Categories
Technology

Building Integrated Digital Supply Chains for Omnichannel Retail

Supply chain integration brings together all the functions in omnichannel fulfillment into a single system. It necessitates careful coordination and alignment to ensure everyone is working towards the same objective. Supply chain integration is an ongoing process that needs to be regularly updated and tweaked as the business evolves.

Most common Supply Chain Integrations: 

  • Vertically integrated Supply Chains: Vertical integration occurs when a retailer takes control of one or more stages in the fulfillment process. Thereby, owning multiple stages of the process with the aim of increasing market share and gaining tighter control over the supply chain. Vertical integration can be backward, towards procurement & production, or forward towards the end consumer. 
    • Backward Integration: When a retailer expands across multiple supply chain segments beyond its value chain, e.g. merging operations with another company that provides the goods or services required for omnichannel fulfillment. A basic example of backward integration could be that of a fashion retailer partnering with a garment manufacturing unit.
    • Forward Integration: When a retailer takes control of the business activities ahead in the value chain, expanding to the next levels of the supply chain and getting closer to the end consumer in the value chain. For example, a fashion retailer pursues forward integration if it partners with a last-mile delivery company.

Marketplaces are a great example of vertical integrations. They bring together sellers and buyers in a single platform, making it easy for both to find what they need; a greater reach to a larger audience, and better prices.

  • Horizontally Integrated Supply Chains: Horizontal integration is a strategy when related or similar functions being done by multiple companies merge. In its most basic form, horizontal integration is acquiring a commercial entity operating in the same industry or level. In this technique, a company takes control by buying, merging, or seizing control over other businesses in the same sector’s value chain. Actual examples of horizontal integrations can be Adidas with Reebok and the merger of Vodafone with Idea. 

ERPs are an excellent example of horizontal integrations. They combine the various functions of a company, such as accounting, marketing, and purchasing, into a single system, thus allowing companies to streamline their operations and making it easier to track inventory and sales.

Benefits of Supply Chain Integration:

  • Improved control over distribution
  • End-to-end visibility
  • Enhanced flexibility to demand fluctuations
  • Increased efficiency
  • Cost savings
  • Improved customer satisfaction

Methods for increasing productivity & effectiveness through integrated supply chains:

  • Present and Future Business Mapping: Determine the present level of supply chain integration and the gap to reach the future desired state. This mapping could be done at four broad levels:
    • Basic: At this level, the extent of the silo approach needs to be mapped; if various departments within the company work on issues separately and disconnected.
    • Functional: Map the information flow within the company to determine the dependability and responsiveness of interdepartmental working.
    • Internal: Determine if all departments and functions are connected to one IT structure, use insights from central data analytics and inter-related information dashboards. Additionally, map the alignment of overall company objectives, for example, the customer-first approach, along the entire value chain.
    • External: Determine if all vendors and service providers in the supply chain collaborate and operate almost as one to meet customer demand, boost efficiency and profits, and meet OTIF.
  • Data Integration and Data Analytics: Consumers produce an enormous amount of data, that can significantly impact supply chain management and improve demand forecasting. Using consumer and corporate data to identify threats and opportunities in the supply chain can assist retailers in mitigating risks in omnichannel fulfillment. This is only feasible if supply chain system integration is implemented. Also, real-time updates are essential for effective supply chain integration. Everyone involved in the process needs access to up-to-date insights to make quick decisions based on the latest data analytics. Supply chain planning with real-time data analytics ensures economies of scale, OTIF, and that inventory is correctly aligned with demand.
  • Integration with Logistics Partners: This ensures that products are stored in distribution warehouses and delivered to the customer quickly and efficiently. Crucial for supply chain integration is better collaboration with vendors through connected systems, leading to overall improvements in inventory management. End-to-end supply chain transformation is required to implement a successful last-mile plan. Retailers must establish a last-mile strategy that addresses their current end-to-end supply chain inadequacies and aligns them with the final objectives. A digitally integrated supply chain, for example, may help distribution centers construct a comprehensive last-mile solution that reduces delivery lead times.

Digital supply chain integration strategies are essential for companies looking to fulfill orders through omnichannel retail. Businesses can streamline their operations and provide a great customer experience using the right tools and tactics. Bringing all the stakeholders together to streamline processes as one continuous and transparent flow might be challenging. There are, however, a variety of tools available today that can make the process of supply chain integration simpler.

Categories
Technology

Advantages of the Marketplace model vs Inventory model for E-commerce

The e-commerce industry has been around for more than a decade now, and it has changed the dynamic of operation of most of the world’s retail marketplaces. One of the major shifts e-commerce players have experienced is the shifting from an inventory-led model to a marketplace model for inventory management. The inventory-led and marketplace e-commerce models are both major parts of the e-commerce industry, but play different roles in the market. Marketplace platforms and online stores have both become powerful e-commerce business models within the digital economy.

Let’s look at the definitions of the inventory model and the marketplace model:

Inventory Model– This is when a marketplace e.g. Amazon, sources volumes of inventory from brands & sellers and stocks it in its own warehouse. The e-commerce marketplace owns the inventory and sells it directly to the customers, managing the logistics and every aspect involved in the e-commerce business. 

Marketplace Business Model– Following a zero inventory policy, the e-commerce platform acts as a facilitator between the buyer and the seller, providing an efficient, transparent, trusted virtual environment for commerce. The inventory remains with the seller and customers directly buy from the sellers, while the e-commerce platform manages the logistics. 

