The developments happening in retail are coming thick and fast, with the fashion sector a prime example. A transformation is happening within the supply chain, moving from multi-channel, via cross-channel, to omni-channel. It’s a major challenge for many retailers to continue developing their customer focus while ensuring a standardized brand experience across all possible sales channels. Is your wholesale business ready for these changes, and, furthermore, how do you ensure you protect the greatest possible margin?
Omni-channel means, in the simplest terms, that consumers experience a standardized brand experience across every sales channel open to them (think high street store, webshop, mobile platform or Facebook shop), based on one source of information and one clear, transparent pricing structure. As a consequence, it’s no longer important where inventory is stored, or where the customer places his or her order. It’s a major shift, but what exactly does it mean for wholesalers? How can they ensure their businesses get the most out of these innovative new approaches to meeting customer demand?
Chances for retailers
The success of omni-channel lives and dies with the management of inventory information in one transparent system. The store and warehouse stock information must be integrated in real-time and available any-time, any-place for everyone involved. Is a product not physically available in the shop, or at least not in the required colour or size? With the right information available, this no longer has to be a major problem.
The customer, via own mobile device or store-based interface, can easily and quickly place and pay for an order based on availability elsewhere in the supply network. The customer effectively has a choice from everything available in every store in the chain, at central distribution centers, or indeed directly from a supplier who also makes their data available. Having the overview of all possibilities to meet demand makes it possible for the retailer to manage ‘virtual’ stock. The assortment available can be easily expanded with a range of items that are not usually available in the shop.
Given the above, the omni-channel developments offer a wide range of opportunities for retailers and wholesalers alike: having to sell fewer ‘no’s in the store or online, a bigger, wider (virtual) assortment, less obsolete stock, a smaller overall stock with less working capital tied up in it, and, perhaps most importantly, more satisfied customers who keep coming back.
Your margin-killers under control
It’s clear that effective inventory management and logistic processes are crucial if businesses are to benefit from these developments. However, you also need to ensure you protect an optimal margin. What are the key influencers here?
Protecting a profit makes it essential that all wholesale businesses get their ‘margin killers’ well under control:
• Stop delivering late
Focus on avoiding the scenario where desired products are not in stock and you deliver late, and on ensuring that your transport partners are also ready to deliver on your promises.
• Stop incomplete dispatches
Focus on ensuring your customers can find what they need in your assortment, and that you don’t have to send incomplete orders that will need subsequent attention.
• Stop making mistakes
Avoid errors during the collection and delivery of orders, avoid the return of products and the need to issue credit notes, avoid incorrect price calculations, and perhaps most striking, ensure you send an accurate invoice for each order.
• Stop unnecessary contact
Avoid – where ever possible – unnecessary contact with customers concerning their orders (while still ensuring that any unsatisfied customers are well taken care of).
Just as with the new multi-channel scenario, managing these issues effectively requires help from the right business software – a central source of real time information on inventory, logistic, sales and other business process information. The right IT will ultimately help you realise more ‘perfect orders’, fewer costs through fewer mistakes, more satisfied customers, and in turn, a better margin.