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How Will the Omnichannel Change Retail?

Curt Bimschleger, senior vice president of retail logistics with Genco, offers some observations on how the omnichannel is transforming the retail sector.

The biggest obstacle that retailers face in moving toward an omnichannel strategy is “being able to see where all the inventory is,” says Bimschleger. Despite highly sophisticated information-technology systems and supposedly tight partnerships with suppliers, many retailers still lack that capability. Such knowledge becomes even more essential as customers ordering over the internet come to expect two-day service as the norm for home delivery.

In addition, companies are still working out how to service multiple channels, which often have quite different requirements for order size and frequency. Some retailers have tried to address the challenge through separate fulfillment distribution centers, but many more are attempting to bring all types of inventory under one roof, as a means of controlling costs.

The important thing, says Bimschleger, is to attain the visibility to see inventory no matter where it resides, and to ensure “a seamless customer experience.”

The trend in fulfillment today is to bring stocking locations closer to the customer. Often that takes the form of new regional distribution centers, such as those being built all over the country by Amazon.com. But it also entails the fulfillment of orders directly from local stores, a strategy that gives brick-and-mortar retailers an advantage over internet-only sellers.

The smartphone is also having a deep impact on retailing in the omnichannel age. “Statistics show that 85 percent of people have one within five feet of them 95 percent of the time,” says Bimschleger. “You can interact with your retailer of choice anytime, anywhere. The supply chain is really being impacted by having product that much closer to the consumer.”

Visibility is also a key issue in the management of returns, which are an inevitable byproduct of internet ordering. Leading retailers know how to translate returns “back into cash” quickly, Bimschleger says.

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