With increasing momentum in the D2C business model, the marketplace model of inventory management has become popular. As marketplaces can stay lean, they are prepared to adapt to the changing competitive e-commerce landscape easily.

5 advantages for sellers to take on the ecommerce marketplace business model of inventory management are:

  1. Better Capital Utilization for maximizing efficiency – Managing capital investments wisely means better cash flow, faster business growth, and greater competitive advantage. Traditional e-commerce ventures were highly capital-intensive involving setting up large storage spaces and handling associated management, warehousing, and logistics costs. The marketplace model of inventory management now distributes this burden to individual suppliers thus making business more viable. While Marketplaces manage the platform and logistics, sellers manage their inventory which gives them better control over the supply chain.
  2. Highly Scalable– New-age technology solutions like Increff WMS, allow sellers to expose 100% inventory across multiple sales channels simultaneously. Without segmenting or blocking inventory for a specific channel, sellers can achieve greater inventory visibility, higher sales, better margins, and greater cash flow. With the real-time inventory update feature of Increff WMS, as soon as an order is placed on one channel, that quantity of inventory gets deducted from the overall stock, so the available quantity of inventory is only visible at all times. This prevents marketplaces from accepting excess orders even during peak sales. The robust tech backend facilitates millions of interactions between the servers every second, without any downtime, to ensure perfect sync. With the rise in SaaS technology solutions, infrastructure upkeep is low for sellers since maintenance and updates are handled by the tech provider. 
  3. Better control over customer data – As orders directly reach the seller, they get complete access to customer data. With efficient warehousing and faster order processing using Increff WMS, brands/ sellers can ensure faster order fulfillment and better customer service. They can analyze region-wise demand and plan merchandise for the upcoming season accordingly. 
  4. Wider Reach – Marketplaces have an existing well-developed customer base so individual brands/ sellers can capitalize on it thus saving efforts and costs in marketing for themselves. They also have a well-established network of Third-party logistics providers so brands/ sellers can ensure efficiency in the last mile.
  5. Investor-Friendly – Entrepreneurs need financing and support to flourish their startup idea. Marketplace provides an established platform to expand the business, maximize sales, minimize returns and increase brand loyalty. D2C aggregators like Globalbees, G.O.A.T, Mensa Brands, etc. are investing in D2C brands and using advanced tech platforms, like Increff WMS, to boost the business growth of individual brands in their portfolio. Such immediate growth creates an advantage over other businesses searching for an investment.

Increff WMS solving challenges of the Marketplace model for Brands & Sellers

  • Increff WMS allows efficient inventory management, 100% accuracy, and traceability of inventory within the warehouse. 
  • Sellers need a central standardized platform to view all data that would be coming from multiple marketplaces. Increff WMS provides a single platform to view inventory movement across different sales channels and multiple downloadable reports, at every stakeholder level, for in-depth analysis. Brands can analyze sales at individual channel levels and estimate the right assortment plan for each channel to capture maximum customer demand.  
  • The real-time inventory order sync feature ensures no excess order is received from any marketplace and that the inventory is updated at all times for a better customer experience
  • The robust tech solution supports millions of interactions per second between the Marketplace and seller panel, without downtime, to ensure smooth system interaction and zero glitches. This allows easy, effortless business scalability and growth. 
  • Inventory serialization in Increff WMS allows rapid returns processing and efficient re-commerce to maximize sales opportunities.  
Categories
Technology

7 Best Ways to Reduce Omnichannel Fulfilment Costs

The retail industry has broadly acknowledged and understood that slow and steady might no longer win the race. Operating in this digital age, being fast and accurate in order fulfilment is crucial to success.

Today B2B and B2C consumers expect fulfilment beyond seamlessness of identifying and buying a product, accuracy and on-time delivery, to post-sales support. 

This has been a difficult target for retailers, given the exponential growth and multiplication of sales channels. The market is expected to grow at a CAGR of 7.7% from 2020 to reach $29,446.2 billion in 2025. The global retail market is expected to reach $39,933.3 billion in 2030, as a result, realigning retail fulfilment has been the top priority in the past few years, and the industry has made a paradigm shift from the conventional “warehouse fulfils” model to the “omnichannel fulfilment” model.

What is Omnichannel Fulfilment?

Omnichannel fulfilment means that a retailer’s inventory is available on multiple sales channels, both online and offline – to provide a unified shopping experience to the customers. Omnichannel fulfilment optimizes resource utilization to ensure that orders can be fulfilled from a store or a warehouse, whichever is convenient and nearest to the customer. 

Critical Advantages of Omnichannel Fulfilment:

  • Accelerated Inventory Turns
  • Shorter Lead Time 
  • Improved Customer Satisfaction
  • Improves Brand Loyalty

Rising Costs in Omnichannel Fulfilment:

Order fulfilment speed and accuracy is at the core of giving experiences to customers that they demand today. Many retailers struggle due to omnichannel fulfilment’s high logistical and administrative costs. 

The reason is the complexity of sales and distribution through multiple channels. The challenges could be in the following areas:

  • Transportation and shipping costs are fluctuating and ever-increasing. Throughout the retail supply chain, logistics costs are paid to manufacturers, trucking companies, third-party logistics service providers, shipping carriers, freight brokers, and various other vendors
  • Inefficient warehousing processes lead to inventory mismanagement and loss in sales
  • Inadequate inventory stocking and allocation in stores, warehouses or fulfilment centres, resulting in regional product shortages, overstocking and inventory mismatch 
  • Lack of inventory analytics that can provide an overview of historical operational performance across different sales channels 
  • Last-mile challenges like lack of infrastructure leading delayed fulfilment in smaller towns
  • Manufacturing defects or other errors in products that are sold and shipped
  • Messy and expensive reverse logistics to manage returns

Retailers will need to be innovative to be profitable across channels, as customers expect faster deliveries and 100%  accuracy in order fulfilment. Retailers can manage costs and significantly boost customer satisfaction by having an analytical and data-driven approach to omnichannel fulfilment strategy.

