It is already difficult enough for many retail chains to set up a well-functioning omnichain. The next challenge is to make it profitable.
Retailer chains are all aware of the importance of an omnichain. Nevertheless, research by RSR Research from 2015 shows that only a limited group has a good link between online and physical shopping. People try to create Brand awareness online and that is not what omnichanneling aims at. One of the main pain points is the level of fullfillment and ensuring the right customer experience.
The fullfillment often stumbles over the lack of transparency throughout the entire chain. Especially the link with PoS is flawed. Sales departments often still have insight, but when it comes to the present warehouses and Sourcing, every link is missing. The chain’s response is then by definition inadequate.
Customer experience has suffered from the economic crisis in recent years. In particular, retailers are attempting to adjust labor costs in the shops as much as possible. While the Customer Experience requires additional services in the store that guide the customer in his purchasing process and are able to determine what the customer is looking for but ultimately do not buy or find.
Stock visibility throughout the chain at any time is an absolute precondition in a market where demand is changing faster and faster, but also the channel through which that stock must move. The organization should be able to send any product along any channel at any time.
The correct stock should also be as close as possible to the Point of Sales to enable the correct response time. That is extra difficult because the PoS is no longer just the store. Where do you store which stock and how do you monitor these developments along each channel? Both direct and the interaction between the channels.
Predictive analysis is the next step in optimizing your chain. What non-buy signals has the customer left behind. You can read this by clicking behavior on your website or via survey in your stores by your staff. You must collect this information for your Forecasting, Sales and Operational Planning.
The Cost to Serve has not been clearly mapped out for many organizations. Every time your inventory is hit or moved, you add costs. Using a general ‘covering’ margin is no longer sufficient because the omnichain channel exchange can add up your costs.
Labor costs are often clear, but there is little insight into yield / costs for non-transactional activities. Stock management and Customer experience activities are not actively managed. Also, limited attention is paid to task automation solutions. The transactional settlement often turns out to take a lot of time for the staff and is then kept away from customers that are still present. [think of self-scanning in supermarkets]
Return logistics, always a difficult point in supply chains, is insufficiently embedded in the daily processes of retailers. From reception in the store, pick up by trucks or online return. The strongly deviating electricity, which is often outsourced, is rarely well organized throughout the entire chain and thus consumes a lot of time and money in the chain.
The new reality is the constant change in the market and within omnichains. Which is caused by a customer who constantly searches for an experience and does not just buy a ‘product’. Organizations will only succeed if they organize their entire chain accordingly by ensuring transparency and flexibility. Simplifying your organization by arranging it flatter and horizontally, focused on your flows, will improve interaction, focusing on the different Points of Sales. And along these flows, the human interaction and the actions of your employees are essential.