Executive Briefings

Do Bonuses, Other Incentives Conflict with 'Agnosticism' of Merged-Channel Retailing?

As merged channels (also known as omnichannel) become the default for an increasing number of retailers, the challenge of efficiently handling the supply chain and managing inventory becomes exponentially more complex.

The goal in a merged environment is channel agnosticism, in that the chain's management shouldn't care whether a customer starts a transaction in mobile and completes it in-store or starts it with the call center and tenders the transaction online or if the research, purchase, payment and pickup are each handled with a different channel.

Store management should care as much about whether a transaction started in mobile or in-store as for whether an in-store entered the store through the South entrance or the West entrance. True merged channel thinking would say, "What do I care how they came into my store as long as they came in?"

Alas, today's retail reality is overflowing with conflicting incentives and bonus/commission plans that make retail executives care very much about how a shopper comes to them. Much of this happens to the detriment of the sale, as shoppers are forced from one channel to the next, with no regard to making the shopping experience as easy and quick as possible for the shopper.

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Keywords: logistics services, logistics management, 3PL, third-party logistics, logistics & supply chain, supply chain management, retail supply chain

The goal in a merged environment is channel agnosticism, in that the chain's management shouldn't care whether a customer starts a transaction in mobile and completes it in-store or starts it with the call center and tenders the transaction online or if the research, purchase, payment and pickup are each handled with a different channel.

Store management should care as much about whether a transaction started in mobile or in-store as for whether an in-store entered the store through the South entrance or the West entrance. True merged channel thinking would say, "What do I care how they came into my store as long as they came in?"

Alas, today's retail reality is overflowing with conflicting incentives and bonus/commission plans that make retail executives care very much about how a shopper comes to them. Much of this happens to the detriment of the sale, as shoppers are forced from one channel to the next, with no regard to making the shopping experience as easy and quick as possible for the shopper.

Read Full Article


Keywords: logistics services, logistics management, 3PL, third-party logistics, logistics & supply chain, supply chain management, retail supply chain