Omni channel shopping, purchasing and delivery process improvements will also simplify the omni channel inventory management requirements by standardizing the business processes. Retailers must standardize these business processes in order to support the discontinuous changes form the consumer incorporation of technology and social networking capabilities. All of these changes can be overwhelming if the retailer has not standardized there business processes to support the demands. This standardization will also dramatically simplify the inventory management requirements resulting in a higher instock position and reduces out of stock and overstocks conditions. This will dramatically improve the retailers capabilities to support the changing consumer demands and also improve their margins.
I understand that all of this sounds too good to be true and all of these benefits cannot be achieved without some kind of catch. The catch here is that retailers must change their brick and mortar store strategy from an almost pure retail outlet to a distribution center that includes a retail outlet. This is the first step to an omni channel inventory management strategy that will support the fluid nature of omni channel shopping, sales and purchasing. This requires an initiative to review and redefine the retail business process to support the omni channel consumer demands. This can be difficult to move outside of the comfort zone of accepted retail practices that have been ingrained in the culture over a long period of time. The challenge must be overcome though in order to achieve and sustain success in the marketplace.
I understand that this is at odds with generally accepted best practices however this also provides a cost effective method to address the challenge of the marketplace. This initiative needs to start with the objective to define an inventory management strategy that can support the purchase demands of consumers in an omni channel marketplace. It is important to start with an objective that provides a robust and stable foundation to meet current demands and provides the flexibility to support changes. A focus on inventory management provides this stable and robust foundation. In addition, inventory management is the root of the challenge for retailers and the key challenge to the success of their omni channel strategy.
Retailers must realize that they must change their foundation to meet the current and future demands of the consumers. We are at a point now where the retail marketplace is in the midst of a major disruption that is caused by changes in consumer practices. Retailers cannot gloss over the basic demands with superficial acts such as order online and pick up in the store capabilities, they must reinvent their shopping and purchasing support to align with changing consumer demands. The focus of retailers must be redefining the shopping and purchasing experience and not real estate, this is the only way to succeed in the future.
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?