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The best-laid plans are only as good as the systems in place to execute them. This is where the supply chain comes in. Think of the omnichannel strategy as the conductor of the symphony, ensuring each department plays its role when needed. Supply chains are the actual instruments used to play the music. If the instruments aren’t the right ones, aren’t delivered on time, or are not in working order, the sound coming from the symphony is off-key, resulting in poor customer experience.
It all starts with inventory. According to Forbes, inventory comprises 25-35% of the business operations budget, so it is critical to get it right. It can make or break your omnichannel strategy. How do you go about driving efficiency to maximize sales, minimize inventory carrying costs and meet the customers where they are?
Inventory visibility and accuracy: Real-time inventory management systems are the foundation. Internally, they provide information to meet demand according to channel. This ensures the right products are in the right place at the right time. Externally, they drive purchasing decisions and if that real-time visibility isn’t working, the customer experience is broken. Imagine going to a store to buy a birthday present listed as in stock on the website, only to find it's unavailable when you arrive. A frustrating scenario not supported by a real-time inventory management solution.
Automation of complex order fulfilment: Takes cost out of the system in terms of efficiency, but also improves the customer experience by getting a product to them faster. Reducing the likelihood of errors and delays, leading to higher customer satisfaction and repeat purchases.
Buy online, pick up in-store: No longer nice to have, BOPIS is a baseline customer expectation. Customers use BOPIS for a variety of reasons, but their expectation that it is a seamless one is universal. BOPIS is a driver of attachment in-store. According to the International Council of Shopping Centers, 67% of orders include items added in-store at pick-up. BOPIS isn’t about providing a solution for pick-up, it’s about creating trips in-store where retailers can build on the initial sale and increase connection to the brand.
Seamless returns: Returns are an expensive cost of doing business, but like BOPIS, they are a baseline customer expectation. Recently, retailers have gotten creative to take costs out of the system. Having customers keep low-priced or very large items instead of shipping them back as a return or incentivizing customers to return them to a physical store.
Proven success in driving ROI through supply chain optimization
Not only is it important to have the right systems, but it is also even more critical to ensure that those systems are configured to the individual business needs and requirements. One size rarely fits all. We worked with a major omnichannel, UK Consumer Electronics business, years after they had made an 8-figure purchase of a well-known software provider’s new forecasting & replenishment technology, which was yet to deliver any Return on Investment.
By changing part of the methodology required for processing key data inputs and by utilizing advanced data science techniques to optimize forecast accuracy, we were able to dramatically improve product availability across all product categories for a net reduction in stock. Furthermore, by tuning the existing replenishment methods and parameters and implementing more nuanced replenishment settings for the product catalogue, we were able to reduce inventory by almost 40%, whilst improving product availability across all channels at the same time.
Customers don’t see channels; they see brands. They are looking for a unified experience across interaction points, regardless of when and how they choose to engage.
Mastering the art of an omnichannel supply chain is the key to delivering this unified experience and ensuring customer satisfaction, end-to-end.