As retailers increasingly switch to multi channel order fulfillment, they reinvent the supply chain to enhance asset monitoring, outbound & inbound storage, returns management, and distribution of goods. To survive this fast-paced retail environment, retailers need cutting-edge technologies for end-to-end visibility and inventory accuracy to enhance operational efficiency, optimize allocation, and boost turnover.
Improve traceability using inventory tracking software
Inventory serialization with barcodes significantly reduces human errors and enhances operational efficiency by digitizing data collection and process. Barcodes store the complete history of an item to improve tracking efficiency and error accountability.
- Serialization enables retailers to effectively manage orders, inventory, and shipments. Since each product has a unique barcode, its identification becomes simpler and more accurate.
- Barcodes help locate items easily within a warehouse and provide insights into the movement of inventory.
- Barcode and RFID contribute significantly to productivity as they automate tasks thus reducing manual efforts, human errors, and the need for paperwork.
Build your network strategically
As customers expect same-day deliveries, retailers operating across multiple channels find it extremely challenging to catch up. There is a need to distribute inventory according to regional demand and build shorter supply chains for better demand and supply management and reduce pressure.
- Strike a balance between CapEx and OpEx: Retailers must selectively and strategically expand their network of warehouses and distribution centers, to keep CAPEX and OPEX under control and increase the speed of delivery to customers across channels and geographies. This is very important as setting up high-capacity warehouses costs a lot. Opting for urban or market-fulfillment center strategies, such as dark stores, and dedicated fulfillment locations helps meet their strategic objectives.
- Leverage automation: Refining analytics and automation to better position your inventory in key markets can be highly instrumental in reducing delivery time and logistics cost to customers. Serialization enables faster, accurate order picking and facilitates express shipping of priority orders. With 100% inventory exposure across all sales channels, retailers can significantly increase their ability to maximize sales.
- Ensure faster fulfillment from the nearest location: By processing orders from the nearest possible location (store or warehouse), the order time to the customer is significantly reduced. Regional fulfillment begins with a pre-season forecast and planning of inventory on the basis of local demand. In-season sales are then optimized with inter-warehouse transfers to meet the changing demand in a particular region. Likewise, distributed warehousing allows retailers to ensure greater supply chain flexibility and agility, and to prevent a broad-based impact across the market in case of disruptions in one location.
- Build last-mile partnerships: Finally, to complement efficient warehousing, brands need reliable, last-mile delivery partners for faster customer service. Partnering with regional carriers and expert tech providers consistently enhances delivery standards. Such value-adding partnerships and collaborations help address last-mile challenges with greater effectiveness in the future.
Inventory vs marketplace model for inventory management
In view of the growing trend of omnichannel retail, an important strategic decision for new entrants in terms of choosing a marketplace model vs an inventory model. With D2C business gaining momentum around the globe, there is increasing popularity of marketplace-led models for inventory management.
In the inventory-led inventory management model, large multi-brand retailers source products from merchants and stocks them. The marketplace model on the other hand, simply acts as a meeting place for buyers and sellers, although it offers shipping assistance by partnering with selected logistics players. The marketplace model is in line with the much preferred zero-inventory policy. It is investor-friendly, highly scalable, and gives brands greater control over their inventory and customer data.
Use omnichannel for expansion, efficiency, and higher CX
A successful omnichannel strategy puts customers in the driver’s seat. In fact, 53% of leading European retailers implement an omnichannel strategy because it improves customer lifetime value. With omnichannel, retailers can reach new customer segments and realize exponential growth in their business due to plenty of flexibility and convenience.
Operational efficiency is one of the major challenges in retail supply chain management. With the omnichannel strategy in place, retailers have a holistic overview of their market and there is no need to create or implement separate strategies for each channel. By gaining better visibility and exposure to their inventory, retailers are able to increase inventory turnover, optimize stock levels and automate replenishment. This avoids losing business due to out-of-stock scenarios. The most significant benefit of omnichannel retail is increased sales and revenues. Having the right strategies in place to tackle the challenges inherent in omnichannel retail is crucial. Which strategies retailers opt for depends on their business objectives, constraints, assets, and leadership outlook.
12 April, 2022