Best Ways to Reduce Omnichannel Fulfilment Costs:

  • Product Sourcing: It may be worthwhile to review sourcing from vertically integrated manufacturers closer to the retailer’s warehouse. This will ensure that sourcing is done in the most cost-effective manner.
  • Region-Wise Inventory Optimization: The idea is to be closer to the customer to reduce freight, delivery lead times and all costs associated. Retailers must ensure a healthy equilibrium between inventory distribution and regional demand by allocating the right inventory closer to the right customer, on their preferred sales channel. 
  • Outsource Multi-Location Warehousing: Dedicated contract warehousing reduces fixed and recurring costs. Retailers should consider outsourcing warehousing or cloud warehousing services to reduce omnichannel fulfilment costs. 
  • Improve Picking and Packing Process: This labour-intensive task is always a high cost. Making the process more efficient and applying tools to measure employee efficiency would help reduce costs and increase productivity. Inventory should also be serialized to automate the entire process and have 100% inventory traceability.  
  • Inventory Analytics: This provides critical insights so retailers can improve business intelligence with sophisticated data science for the most efficient product handling. Retailers often have cash flow locked up in additional or inaccurate inventory due to a lack of analytics. It is imperative to invest in technology that gives a streamlined and most current view of your inventory in relation to demand. This will help improve cash flow and enhance ROI. 
  • Solve Last Mile Challenges: A report by SOTI finds that nearly half of global transportation and logistics companies use outdated technology for last-mile delivery. It offers little help in combatting delays and high shipping costs. With the implementation of a platform that can provide real-time information, logistics challenges and added costs can be addressed by businesses. Value-added partnerships also help companies synergize to streamline deliveries and returns. Fulfilment costs can be reduced as brands don’t have to build new functionalities but simple partner with companies that have respective expertise.
  • Simplify Returns Process: Consumers have come to expect a hassle-free return policy, no matter which channel they purchase on. The primary goal of reverse logistics is to recover value from assets to increase revenue and reduce expenses. This can be done by directing the returned product to the nearest point of supply and made available for purchase afresh, ensuring the defective products have been segregated. 

With an omnichannel focus, the retail business has become broad, diverse, and complex. However, some retail giants are ruling. These are retailers that have established immense credibility by delivering consumer expectations while maintaining healthy bottom lines. It is time every retailer prioritizes omnichannel fulfilment cost reduction by adopting technology-driven solutions. 

Categories
Technology

E-commerce Return Analysis: Solution to the Trillion-Dollar Returns Problem

A free returns policy by online retailers has been pivotal in the exponential growth of online sales platforms. The easy returns option has not only lured conventional brick and mortar stores, customers to online sales channels but has also given the customer more comfort and confidence in online shopping.

This has indeed led to a substantial positive impact on sales and revenues in ecommerce business channels. However, this “freebie” has a big cost attached to it. Once all the costs associated with ecommerce return management are added; shipping, storing, inspecting, segregating, etc, sometimes this is greater than the original sales price. Not only does this cost a logistical nightmare but steadily eats into the bottom lines of online retailers. 

Studies have shown that in 2021, retailers expected 16.6% of the merchandise sold, back in returns, which is a 6% jump from the previous year. As sales continue to increase, so does the returning trend. As per a recent NRF report, for every $1 billion in sales, a retailer incurs approximately $166 million in merchandise returns. These ecommerce return rate statistics have made it inevitable for retailers to devise a robust returns management strategy. 

Since there is no way to control consumer behaviour or stop online shoppers from ordering multiple variants to try and experiment, businesses must make returns processing hassle-free and efficient. It’s time to make ecommerce return policy more robust and reverse logistics less expensive. 

Ways to minimize ecommerce return rate:

  • Website Design: Making improvements in the layout and flow of the website eliminates the chances of clicking on the wrong product or size.
  • Product Display: Ensuring the product display has multiple high-resolution photos. One can also consider including product videos.
  • Product Description: Making sure the customer comprehensively understands the product and helps to ascertain if the product is right for them.
  • Sizing Chart: Providing a size chart relevant to the target customers’ area or geography.
  • Packaging: Ensure fool-proof packing so products do not get damaged during shipping. Use the best packaging material for that product type.
  • Online Support: Supporting customer concerns with a Live chat option via chatbots can eliminate any customer’s guesses while ordering.
  • Order Confirmation: Using online tools to confirm order placements, especially cash-on-delivery orders. This adds an extra layer of security, ensuring the orders are genuinely placed by willing customers
  • Order Accuracy: Being first-time right in the entire process from order receipt to delivery—right product to the right customer at the right time in the correct quantity.
  • Clear And Concise Returns Policy: Displaying your returns policy on the home page, highlights the terms and timelines of the hassle-free returns.
  • Transparent Delivery Lead Time: Providing an estimated date of delivery down to the pin code level

Factors to minimize the negative impact of product returns:

  • Data Analysis:
    • Region & Pincode wise: Use actual data to analyse area-wise consumer behaviour. This helps ascertain trends; perhaps a particular product type, size, colour, or fit may not be most suitable for a given area.
    • Product Categories: A streamlined returns processing should help list most returned product types and help formulate better sales and pricing strategies.
    • Reasons quoted for return: 100% traceability goes a long way to understanding reasons cited for products returned, and consistency analysis of the same should be helpful to set effective countermeasures. 
  • Logistics: Multi-system integration to streamline reverse logistics and enable returns at multiple warehouses or physical stores. Reverse logistics being messier than forwarding logistics, a data-driven multi-integrated tool will help reduce chaos and costs to manage returns more efficiently.
  • Inspection: Of returned products to draw relevance with reasons cited by customers for their returns and optimise re-sale of sound products.
  • Segregation: Of defective or damaged products will ensure the same product is not sold again and returned repeatedly.
  • Feedback: Both to and from customers who make returns will help retain valued customers and build trust and loyalty.

