The omnichannel retail marketplace is driven by discontinuous consumer demand across all channels and with this brings difficulties in managing the demand in an individual channel. This affects the inventory demand management and as a result the inventory placement across channels because of the changes in demand across channels. These demands require the retailer to modify their forecasts and inventory management to support this discontinuous change model across channels. The old adage in this model is true, ‘the only thing constant is change’ and retailers must implement methods to support this change model. Just as with forecast planning, demand management must change in order to adjust to the changing demand of the omnichannel market.
The omnichannel market is only going to expand from consumer cross channel shopping and purchasing and this will only increase the pressure on demand management and forecasting. Demand management procedures must change just as the forecasting side of the equation must change to review and replan in shorter cycles in order to adjust as necessary as a result of the discontinuous consumer demand by channels. Omnichannel retailers must be prepared and plan to adjust and move inventory across locations based on consumer demand cycles across locations and channels. The forecasting and demand changes are resulting in the need to reevaluate the inventory management practices in order to support the changes driven by the omnichannel marketplace.
These changes in consumer demand radiate throughout the marketplace to disrupt retail practices. This cycle of discontinuous change will only continue and in fact speed up as consumers continue to mash new capabilities to meet their changing lifestyles. These changing demands require that retailers implement procedures to increase collaboration and flexibility in order to be able to support the level and velocity of change. This means dramatic changes to the retailers procedures and methods of demand management and sales tracking. This requires that retailers flatten their demand management, forecast planning and sales delivery in order to meet these demands. These requirements will drive cultural changes for retailers as well because it requires elimination of silos in their forecasting, demand and inventory management.
Consumers are flattening their shopping and purchasing to eliminate the silos between retail channels and retailers must follow suit in order to meet the consumer demands. This means that omnichannel retailers must support purchasing practices that demand omnichannel delivery to the consumer from every channel. This means that omnichannel retailers must support stringent delivery service levels to a consumer selected address across all channels. Large omnichannel retailers must improve their delivery service level to meet the same service levels as Amazon in order to survive. Wal Mart has recognized this and has been changing practices, procedures and even their culture to meet these changing demands. Other large omnichannel retailers must follow in order to survive.
And now for the audience participation portion of the show…
ECommerce will have wide ranging impacts on both the retail and manufacturing sectors. How can you focus these abilities to improve the consumer's experience? Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes. In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas. How can you support these continuously changing requirements?