It seems that the initial wave of multi channel retail practice made the process more complicated in many ways causing a great deal of conflict between channels especially from an inventory and sales management perspective. It also seems that the current consumer demands to support what I refer to as a true omni channel experience bring with them the opportunity to simplify and streamline the inventory and sales management perspectives. These omni channel demands and expectations require that retailers redesign their operations and transform the retail store into another distribution hub with a retail channel outlet in order to meet the demands in a cost effective manner that meets both customer demands and most importantly for the retailer supports a forward looking strategy to overcome the current retail store challenges and loses.
This is not an easy strategy and first requires that retailers re-evaluate their sales and forecasting models to take into account this new omni channel reality. In this new reality the sale, and the forecast, should not be segregated to the purchase channel, instead they should be consolidated into a sale from a district or distribution hub, formerly known as a store. This will allow the retailer to more accurately forecast deliveries by region and store in order to support more a multi-echelon inventory planning and forecasting strategy that supports more efficient inventory consumption. This strategy will help to reduce overstock and will also allow retailers to redirect inventory across the entire network chain to more efficiently address inventory shortages and overstock.
This new sales and forecasting model should simplify the process and also improve the accuracy. This does though fly at odds with legacy concepts and practices and will require a complete paradigm shift to implement. This revision to the sales and forecasting model is the next logical step to the realization of the omni channel retail model to provide the ability to quickly adjust to changing consumer demands from a purchase and delivery perspective. This does require adjustments to strategy and most importantly adjustments to staffing strategy and placement. While this would require an increase in staffing in each of the existing store outlets it also provides a cost savings in parcel delivery. This is because the majority of shipments to consumers would be able to utilize zone one shipping rates which reduces the transportation costs.
These times are challenging for retailers because of the rate of change demanded by the consumer and this requires the retailers to re-evaluate their fulfillment methods to support a true omni channel retail environment. The rate of change in the market increases the urgency to accept and implement changes to support the demands. This also requires an increase in standardization to increase the flexibility. All of these demands point towards a need to revamp the sales and forecast strategy to allow retailers to flatten the hierarchy to meet the demands in a creative manner that stops losses and increases efficiencies and reduces costs.
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?