Many retailers are still wrapping their heads around the full value of implementing an order management system (OMS) within their operations. But as the industry storms into 2017, we’ll see sweeping changes that revolutionize the way omnichannel retail operates.
It has been widely predicted that sales, commerce and fulfillment investments will be one of the largest, if not the single largest, investment category in 2017, with some implementations replacing existing technology and others bringing it online for the first time. At the core of this development is the need for retailers to effectively view and manage their inventory. Specifically, this is important as inventory moves from distribution centers to stores to customers and back around again when some items are inevitably returned. There will be heavy emphasis on warehouse management this year, but the store is where value truly lies.
Leveraging Stores to Win
In 2017, retailers will increasingly manage inventory distribution at the store level in order to maintain brick-and-mortar retailers’ essential advantages over their pure-play rivals, even when fulfilling e-commerce orders. For example, a winter storm can knock the inventory of an entire warehouse offline for days, but more localized centers (i.e., stores) decrease the risk of disruption. Similarly, e-commerce sites can only upsell during the initial transaction, but as consumers come into stores to pick up online orders, there's significant potential for additional sales.
A cultural shift is necessary as the industry moves into omnichannel, requiring an injection of excitement onto the store floor. In this case, associates will become the front-line champions of omnichannel visibility and flexibility as retailers push for associates to make order flexibility part of the customer experience. They'll do so by implementing simple tools, dashboards and solutions that operate on tablets or PCs, showing where the orders are going, where products currently are and what needs to be done to complete a transaction. If a customer is coming in asking for a specific item, associates will be trained to leverage the technology and insights to provide the best answer and keep the customer’s business.
Mobile Devices and Barcode Scanning
Today, using mobile devices for picking ship-from-store orders is still a rarity outside of grocery and larger retail stores. However, we see this changing in 2017, as the speed and accuracy it provides to store associates requires greater technical depth than in a warehouse, as there are more variable characteristics for each product. Importantly, the device must allow the store associate to confirm they’ve picked up the right item through a barcode scan. Simply put, if fast and efficient retail fulfillment is a priority, then you need to be able to handle these basics.
Omnichannel Visibility Gains Momentum
To keep up with Amazon.com's pressures, not just in commerce but in the supply chain, retailers will be investing in omnichannel solutions that provide complete inventory visibility across the enterprise, eliminating the silos of years past and allowing them to provide far better customer experiences. They’ll be able to give customers any fulfillment option they want, will start leveraging their physical stores as distribution centers and will manage returns much more efficiently. This allows customers to shop and receive goods how they want, when they want, and boost business outcomes across the board.
Returns Are Where the Smart Retailers Will Outperform
Most retailers see returns as a curse. Smart retailers look for the opportunity hidden within the challenge. When customers bring back an item as a return, retailers must make it as easy and pleasant an experience for them as possible. An overwhelming number of customers with a positive returns experience will purchase from that retailer again. Better yet, if a retailer encourages shoppers to browse in-store, there's a good chance that they will not only purchase an equivalent value as the return, but have the opportunity to be upsold or to pick up a few additional items while they're there. Good service and a little goodwill shouldn't be underestimated.
Personalized Commerce and Customer Engagement
As retailers implement loyalty and smart CRM programs, personalization will be at the forefront of their strategies. Customers expect to be treated as someone special. Retailers need to treat each customer accordingly, making each feel like a VIP. This is much easier to do with great associates and a great store environment than an anonymous web page.
Smart Merchandising Starts With the Store
Physical stores aren't a luxury or resource vacuum. When leveraged properly, physical stores allow retailers to create experiences and fulfillment options (in both directions) that appeal to the consumer and make their shopping lives easier, more personal and more rewarding. Therefore, while other channels are critical to master as part of a successful omnichannel strategy, don’t forget that technology has the power to make your physical store the most powerful asset you have.
Nick McLean is the CEO of OrderDynamics, a company that powers innovative omnichannel experiences for retailers.