Jim Barnes, president and chief executive officer of enVista Corp., discusses how retailers and distributors are addressing the unique challenges posed by the emergence of the omnichannel.
Most retailers and e-tailers understand how to handle the physical execution of orders within a single or multichannel environment, says Barnes. The trick lies in achieving equal visibility across all channels and, in the process, “creating one brand loyalty. It’s about becoming intimate with the customer regardless of where, when and from whom the shopper buys.”
Technology is a major component of a successful omnichannel strategy. Existing software platforms, especially enterprise resource planning systems, are struggling to adapt. Many legacy ERP platforms are based on financial “siloes,” says Barnes. They need to be able to handle the needs of the modern-day customer, who might be ordering from any number of channels. At the same time, companies need to adjust their business processes to reflect the new ways of reaching the consumer.
The ultimate “utopia,” says Barnes, is “one inventory source across all channels.” Unfortunately, many retailers continue to keep inventory segmented in order to protect individual channels.
In theory, companies can operate one distribution center that serves orders originating from all channels. But they have to understand the differing service requirements that come from each one. On the brick-and-mortar side, retailers can get away with being less than perfect. But a mistake in an internet order can result in lost customer loyalty.
To synchronize the channels, start with developing financial plans that range across them, Barnes advises. Secondly, use technology to achieve one view of inventory – “one version of the truth, so that you can make cross-channel allocation rules.”
Few companies have achieved that goal so far. “Even the big boys are still struggling with how they execute,” says Barnes.