The Solution:

Increff Returns Management Solution elements all the above concerns to make returns management a lot easier and less costly. A few more features of this tool include:

  • Web-based automated SaaS tool
  • Segregates returned items into refurbished, rejected and re-saleable categories
  • Provides 100% Traceability
  • Reduces sales loss opportunity
  • Faster SPF claims to process
  • Built-in reports
  • Enables multi-warehouse returns
  • Is multi-system integrated
Categories
Technology

Maximize profits with Retail Price Optimization

What is Retail Price Optimization?

Customers are comparing prices all the time and across channels –  online and offline. They have apps that suggest discount codes and they are always looking for offers that give them the most value for their money. Even in such a time of changing consumer behaviour, unfortunately, many retailers rely on old-fashioned pricing practices, using past trends or even gut instincts to set their product pricing. This is not an effective way forward.

Retail Price Optimization is understanding in advance how customers will react to markups and markdowns in original price. With the use of advanced software, companies can stay ahead of the curve by strategically planning the entire price cycle while meeting both sales targets and margins. 

Price Optimization is done using complex algorithms that are designed to evaluate the change of demand with dynamic pricing strategies. This is matched with the data on costs, and inventory levels, to ascertain optimal prices to maximize gross margin. The price optimization strategy is incredibly important for a healthy and growing bottom line.

Retailers that are starting to use price optimization models and markdown management techniques to automatically optimize selling prices are gaining a leading edge over competitors. Machine learning continues to evolve and advanced software solutions combine this with price optimizing algorithms that make reaction to changes faster and more robust.

Factors affecting the retail price:

Internal Factors:

  • Business Goals/KPI’s: Conventionally, businesses set prices based on sales targets which becomes the driving force in price setting and price optimization. However, setting prices based on business goals alone is not effective anymore. An array of data, like fixed costs, historical sales data, market trends, customer sentiment, needs to be accumulated in conjunction with one another to fix the most optimum selling price.
  • Input Cost: Most manufacturers use the input cost plus a markup to fix the retail price. While this is an important consideration in devising the price strategy, it should not be done in isolation. Input cost alone fails to account for consumer-led factors which are essential to fix the right price. For example, the perceived value of the brand, whether the product being sold is a luxury item and customers are willing to pay a premium for it, brand loyalty are all factors that should be taken into consideration in addition to the input cost.
  • Past Performance: Evaluating the past sales performance of the product at different price levels to analyze how customers responded. This is one of the most crucial factors in developing the optimal retail price for different times
  • Inventory Factor: The volume of inventory influences retailers to change the retail price of products. Higher volumes of inventory usually lead to a markdown and discount in retail price to encourage quicker inventory liquidation

External Factors:

  • Demand Factor – The central driving force in retail price management is an analysis of the demand. Setting retail prices rigidly too high may lead to certain products not selling. Price elasticity is a relationship between the supply and price: the more elastic the prices, the more they influence the sales.
  • Competition – Setting retail prices too low can lead to price wars where nobody is making any profits and all are continuously lowering retail prices. A robust retail price management strategy should keep a close tab on competition activities
  • Sales Channels: The nature of sales channels, both offline and online is diverse today and plays an important role in demand creation and therefore retail pricing
  • Other Factors: For products that are climate-subjective or more popular during certain months of the year, price optimization should be done considering these factors

Process of Retail Price Optimization 

  1. Business Considerations: Collect accurate data of all of the internal factors mentioned above, input costs, historical data, competitor pricing, and fluctuations in demand. This comprehensive data will put into a picture how each of these factors affects demand and therefore the price and profitability.
  2. Customer Considerations: In conjunction with the above business considerations, retail price management requires in-depth data about customers and their behaviour. Customer reviews, demand and supply trends, market trends, and most importantly, customer sentiment towards the brand and product are data points that should feed the price optimization strategy.
  3. Product Value: One of the most important considerations is the perceived value of the brand’s products. If we can understand quantitatively how much the customer values the product or certain features, the pricing strategy can effectively satisfy customers and also help maintain a healthy margin.
  4. Data Analysis: Once all the data has been collected, it can be fed into software that will predict what segment of customers are willing to pay what price, in certain market conditions. This analysis determines markdown management and thus promotions.
     
  5. Pricing Strategy: After the data has been thoroughly analyzed, a pricing strategy must be put in place. There are various pricing philosophies that can be explored depending on the nature of the product. The pricing plan encompasses markups and markdowns at different stages of the product lifecycle.
  6. Continuous Improvement: Putting the pricing strategy in place does not amount to a rigid pricing policy. Once the plan is in action, the prices and respective demand and sales should be closely monitored. Market conditions change rapidly and unexpectedly, and prices must be optimized accordingly. 

Benefits of Retail Price Optimization:

Data-driven price rationalization in the retail industry allows businesses to set the right price at the right time. 

