Consumers don’t distinguish between channels; they want what they want when they want it, this is why the concept of endless aisle has gripped the imaginations of any retailer that trades in stores as well as online. And why drop ship has become more critical as an operational channel for retailers.
In order to be successful in extending the range in store, often through mobile devices, or via retailers websites depends on true, real-time visibility of inventory (stock levels as well as location) and effective and rapid communications with all parties, including suppliers that can make products available, quickly.
To deliver on their customer promise, which could mean delivery in less than 30 minutes; retailers need a greater variety of fulfilment models, such as direct dispatch by suppliers to customers; drop ship.
Thankfully, technology has developed to the point where retailers and suppliers can now operate as partners with information flowing between them, giving them the visibility which is crucial in making products available to customer to purchase. Stock management, orders, promotions, pricing, labelling and returns can be managed with a large degree of automation, backed by alerts to ensure that exceptions can be ironed out before they impact the customer.
This may sound easy to manage, but it’s not, especially with aging systems that aren’t designed to work in this way. However, retailers need to address this as the multi-channel environment that they operate in becomes more and more complex as a result of the many variables that can be attached to a single order – delivery location, time of delivery, customer present/not present, returns and so on.
It is also important for retailers using drop ship that their brand integrity still remains. The customer doesn’t know that it is being shipped directly from one of your suppliers and thus when they receive it, it should carry your branding correctly; use the same documentation template and so on.
The challenge for retailers is to have an order management processes that can integrate into wider fulfilment and business intelligence systems, both internally and within the suppliers’ own networks. Only with this cohesion and interconnection can retail organisations maximise control over fulfilment, and ensure shipping direct plays to their strengths and not their weaknesses.