Most apparel retailers were quick to see the growing relevance of cross-channel transactions. Regulars at their high street stores, they noticed, first browsed through the online racks. When customers did shop online, they sometimes asked to return outfits at a nearby store. And retailers started to rejig their systems to support this cross-channel shopping. But the challenges, they discovered, ran deeper.
When customers, having shopped online, returned items of clothing at high street stores, demand planners often had no visibility into this event – especially not in real-time or even near-real-time.
So, their systems, taking into consideration only online purchases (not the returns in-store) forecasted an inaccurate high demand for the particular line of clothing. As a result, store managers often received a larger inventory than they really needed or were able to consume.
Sometimes, the situation played out in the reverse. Customers having reserved products online, showed up at high street stores to pick their shopping. But store managers, with little or no visibility into items that are reserved online, often lacked the inventory to deliver – especially for fast-moving popular lines of apparel.
Making matters worse, the distribution centers often maintained two separate inventories – one for online and the other for offline sales – without the flexibility to systemically interchange stocks between inventories, if needed. Obviously, revenues took a hit.
Online and offline promotions, and pricing – each had a life of its own. Customers once in-store, on discovering that the same product was priced lower online, requested that a price adjustment be made at the store.
Most store managers felt compelled to comply. They treated this as a return and new in-store sale. But, in reality, margins were being eroded with in-store inventory being sold at online prices.
When retailers treat their online and offline channels as separate entities, but bring these together superficially to quickly solve the problems posed by evolving customer demands, it – at best – offers brief symptomatic relief. The core of their supply chain is still ill-prepared to adapt to the new realities of omnichannel retailing, and leverage the opportunities it has to offer. Finding a way for retailers to have a holistic view of transactions across all channels is the real problem that must be solved.
Create a data lake that presents retailer with a single, unified 360 degree view of all channels in near-real-time. This can help retailers effectively address pain points around inventory planning, improve sales and demand forecasting, and sync online-in-store promotions. Here’s how: