Commerce Trends

by Manhattan Associates

Q&A with Scott Fenwick on Omni-Channel Fulfilment

Omni-channel fulfilment excelled in 2014, but what can retailers still wanting to up their game in 2015 learn from those organisations already doing it successfully? Manhattan Associate’s Senior Director of Product Strategy, Scott Fenwick, shares his expert insight

What were the major retailer challenges during 2014?

Throughout the year we saw retailers trying to create a seamless experience for consumers in terms of how they browse, how they buy and how they take possession of merchandise.

The fundamental challenge in achieving this is inventory; every single project that Manhattan Associates took on last year, regardless of their business model or objective, began with the issue of being able to see how much inventory was actually available to the retailer to sell.

Whether they were trying to improve order management and fulfilment from their store networks or drop shipping direct to consumers, retailers needed to know with high certainty what stock was already on hand, how much was on order or in transit and – of that – what they could leverage depending on when the consumer required the item.

Were there any new trends that emerged throughout the year?

There’s definitely been greater segmentation of inventory by retailers, depending on who they are selling to and what channel they are selling in. More and more businesses are gaining total visibility, and that is empowering them to more dynamically determine how much of their inventory is truly available to sell.

For example, if a new item is introduced into your stores, you likely don’t want to make that entire inventory available to the web, in order to protect the store shopping experience. Later in the season, you’ll likely increase that inventory exposure in order to avoid unnecessary markdowns.

What lessons from 2014 should retailers incorporate into their 2015 strategy?

Take everything one step at a time! The retailers who most successfully developed their fulfilment model in 2014 were those who started with a single objective – whether that’s click and collect, ship from store or another. Wherever you start, there’s going to be an element of disruption, and you can’t fully predict the impact until you try it.

For instance, one of our clients turned on ship from store as a pilot last year, but found on the first morning that they had 350 orders to fulfil in a single store! They turned it off, sorted out the orders that had already been placed, and then set limits for how many orders could be shipped from store going forward so as not to drain resources. These types of learning experiences will enable businesses to better shape their strategy and control business operations this year.

What do retailers want to see in 2015?

Order management is going to be a big focal point in driving planning and inventory strategy improvements. Order management systems (OMS) will be the feedback mechanism enabling retailers to assess the assumptions made by merchandise planners going into the season and see how the forecasts played out, so they can plan the upcoming season with greater insight. We’re really going to move away from planning and inventory consumption working as separate entities.

What do you think will be the major order management and fulfilment challenges impacting retailers this year?

I think it’s going to get easier for retailers to explore new opportunities. Several leading edge organisations tested new models and technologies in 2014, and the lessons they learned will enable companies adopting this approach to embark on their journey further down the path to omni-channel inventory management.

It isn’t necessarily going to be a walk in the park for these retailers, though; the rate of change is speeding up and those with omni-channel order management and fulfilment solutions in place will be using their new found visibility and commerce availability to give consumers more delivery options.

In your opinion, what do you think is the secret to retail success in 2015?

Retailers are striving to create new and innovative ways to engage their customers. We’ve talked a lot about enterprise visibility, inventory availability and flexible fulfilment; the purpose of these is to give the customer what they want, when and where they want it.

The real winners in 2015 will provide confluent customer brand engagements. To achieve this, they will leverage retail store solutions that enable them to be personal, mobile and meet the customer where they are in their shopping journey.