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Store fulfillment has become ground zero for the convergence of many new business requirements. At its core, store fulfillment will now require improved inventory accuracy and more precise order orchestration. Warehouse management systems have been the key to driving inventory accuracy and process efficiencies, first in the DC and then e-commerce FC environments. However, there is no "one size fits all" solution to store fulfillment technology and operations design. The store fulfillment execution model differs significantly by retailer type.
The next wave of efficiencies in inventory accuracy and process efficiencies will take place in store fulfillment. What remains to be seen is how these requirements will manifest themselves in either WMS applications moving down into stores or possibly point of sale systems expanding their footprint to support store inventory management. At present, both are happening in the market.
As store fulfillment matures, several lessons learned from early adopters can be identified:
• Distributed Order Management: Early adopters approached order orchestration as a “least-cost” function with very limited data available to optimize a least-cost model. Going forward, expect a network level decision-making process considering additional elements such as service level, fulfillment-transportation costs, inventory aging, and final delivery options.
• Inventory Accuracy Visibility: In comparison to DC/FC accuracy levels, store accuracy is poor and lacking real-time capabilities. WMS features and real-time inventory control will drive improved inventory accuracy and visibility required to improve store fulfillment operations.
• Fulfillment Execution: The path to improved inventory accuracy is likely to follow the same path of WMS and real-time inventory control. Expect to see a new line of store fulfillment technology options with capabilities supporting discrete location control in both the backroom and store shelf next year. This technology is being built by WMS vendors from a fulfillment operations perspective but also by POS vendors hoping to leverage the existing store infrastructure investment already made by retailers.
• User Interface Devices (iOS and Android): Peripherals are the tools of choice in store fulfillment. The scale of store deployment and the ease of use requirement for store employees will drive the need for low cost and low training. Traits found in the iOS and Android devices are already in use by store employee every day.
• Deployment and Operating Costs: Consider the scale of deployment for medium to large retailers with needs of supporting 50 to 1,000+ stores. Deployment of traditional, license-based WMS technology in a store environment will likely be both cost and labor prohibitive in the long term. When considering the needs and inherent challenges in the next phase of store fulfillment, will SaaS-based WMS become the solution of choice in the next phase of store fulfillment?
Store fulfillment has largely been a CIO-driven tactical effort with speed to market driving the need to leverage existing technology investment over the last two years. Over the next few years, store fulfillment initiatives will become more CFO-driven and focused on the most cost-effective deployment of technology, inventory and labor. We can expect new technology offerings and deployment models tailored to meet the needs of store fulfillment.
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