Supply Chain Transformation Blog

Supply Chain Transformation Blog

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Omni-Channel Fulfillment

In these extremely competitive times within the retail industry, it is perhaps inevitable that an organization will continue to find ways to ensure customer service expectations are met.  The transition from purchasing an item at a physical store location has given way to several different channels for consumers. Mobile shopping, same-day delivery, and big data are forcing retailers to transform their traditional market-to consumer model to remain competitive. Omni-channel retailing enables a consumer to buy, receive, and return product when they choose. In the past, online and traditional retailers have performed differently in several areas.  The primary difference is that online retailers are, in most cases, more advanced in several keys areas than traditional retailers. For instance, online retailers have been more advanced in customer analytics and predictive up-sale identification, returns management, pro-active customer communications and site-transaction speed. However, in the past 24 months, traditional retailers have gained significant ground and, in some cases, are moving ahead. Additionally, supply chain management has also played a tremendous role in omni-channel retailing for both on-line and traditional retailers.

When you consider that today’s consumer is looking for a differentiated experience, it follows that fulfillment options need to be robust. There are several ways retailers can deliver a personal and differentiated experience. The goal of retailers is to get the right product to the consumer at the right time through smart personalization. Retailers are focusing on several aspects of improving the quality of information including data attribution, item set up, high quality imagery and data accuracy that enables targeted personal shopping experiences.  In addition, transaction speed is vital.  As mobile becomes the standard channel for transactions, customers will demand not only high bandwidth but also site-transaction speed and efficiency. Many retailers are focused on building out a network that will be required for success in this new environment.  A variety of fulfillment options have emerged which includes leveraging an entire company infrastructure including a store location. Retailers are expanding the number of stores that either ship direct or enable customers to pick up items that were ordered online. For example, “Click & Collect” which is a concept that started a few years ago allows a consumer to pick up an item purchased on-line at a physical store location. The ability to combine physical and digital shopping experiences will enable companies to maintain a competitive edge within an industry that is experiencing tremendous change.

As a result of changing purchasing patterns, inventory visibility has also become increasingly important. Retailers are improving their processes in several areas including EPC (Electronic Product Code) enabled RFID (Radio Frequency Identification), supplier tagging back at the source, and partnerships with third-party logistics (3PL’s)providers. EPC enabled RFID is a method of using automated identification using electronic tags to manage inventory receiving to storing or transmission of digital information. Retailers are beginning to expand the use across different categories within their store operations. Additionally, the retail industry could also benefit from the Global Data Synchronization Network (GDSN), which enables the sharing of accurate and up-to-date information between trading partners. GDSN also ensures that all trading partners have access to the same information.

Going forward, there are several other issues that need to be managed when extending the experience to other functions.  First, retailers must develop and maintain integrated and real-time customer systems.  Next, retailers must train employees in other functional areas to ensure that employees understand customer expectations.  Third, retailers must maintain integrated, back-end systems and processes to accurately track inventory, financial transactions, customer touch points and up-sale opportunities.  

About the author

Charles T. Trimarco
Charles T. Trimarco
Charles Trimarco is a Managing Consultant in Capgemini Consulting’s Consumer Products, Retail and Distribution (CPRD) Practice and is part of Supply Chain Management Service Line. He has experience within wholesale, retail, forest products, consumer food & packaged goods, automotive, industrial products, government, utilities, aerospace and financial services industries. Areas of focus include program & project management, business case development, supply chain strategy, distribution and transportation operations, operating model development, customer segmentation, business case development, and performance improvement.

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