Executive Briefings

Omnichannel Is Not Just for Retailers

Analyst Insight: Global, web, mobile, catalogs and trunk shows are only a few of the channels by which we sell and buy today. Retailers are investing billions of dollars to upgrade their tech infrastructure as well as their fulfillment processes to respond to customers as well as threatening and clever competitors’ moves. But omnichannel is not just for retailers. - Ann Grackin, CEO, ChainLink Research

Omnichannel Is Not Just for Retailers

The big money is on omnichannel now. But that varies from firm to firm since the existing portfolio and processes either made companies ready-or not-in specific areas. In addition, omni is not just for retailers, but is a well known and growing area for manufacturers. B2B customers want the same services consumers get, such as web self-service, overnight delivery, often free shipping, and so on. Wholesalers are also getting into the act by creating direct retailer web sites.

Key technology investments and process areas are:

Channel planning - This includes thinking through products and packaging by channel, inventory strategies, to pricing and customer integration technology. For B2B companies think about what will be the modifications in the relationships going forward to support ordering, demand planning, product nomenclature and catalogue standards, etc. Under omnichannel dynamics many of these are changing. For B2C companies that often means new web designs and new sales outlets.

Allocations - Here is an area that is changing quickly and software firms are responding. Rather than pushing all the merchandise to the stores, the new game is what to hold back in the DC or even at the supplier. This allows retailers to delay shipping inventory to the wrong location and to respond to where the customer may shop, assuring that inventory is in the best place to fulfill. Firms like Logility, JDA and Just Enough have upgraded their allocation software to support a more multi-node, multi-facility philosophy of inventory planning. This reduces transships, and better balances inventory to avoid stockout in one location vs. excess in another.

Inventory locating and visibility - Retailers are beginning to face up to the fact that in reality their inventory accuracy is not as good as they proclaim, with accuracy hovering between 70 percent to 80 percent. With omnichannel inventory locating has to be very precise for accurate available-to-promise and prompt delivery.

Intelligent fulfillment Firms are busy building new state of the art warehouse space and implementing distributed order management/warehouse software. They are thinking though what are the best pick-to-ship models and as pressure is on to provide at low cost and yet maintain on-time outbound schedules.

Home delivery - One of the hottest and least understood areas is the home delivery component. Moving beyond fixed schedule parcel shippers, firms are rethinking their private fleets, procuring regional carrier relationships and addressing the pressures for free, next-day and same-day delivery or providing unique services to the home.

Fears of the big e-commerce guys moving into locales market are real. But these firms also have to learn a lot of lessons about local conditions, market tastes and so on.

The battle lines are drawn between traditional business models vs. e-commerce, as well as new and interesting retail models and are surprising many with their innovations - and successes.

The Outlook

In 2016 enterprise will invest staggering levels for omnichannel, but firms need to focus on their specific requirements. From order management, fulfillment, allocations, RFID, e-commerce front end, as well as integrating with suppliers for available-to-promise, ship to store and drop ship, the technology and process budgets will flow into achieving the merger of channel data and providing a seamless customer experience.

The big money is on omnichannel now. But that varies from firm to firm since the existing portfolio and processes either made companies ready-or not-in specific areas. In addition, omni is not just for retailers, but is a well known and growing area for manufacturers. B2B customers want the same services consumers get, such as web self-service, overnight delivery, often free shipping, and so on. Wholesalers are also getting into the act by creating direct retailer web sites.

Key technology investments and process areas are:

Channel planning - This includes thinking through products and packaging by channel, inventory strategies, to pricing and customer integration technology. For B2B companies think about what will be the modifications in the relationships going forward to support ordering, demand planning, product nomenclature and catalogue standards, etc. Under omnichannel dynamics many of these are changing. For B2C companies that often means new web designs and new sales outlets.

Allocations - Here is an area that is changing quickly and software firms are responding. Rather than pushing all the merchandise to the stores, the new game is what to hold back in the DC or even at the supplier. This allows retailers to delay shipping inventory to the wrong location and to respond to where the customer may shop, assuring that inventory is in the best place to fulfill. Firms like Logility, JDA and Just Enough have upgraded their allocation software to support a more multi-node, multi-facility philosophy of inventory planning. This reduces transships, and better balances inventory to avoid stockout in one location vs. excess in another.

Inventory locating and visibility - Retailers are beginning to face up to the fact that in reality their inventory accuracy is not as good as they proclaim, with accuracy hovering between 70 percent to 80 percent. With omnichannel inventory locating has to be very precise for accurate available-to-promise and prompt delivery.

Intelligent fulfillment Firms are busy building new state of the art warehouse space and implementing distributed order management/warehouse software. They are thinking though what are the best pick-to-ship models and as pressure is on to provide at low cost and yet maintain on-time outbound schedules.

Home delivery - One of the hottest and least understood areas is the home delivery component. Moving beyond fixed schedule parcel shippers, firms are rethinking their private fleets, procuring regional carrier relationships and addressing the pressures for free, next-day and same-day delivery or providing unique services to the home.

Fears of the big e-commerce guys moving into locales market are real. But these firms also have to learn a lot of lessons about local conditions, market tastes and so on.

The battle lines are drawn between traditional business models vs. e-commerce, as well as new and interesting retail models and are surprising many with their innovations - and successes.

The Outlook

In 2016 enterprise will invest staggering levels for omnichannel, but firms need to focus on their specific requirements. From order management, fulfillment, allocations, RFID, e-commerce front end, as well as integrating with suppliers for available-to-promise, ship to store and drop ship, the technology and process budgets will flow into achieving the merger of channel data and providing a seamless customer experience.

Omnichannel Is Not Just for Retailers