The history offers a big deal of changes where at certain points in time, several forces gather to spur significant change. The industrial revolution, the age of computers, and the internet, are all examples of these landmarks that rapidly shift the trajectory of the world. The supply chain is in the middle of one such landmark caused by a retail model called omni-channel. The companies and brands who can transform their supply chains fast to offer omni-channel shopping experience for the consumer will be the ones who deserve to move forward. Those who don’t are destined to extinct.
Why is omni-channel causing a landmark? In omni-channel, there are changes in three key areas—the role of the store, the role of the DC and the way product is positioned.
The changing role of the store is obvious when offering superior services such as shipment or pickup of online orders is considered. However, stores are also now being used by consumers as research sources. Before ordering online, consumers want to see, touch and try on the product or ask questions. This change definitely affects how product is positioned; how store staff is trained, equipped and compensated.
Omni-channel model also has dramatic impact on distribution centers. As mentioned above, when e-commerce channel is first embedded into the sales model of a brand, order fulfillment was mostly done in separate operation centers. In order to simplify fulfilling the increasing volume of omni-channel orders and benefit a single pool of stocks and operations and, workforce; fulfillment operations are being gathered in single operation centers. However, fulfilling small e-commerce orders and shipping small parcels requires totally different processes than replenishing stores with pallet and picking algorithms and truckload shipments. The way of doing business in the distribution centers need to be reengineered, workforce needs to be retrained, and maybe automation equipment needs to be implemented. All of these similar changes must be implemented together to provide seamless and superior shopping experience for consumers.
Merchandising should also change with the rise of omni-channel. The omni-channel model represents the radical state of the consumer-driven economy and the consumer-driven economy will never be satisfied with the traditional push strategy based on the product and channel. The consumer and his/her preferences should be understood well, responded fast.
The combination of the change in the store, distribution center and merchandising cause the landmark in retail and supply chain management.
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