Pop quiz: A customer in Atlanta orders a tie from a retailer’s e-commerce site. One tie is located in a distribution center (DC) on the outskirts of town. Three more are located in the flagship store in New York. Which tie should get picked to fulfill that order?
In today’s world of retail, the simplest answer—choosing the closest tie—may not always be the best one.
“Major retailers are trying to look at one inventory, one engine, one workplace,” said Art Eldred, client executive, system sales for Vargo Integrated Systems. “Previously, omni-channel has been outside the four walls of a DC, or they’ve built dedicated channels. Because the e-commerce market continues to grow—and the mobile marketplace at a much faster pace—it requires different avenues with an end goal of getting the highest-margin products out the door in the fastest time. If you have a stockpile of that item in New York, that last tie may get discounted, which affects margins.”
Retail has moved past operating siloed business lines—like brick-and-mortar stores, e-commerce and wholesale—in a seamless inventory between all of the sales operations. In many ways, multi-channel has given way to omni-channel: getting the product to the customer as quickly as possible, no matter where it was ordered. That size or color is not in stock at the store? No problem: a store associate can order from a store kiosk and have the product sent directly to a customer’s home. A customer needs that product right away? It can be picked up at the store, either from the store’s inventory or shipped there. Or, the product may be picked from the store itself and shipped to the customer who handles the entire transaction from home.
By Sandy Smith