  • Price optimization keeps businesses safe and customers happy. Deep discounts and profit cuts may not be the only solution to meet sales KPI’s. With price optimization, brands get better margins as they base price on smart decisions by eliminating guesswork and using real data that matters. This means actionable insights that make a big, lasting difference.
  • Helps businesses devise product portfolio pricing, dynamically setting the price for different products in the family
  • Price optimization strategies allow businesses to put into play a markdown strategy as per changes in the season and market trends. Not only does this help minimize the seasonal loss in revenue but helps capitalize on higher demand in certain seasons
  • Data analysis helps determine the optimum price at different times for products sold at brick and mortars, in various geographic locations while factoring in uniformity of pricing on online channels
  • Implementing dynamic pricing leads to better inventory turns, thereby improving cash flow
  • Helps businesses identify and capitalize on best selling products
  • If the process of retail pricing has been automated with the use of advanced software, reacting to market changes can be quicker and more scientific 

An effective price optimization strategy keeps the customers happy and the balance sheet healthy. Every brand functions in an ultra-dynamic market and the retail price of products must be receptive to these changes. Increff Markdown Optimization tool helps automate pricing decisions at multiple points of sale level and dynamically increases or decreases discounts for the right set of styles to maximize sales and optimize profits. It identifies out-performers and bestsellers, based on the sales trends, and helps brands automatically re-order the right quantity at the right time to ensure no sales loss opportunity. 

Keeps your pricing strategy proactive to not just quickly adapt to market changes but also maximize profits. Now is the right time to plan and execute a price optimization strategy! Know more about Increff Markdown Optimization: https://www.increff.com/dynamic-markdown/ 

Categories
Smart Merchandising Technology Warehouse Management

How D2C Brands Scale Exponentially with New-Age Inventory Management & WMS Solution

D2C e-commerce is growing faster with increasing penetration of mobile and internet services, and the mushrooming growth of 3PL companies, especially in the urban areas. It offers benefits like cost-cutting, greater control of the supply chain, better quality management, and more efficient returns management. 

All this requires automated support in terms of inventory storage, order management, packaging, and logistics. This is where a new-age Warehouse Management Solution (WMS) plays a crucial role in inventory management for D2C businesses.

Inventory management and merchandise planning for e-commerce

As soon as brands take charge of their supply chain, a number of technical areas demand attention. Foremost is optimizing warehouse space to expedite order picking and smoothen overall order processing. Synchronizing incoming orders and inventory, establishing the best possible floor plans, and picking rules, are some of the prime functions of a new-age WMS. 

Maintaining inventory accuracy with unique piece barcoding assigned to each incoming piece in the warehouse is critical. Hand-held devices used for order picking, synchronize with the WMS and display complete product information on scanning the barcodes. The barcodes capture individual product details to help detect their exact location within the warehouse. It increases accountability by recording details of every action performed on the item within the warehouse, and also ensures order picking efficiency, enhances accuracy, and prevents errors. 

Assortment planning, space management, and in-season planning are some aspects of inventory management orchestrated by an automated inventory management solution. These solutions make use of analytics and algorithms to ensure inventory planning is aligned with the long-term strategy of a brand for a given customer segment.

Managing returns and rapid re-commerce

Returns management is a serious concern for growing brands. To keep returns under check and the cost of re-commerce under control, D2C returns management requires an automated solution.

An automated WMS helps brands accept incoming orders, sync with the inventory, and ship them as soon as possible. It helps trace returns, avoids delays, streamlines return management, and reduces the cost of return logistics. Products spending too much time on their way back to the warehouse are at a greater risk of getting damaged. Returns management solution finds the shortest route back, enabling brands to expose the stock for resale as soon as possible. It sorts products into categories such as refurbished, resalable, and unsaleable, based on which it disperses them in the value chain. As D2C brands seek to gain complete control of their supply chain, a comprehensive returns management policy is necessary and must be centered on automated returns management software.

Markdown optimization for D2C brands

Setting the right price could be a daunting task for brands. Going too low could affect their relationship with retailers and confuse customers about the authenticity or quality of the products. Dynamic pricing, based on data-driven algorithms, takes into account a diverse set of factors like competitors’ prices, demand-and-supply dynamics, and levels of inventory. Dynamic pricing in e-commerce helps brands keep their pricing aligned with their channel strategy in a given marketplace.

Demand-based inventory distribution

For brands expanding over larger geographies, distributing inventory to multiple warehouses, so that the products are located closest to the customers, is the best way to reduce costs and ensure quick fulfillment. As brands expand their businesses, it becomes more expensive to ship products from a single warehouse as compared to renting out space at multiple locations. Tools such as Increff Regional Utilization ensures brands and retailers have the right levels of inventory as close to their customers as possible. The tool is completely web-based and performs millions of computations within minutes to find the right level and style of stock for each fulfillment center. 

D2C poses a number of challenges for brands but automation offsets these by providing sharp insights, precise allocation, and efficient handling. This makes brands highly competitive by keeping a check on delays, costs, labor overheads, and space or stock wastage.

Categories
Technology Warehouse Management

How To Choose The Best WMS For Your E-Commerce Business To Maximize Revenue?

With the increasing digitization of inventory records, product codes, and warehouse registers, human intervention in warehouse management has decreased drastically. To ensure seamless inventory management, a cutting-edge e-commerce Warehouse Management System (WMS) is essential.

