Delivery on demand: profitable fulfilment in the ‘I want it now’ era

The battle for retail supremacy is fiercer than ever and one industry player in particular that is forcing all other retailers to rethink their combat strategy is Amazon. The Amazon online marketplace has changed the dynamics of retailing in the UK and around the world by continuing to make customer satisfaction its number one priority – ahead of everything else including even profitability – at least for now. As a consequence, other retailers are faced with little choice but to keep up with consumers’ constantly rising service expectations – and without the luxury of being able to fulfil customer orders at a loss. Craig Sears-Black, UK Managing Director at Supply Chain Commerce Solutions provider, Manhattan Associates, looks at why it is consumers that are driving this revolution, and how omni-channel retailers can meet shopper expectations without trading profit for popularity. With the explosion in commerce channels we’ve seen in recent years, retailing has become much more complex and order fulfilment has become one of the biggest challenges of all. Consumers aren’t prepared to wait for their purchases – they’ll simply choose to go elsewhere if another retailer offers competitive price and fulfilment options. As retailers race to meet rising customer expectations, many of them are fulfillng customer orders unprofitably. Shoppers are driving the pace of change and it is unlikely their demands will slow any time soon; if anything, the ‘I want it now’ mentality will spread further and increase in intensity. This means businesses wanting to grow their customer base need to know how to meet these rising standards at the same time as protecting and growing margins. How to build a new roadmap for profitable omni-channel retail In order to satisfy consumer service expectations, multi-channel retailers must have a single real-time view of inventory across the entire network and a single view of customer orders across every channel. Most importantly, they need to be adept at deciding what specific inventory should be deployed to meet specific customer orders. They need to evolve from just fulfilling products across multiple channels to offering the right product to the right customer at the best margin. To be able to do this, retailers firstly need the flexibility to be able to source goods from anywhere in the network, deliver to anywhere the consumer desires and allow customers to possibly return goods somewhere other than where they were purchased. Secondly, they need to be able to match orders and available inventory at any moment in time, across all channels. Within this context, the store, for example, has a key role to play by doubling up as a mini fulfilment centre so it can fulfil an eCommerce order that may be more costly or simply not possible to fulfil from the distribution centre or via supplier drop ship. All of this might be relatively simple when small volumes of orders are being taken but as volumes increase an advanced order management solution is needed across their network, so that retailers can respond flexibly to consumers’ needs, and can even start shaping consumers’ buying behaviour. Examples of this include steering shoppers towards a particular fulfilment option in the event of an overstock, or equipping customer-facing personnel with the cross-network data they require to cross-sell, upsell or answer customer service queries. None of this is possible, however, without the right technology in place. Our new online guide, The Land of Endless Aisles: how retailers can catch up with their customers, outlines why retailers need to invest in a solution that intelligently serves up product availability to all channels in a way that maximises revenue opportunities, optimises inventory performance and allows retailers to confidently make fulfilment promises to customers. Those retailers than can get all of this right - so they can drive loyalty, revenue and profits - will be the future winners.