One of the greatest challenges in the new retail marketplace is the inventory locations and availability to fill consumer demands across changes. This challenge requires improved forecasting and planning to address the inventory levels and in addition, and also extremely important is the strategic placement of inventory. This new retail marketplace requires the systematic tracking availability based on shared forecast and planning across channels because the changing marketplace does not differentiate between channels more and more. There is now an expanded requirement for the ability to ship from any channel to any channel based on destination and inventory availability.
This requirement to ship from any channel to any channel is a relatively straight forward systematic configuration improvement. However, the physical and logistical changes required to support these new requirements can be very complicated and require a great deal of effort to implement. This also requires a very high level of flexibility in the execution as well because the rate of change in the marketplace is only increasing. These changes must be reviewed and coordinated together and will require collaboration across external partners, internal business units and also external consumers. These changes cannot be fully defined and implemented with the intent to be complete because the changes to the marketplace are not slowing down.
Legacy retailers have a huge challenge in front of them to implement both cultural and operational changes to support the flattened customer delivery model. It will also and perhaps most importantly require cultural changes to support the operational requirements. In my opinion one of the key changes is the standardized shipping model that matches changing industry standards driven by Amazon and other online retailers. In order for these large legacy retailers to survive they must implement the changes that improves inventory accuracy and most importantly inventory location accuracy in order to support these operational improvements.
Strategically placed inventory is extremely important in this new marketplace because retailers only have one chance to complete the purchase. This means that planning and forecasting by region, including blending channels is becoming more and more important. Retailers must be flatten their operations in order to meet the purchasing demands and the legacy retailers must step up their operation to increase capabilities in the stores to be able to meet the purchasing and delivery demands. Retail stores make a good base for regional direct to consumer deliveries and this means that the store employees must be beefed up to be able to support these new demands.
Retailers have realized this but the changes will require time, effort and funding to implement. Most of them have finally realized this new marketplace reality and have begun this difficult change. The retailer extended supply chain and logistics will play a large part in this redefinition. This will put great pressure on the supply chain and the store operations and since this involves changes for people it must take into account training and staffing requirements.
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?