08/09/2015

By Craig Sears-Black, UK Managing Director, Manhattan Associates

You could be forgiven for thinking that bricks and mortar retailers are the underdogs in today’s omni-channel world. After all, they’re the ones burdened with all the overheads of running a physical network of stores and a set of disparate systems and processes built up over years of incremental change.

But having a real-world presence can make all the difference to the customer experience, because even in today’s online world, most people still prefer to deal with organisations face-to-face. It’s something that online retailers are starting to realise, with many trying to replicate this physical distribution network by delivering to local stores or installing lockers in popular public locations.

So in this latest retail shake-up, how can traditional retailers keep the edge? The simple answer is to work the store network harder. It means moving fulfilment responsibility away from distribution centres, bringing it to the high street, where stores are empowered to pick and pack orders, process returns, and see where everything is in the supply chain — and customers are empowered to buy, return, and ask for support from any channel.

The right formula for store distribution

The key is to create a single, easy-to-control stock pool that can fulfil orders across the business by providing retail, ecommerce and supply chain teams with instant visibility and real-time availability for all stock, regardless of where it’s held. The result is de-centralised distribution, more profitable fulfilment and margins, cross-channel orders and collections, supply-chain-wide visibility on returns and speedier delivery.

By managing the stock pool and stores in this way, retailers can gain three significant benefits.

1. Make the store work harder

Retailers can understand and choose the most profitable fulfilment point based on real-time insights, putting stores at the heart of the distribution network, and helping to deliver faster and more efficient fulfilment of stock that may be located on the shop floor. Online conversion increases by fulfilling from store inventory when a central distribution centre is out of stock. And overstocking is reduced and floor space freed up by fulfilling online orders from a store where stock is selling slowly.

2. Bring products and shoppers together

Even in today’s online world, customers still want to visit shops. Click and collect, in-store pickup and return, even for online orders, are all popular options. So retail associates must be able to meet all these customer demands in-store, faster and more effectively, and at a lower cost.

Creating and managing a single stock pool seamlessly enables in-store fulfilment, profitably. Orders are directed to the optimal store for fulfilment, taking into account proximity to the customer, capacity and cost to fulfil, and corporate inventory rules.

Order modifications and cancellations are updated in real-time, letting the retailer balance demand against existing, in-transit and expected inventory. And if the item isn’t right, customers can return it to a store, where it’s instantly visible and available inside the supply chain, ready to be sold and shipped elsewhere.

3. A distribution model fit for future

Future-proofing the supply chain in this way means shaping the retail business to deliver omni-channel nirvana today, with the built-in ability to adapt to changing industry demands.

Creating a single stock pool for the entire business provides this flexibility. And by treating stores as mini-distribution centres, a retailer can deliver true cross-channel shopping to the customer, letting them click, collect, and return on their terms, wherever their order originated.

Today’s forward-thinking retailer needs to not just overcome the challenges within the supply chain; they need to create a foundation to build on success for the future. With more and more online retailers jostling for space on the high street, the old ‘it’ll get there when it gets there’ mentality won’t cut it any more.

Creating a single stock pool with real-time availability across the business network gives retailers with physical stores a unique opportunity to create outstanding customer experiences, across the entire gamut of bricks and clicks, moving from a siloed, expensive supply chain to a unified omni-channel business where profits are protected.