Formidable challenges like planning and tracking inventory, minimizing delays in fulfillment, and holding minimum possible inventory can be effectively tackled by having only the best e-commerce WMS in place. Having a water-tight strategy for e-commerce order fulfillment and warehouse management can significantly boost your customer experience and loyalty, which will subsequently translate into improved revenues and profitability in the long run.

How to choose the right WMS

There are a number of factors to consider while choosing the right WMS. Here are the main ones:

  • Accuracy: An inaccurate or misplaced entry can create huge, unnecessary complexities across business functions. Precision is one of the most essential features of a WMS to avoid inexplicable losses and complications.
  • Scalability: As the e-commerce business grows and expands, the WMS must also be able to catch up. New-age This requires a predetermined understanding with the supplier in terms of integrations and technology upgrades.
  • ROI: It is important to consider all the costs that come with a WMS, including the hidden costs of training, integrations and upgrades. A seemingly cheaper WMS can often carry higher hidden costs. A comprehensive cost-benefit analysis, keeping your requirements in mind, is essential.
  • Integrations: Rather than spending extra on writing integrations, it is better to have a WMS that has a catalogue of existing off-the-shelf integrations. Integrations make your WMS more flexible by allowing it to interface with other ERP solutions seamlessly.
  • Cloud vs. On-site: Having a cloud-based WMS is often cost-effective in terms of upgrades and maintenance since the vendor is responsible for both. Cloud-based solutions also allow you to avoid any equipment-based expenditure.
  • Ease-of-use and training: Having an intuitive and user-friendly WMS allows your employees to adopt it without any training overheads and errors. This is especially important when you hire an ad hoc workforce in times of peak demand.

What to expect from an ideal WMS for online commerce? 

E-commerce Warehouse Management Systems (WMS) can help streamline processes by tracking the inventory within the warehouse and improving e-commerce warehousing significantly. Let’s look at some benefits that an ideal e-commerce WMS software provides:

  • An efficient inventory management system streamlined through automation
  • Optimal inventory visibility and tracking of diverse styles and quantities through a fully digitized process
  • Reduced inventory holding by selling more stock through 100% inventory exposure
  • Reduced operational costs due to minimal manual work required
  • System of automated alerts for soon-to-expire items ahead of time
  • Minimized delay and loss because of computerized inventory with no room for human error
  • Increased scalability and flexibility for your business with no audit delays
  • Faster e-commerce order processing and online order fulfilment 
  • Maximum sales captured with no minimum holding required 
  • Increased revenue for your business through more efficient business processes

How can efficient warehousing help e-commerce brands capture maximum sales and increase revenues?

E-commerce WMS helps enhance customer experience, retention, and loyalty by providing the following benefits:

  • User-friendly and intuitive WMS is great for online retail warehouse staff. The WMS comes with a simple-to-use dashboard customized as per the stakeholder’s level and requirement. With Increff WMS, inter-warehouse transfer of stock is also possible.
  • An ideal e-commerce WMS solution simplifies order picking and packing and ensures accuracy through serialization. It greatly improves inventory visibility and helps ensure correct shipment, complete and accurate order fulfilment, and a shorter cycle time overall. It also reduces the inventory holding period and makes upscaling your e-commerce business more feasible. Being completely automated, the entire process is paperless, uses little manpower, and eliminates the chance of human error.
  • A WMS provides a single view of inventory across the marketplace and a seamless order-inventory sync in less than 30 seconds. You can switch to such a system in as little as under 7 days without overhauling your entire warehousing system. The process of transition itself is also hassle-free. For instance, the time taken to train new users to switch to Increff’s Assure WMS solution is only 5 minutes. Besides, no data is lost in transition or system downtime. 
  • Best warehouse management systems for online retailers can guarantee 100% e-commerce order fulfilment. It ensures minimized lead time and logistical costs due to optimal inventory management. This contributes substantially to higher sales and revenue, thus positioning your e-commerce business as a strong contender amidst competing brands.

A great WMS solution thus lies at the very heart of modern e-commerce warehouses, enabling brands to reach out to their customers more efficiently and helping them excel in an increasingly competitive marketplace.

Categories
Regional Utilization Technology Warehouse Management

How Demand-Based Inventory Distribution Helps Future-Proof Your E-Commerce Business

As competition intensifies across the e-commerce space, brands must offer faster deliveries and efficient order fulfillment to stay competitive. Being able to project demand accurately and maintain inventory levels according to customer expectations is crucial.

A major factor influencing customers’ perception of a brand is the time taken by a retailer to deliver an item to their doorstep. Efficient and accurate order fulfillment has become key to building a strong e-commerce customer base, and it is equally critical for small and large businesses. While global brands/large businesses need to maintain their brand reputation and customer base, smaller brands need to build their customer base with perfect order fulfillment.

These trends are closely linked to demand-based inventory distribution and help brands create more efficient supply chains, ensuring better customer retention, brand loyalty, and soaring revenues.

The need for optimized demand-based inventory distribution

Optimized, demand-based inventory distribution allows brands to not just save on unnecessary logistical costs, but also avoid frustrating delays. It has helped brands save 10-12% on logistics and enhance overall margins by 30%. There are four main ways in which maximum regional utilization supports demand-based distribution:

  1. Faster deliveries: E-commerce customers these days expect same-day deliveries from brands. Storing items in the warehouse closest to the customers enables brands to fulfill orders quickly and maintain faster delivery cycles.
  2. Low rate of returns: Fulfilment delays are one of the major factors behind order returns. Demand-based inventory distribution ensures delivery of items within SLAs and reduces the rate of returns significantly.
  3. Splitting inventory smartly: Regional utilization allows brands to split inventory amongst warehouses in such a way that demand is always fulfilled from the nearest warehouses. Demand analysis is conducted at the pin code level and helps reduce order transit time, mishandling or damage in transit, and lower shipping costs.
  4. Cutting down on logistics costs: SKUs suggested by smart RU solutions are based on the best possible Pincode level warehouse-products mapping. The algorithm runs by processing data such as regional demand, warehouse capacity, and seasonality.

