Integrated Fulfillment: The Direct/Retail Balancing Act

Inventory flexibility is the best way to maximize sales in today’s economy. But many challenges prevent marketers with both direct fulfillment centers and retail stores from maximizing the inventory they have. E-commerce, catalog and retail have different planning methods and accuracy issues. It’s one thing to get the size distribution right for a region and store, but it’s another to plan for the way colors sell.

Many e-commerce sites will not take orders if the fulfillment center is out of stock or on back order. This gives customers the erroneous impression that the item isn’t available, even though it may be stocked in stores. And even if it is available, it may not be in a store nearby.

If your primary marketing channel is retail, you don’t want inventory riding around on trucks between stores or back to the fulfillment center to fill direct orders. At the same time, if you’re a store manager, you don’t want direct orders to strip your inventory of best-selling items if you don’t get credit for the sales. All channels — retail, web, catalog and wholesale — compete for best-sellers.

Many marketers are taking a very conservative approach into this year’s fall and holiday seasons. They’ll pass up sales rather than be significantly overstocked. Do you really want to lose a sale because you can’t get it to your customer conveniently?

8 Synergistic Strategies
Here are eight ideas to consider for achieving channel synergy to improve fill rates, customer service, sales and profitability.

1. Develop a nimble inventory strategy. Don’t let inventory get “frozen” in a channel.

2. Determine who in your merchandising or inventory control organization will make decisions about inventory planning by channel, and who will decide on purchases, planning assortments and the like.