realising demand from one stock pool is very important to reduce obsolescence or mark downs. For logisticians, the challenge is to back this up with distribution networks that keep stock readily available, whilst at the same time maintaining a single stock pool across all platforms. Physical logistics is very often fixed. Planes, ships, trucks, even people can generally only move so quickly. Process efficiency in the total supply chain however is the real game changer. It is not the speed of logistics than enables a same day delivery, but the efficiency of the entire retail process.
Changing the game through disruption
No one can predict exactly how we’ll be shopping in 10 years’ time; retail is evolving at such an immense speed to cope with changing consumer behaviour and technology. Some retailers are proving to be game-changers and standard-setters. Amazon is a great example of a ‘disruptive’ company at the forefront of this, with innovations such as ‘one click’, same day, Sunday deliveries and product subscriptions. There has been much analysis about the varying strategies, but essentially it’s all about convenience and being in tune with the customer.
While most retailers will say they are adopting an omni-channel approach, the reality is they are all on very different tracks and at different stages in the race. A race for where no one quite knows where the finish line is. No one really knows what the end game is, and the constantly moving target is largely down to technological advancements that will change the future in ways that we don’t yet know.
Technology is the Enabler
Technology and ‘all time-real time’ online offerings drive a distinct consumer expectation. They demand instant access to: view and review products, select and deselect products, sample and purchase, as well as consuming and appreciating products in the manner and at the time of their choosing. Any business looking to implement an omni-channel strategy needs have a robust yet adaptable supply chain solution in place. The Allport Cargo Services technical solution supports an agile strategy to deliver an omni-channel solution.
In the virtual world, stock visibility and product selection are in the palm of the consumer’s hand. There are an ever-increasing number of purchase decision-making enablers: virtual fitting rooms, social feeds and product recommendations, the internet of things – seemingly anything is possible. The supply chain too is becoming ever more technology enabled. Seamless platforms offering design and development, fiscal management and global distribution mean that retail leaders are able to exert greater control and on-the-fly decision making across increasingly complex markets.
At ACS we really feel that we’re in tune with these fundamental changes taking place in our industry through our ‘Technology enabled Supply Chain’ approach. Our cloud-based technology manages the supply chain of global sourcing and global fulfilment for our clients in a rapid and agile way. It allows for a holistic view of supply chain information. We’ve developed our systems in-house, and refined them over the years to enable us to adapt to increasingly complex customer requirements. This means we can be highly intuitive to retailers’ dynamically changing businesses with configurable modular solutions. A ‘Cloud based, agile supply chain ‘spine’ for your business’. Concept to consumer process management and optimisation from supplier and factory set up through product sampling, ranging, global distribution,B2B & B2C fulfilment creating a virtual logistics enterprise. ACS retail customers will typically have 500 plus daily users on our systems across all business disciplines such as finance, logistics, buying, technical, GNFR, merchandising, design & Directorate. Adding in a typical 300 plus global supply base and the community of globally connected users within the one platform is considerable.
Omni-channel retailing, by its very nature, is customer driven, since it’s the customer that’s demanding the convenience. But it’s important to remember that a customer’s focus is less about channels and more about products: how they can get what they want, when they want it. Consumer technology – combined with leading-edge logistics technology – means that the real and virtual worlds become seamless. For organisations to succeed right now it’s vital to be information-driven. The future is very exciting for companies prepared to invest in prioritising online and omni-channel effectiveness, which at its heart is simply about improving the brand experience and convenience for the consumer.
Clyde Buntrock CMILT, London