Tools to optimize regional utilization

Increff Distributed Inventory Optimization tool helps distribute inventory in a smart way to enable faster shipments at lower shipping costs. It enables brands and retailers to optimize Regional Utilization (RU) at the pin-code level in a hassle-free way. Since inventory placement services can be quite complex for brands with a high number of SKUs and low depth, constant demand analysis, and in-depth logistics planning are required. With this module, brands can leverage smart inventory allocation across multiple warehouses, and achieve higher regional utilization by warehouse fulfillment outsourcing locally. 

The role of distributed warehousing in demand-based inventory distribution

Distributed warehousing also known as cloud warehousing, allows brands to partner with third-party logistics (3PL) service providers, and rent warehouse space in different locations to stock inventory based on local demand. This provides several advantages to e-commerce brands including increased efficiency, reduced long-term rent, storage costs, shipping costs, and faster order fulfillment.

  • Distributed warehousing helps brands minimize risks in case of local emergencies such as fire or natural catastrophe. Having products located at various locations helps insure against such risks.
  • Distributed warehousing also allows you to enter new markets rather than be restricted to one region. As your capacity for fulfillment increases in a new market, all that is required is a marketing effort to establish a new customer base.
  • When a product is located closest to the customer, it is very likely that it appears with the highest ranking on a marketplace. This is because the speed of delivery is one of the heaviest weighted parameters for product ranking.
  • As you expand and start selling higher volumes across regions, the shipping costs from a single warehouse will exceed the cost of an additional e-commerce warehouse. Expansion across regions, therefore, necessitates distributed warehousing.

How cloud warehousing helps e-commerce businesses?

It helps brands avail outsourced warehouse distribution across geographies and benefit from higher visibility on the marketplace. Increff’s Cloud Warehousing service, for example, is an outsourced warehouse distribution service. This lies at the heart of smart inventory placement services through which brands can distribute stock to multiple 3PL warehouses across the country for better delivery to the end-consumer. 

Warehouse outsourcing benefits brands in ways beyond just reducing logistical costs and minimizing delays. It offers the flexibility to switch from CapEx to OpEx model of operations and ensures efficient management of warehousing without additional operational bandwidth. It can be implemented within 7 days, and a pay-per-use model, resulting in immediately reduced lead time, inventory holding, logistics, and overall costs, leading to increased customer satisfaction, sales, and profitability margins.

As competition intensifies in the e-commerce space, brands are expected to be more responsive and proactive towards their markets. With the help of demand-based inventory distribution, you can future-proof your e-commerce business against fluctuating demand, stay competitive, and grow steadily. 

Categories
Technology Warehouse Management

How to Choose a Warehouse Management System

A warehouse management software is vital to the successful management of the warehouse. Research shows that it can improve warehouse efficiency by 27% by facilitating timely order fulfillment, packing, and picking. Owing to that it is essential to know how to choose a warehouse management system from the different types of WMS available.

When used correctly, WMS can propel your warehouse to unprecedented levels of success. Some benefits of using a WMS system include:

  • Efficient labor management
  • Accurate inventory and management
  • Reduced paperwork
    So, what factors must you consider when choosing a warehouse management system? Here is your complete guide on how to choose a warehouse management system.

Analyze Your Need for a WMS

One cannot emphasize just how big a commitment getting a WMS is. Not only do you have to spend money on the technology, but you also need to train your employees to use it and acquire the hardware and infrastructure you need to make it functional.

Therefore, it is critical that you thoroughly analyze your need for the system. Otherwise, a lot of time, effort, and resources will go down the drain unnecessarily.

Size is one of the biggest influencers in installing a WMS. If you have a big warehouse with multiple floors and endless storage units, it goes without saying that managing it can be quite a challenge. In such a scenario, a WMS will prove invaluable. But this is not to say that smaller warehouses cannot benefit from WMS. If your warehouse’s storage and removal processes are complex, you also stand to gain a lot from WMS.
For instance, if you store products for an e-commerce store, you may find that packaging requires more attention to detail. This is because you have to pack each customer’s order individually, ensuring that you do not mix up their purchases.
By contrast, if you deal with a business that generally requires items in bulk, packaging and shipping are relatively straightforward. Therefore, with the e-commerce store, investing in a WMS makes good economic sense.
Additionally, if products require specific conditions for shipping, this can add a layer of complexity to the packing process. For instance, if some goods require refrigeration during shipping, while others need to be frozen, you need to take extra care to ensure that they reach the destination in good condition. For this, a WMS can come in real handy.

Budget For Warehouse Management System

Another critical consideration when choosing a WMS is your budget. You don’t want to invest in an expensive system only for you to discover one year later that it does little to boost your business efficiency.
Warehouse management systems typically come in three tiers. The cheapest tier, usually known as a Tier 3 WMS, performs the most basic warehouse management functions. These include confirming and tracking inventory and stock.
A Tier 2 WMS performs more complex functions, including:

  • Managing customer portals
  • Reporting
  • Providing restocking, receiving, and storage guidelines

The most expensive systems (Tier 1 WMS) can perform more complicated tasks like assigning work to employees, guiding them to the correct location of the goods they want, forecasting, and improving response times.

Another way to gauge the cost of a WMS is by listing down the price of each item. For instance, you need to consider the licensing, training, development and upgrading, and support costs. For this, you should have a candid conversation with your provider to get an accurate figure on the cost of the system.

While discussing the costs with your provider, beware of hidden charges. These may include seemingly small expenses like travel costs that accumulate to outrageous sums over time. Additionally, comparing WMS costs can help you negotiate the pricing better.

When creating a budget for your WMS, the final tip is to consider the 5-year cost of using the system, inclusive of the hardware and infrastructure costs. If the figure makes business sense and you will get worthwhile returns, acquire the system by all means.

Ensure Seamless Integration with Existing Systems

Supply chains stretch beyond the confines of a business and encompass 3rd party services. While an ERP might be able to unify the internal business, the logistics aspects of a business need to be handled efficiently with a specialized WMS. The relationship that your business has with your ERP vendor will impact the success of a WMS. You need to communicate and have a good working relationship from the start. The integration needs to allow for seamless data communication between both systems.

This is critical when the information is used for internal work and communicated with internal or external partners. Both systems can speak the same language, so new data does not have to be re-entered daily. This causes errors and isn’t good for business.

Request for Information on How to Choose a Warehouse Management System

You have already settled on whether you need a WMS system and how much you can spend on it by this point in your decision-making journey. Now it is time to contact vendors for offers.
The best way to do this is to create a Request for Information or RFI form. This form is a questionnaire to help you obtain the requisite information.
Start by describing your business, what it does, your vision for it, and how the WMS fits into your business. You should also discuss your warehouse at length, providing pertinent details such as:

  • The number of loading bays
  • Picking and packing locations
  • The average number of transactions in a day
  • The primary users of the system, like pickers, packers, forklift users, or management
     

Then, create a list of questions you wish your provider to answer. For instance, you may request information about:

  • Their area of specialization and expertise
  • Owner of the system’s source code
  • WMS features
  • Average size of their clients
  • Number of clients and sites using their product
  • Ease with which you can connect multiple warehouses
  • Ease of integrating the WMS to your ERP,
  • Availability of pre-built marketplace integrations
  • Level of support you can expect from them
  • Estimated cost of using their product
     

When creating your RFI, it is best to refrain from describing how you intend the product to work. This is because you may cloud the ingenuity of your provider, thus blocking out more efficient and possibly cheaper options that would be the best fit for your business.

The Provider’s Commitment

The final consideration for choosing a WMS is the provider’s commitment to your company. The relationship you develop with your provider can be critical to the success or failure of your business.
You can gauge a provider’s commitment to your business on their enthusiasm and response to your concerns regarding the systems. A committed warehouse management system provider will always look for the most efficient solution to your issues and point out a cause of action that best serves your needs.

The Final Word on How to Choose a Warehouse Management System

No doubt choosing the perfect warehouse management system from the different types of WMS available can be complicated. However, there are numerous factors to consider settling for a well-serving warehouse management system as mentioned above.
If you are looking for a reliable WMS provider, look no further from our company. We will guide you extensively on how to choose a warehouse management system that best fits your needs. So, contact us today to start the conversation on the best options of WMS for your business.

Categories
Smart Merchandising Technology

How retail stores can plan their merchandise accurately during the Black Friday and Cyber Monday Sale

Merchandise planning is an intensive process that gets more complicated around the holiday and discount season. Black Friday discount, which started as a one-day event spread to Cyber Monday, its digital version. In 2020, U.S. shoppers spent a record $34.36 billion on retail websites over the five days from Thanksgiving to Cyber Monday, up from $28.49 billion last year. 

A crucial change that was established over the years is that these discount days evolved from being one-day events to longer durations as their popularity increased. Retailers were finding it extremely difficult to manage the serpentine queues, hordes of people, chaos on the store floors, and high volume of sales on these two days. Now, discounts and deals are starting earlier than ever to meet the increase in demand while also easing the supply chain and shipping worries of the retailers. This change has enabled the retailers to sell more products in a shorter duration without experiencing pandemonium at the stores.

Merchandise Planning for Black Friday and Cyber Monday

To make the most of this sales event, retailers have to plan meticulously to ensure that the customer demands are met and their infrastructure doesn’t succumb to pressure. Efficient merchandise planning is done so customers can find what they want and purchase it without experiencing stockouts. Mismanagement can be catastrophic during the actual sales period especially because bargain hunters are quick to switch to competition and spread the negative word if they are dissatisfied with the experience.      

Avoiding chaos during discount season 

So how does a retailer avoid chaos on Black Friday and Cyber Monday? By planning each aspect to the finest detail, using smart merchandising and inventory management solutions such as Increff Merchandising Solution. It provides granular insights and in-depth store-style level analysis based on individual store performance and supports decision-making with concrete data. 

For existing stores, the focus needs to be on planning the display and distribution of the products to utilize available store space effectively. This can be done using planograms, a visual merchandising tool that formulates the store layout to maximize visual appeal and facilitate maximum sales. Increff Smart Merchandising Solution provides in-depth details of the products that are in demand to make these planograms more effective in encouraging sales. When the knowledge of current demand patterns is combined with scientific methods used in the creation of planograms, the stores can make maximum use of their resources such as display areas and shelves.

As many stores have had to relocate due to the pandemic and many new stores have had the opportunity to launch during this time, planning the right merchandise for each store is of extreme importance to ensure success. 

Here are some ways in which Increff Merchandising Solution can help during Black Friday sales. 

Analyze existing sales for pre-season and in-season merchandise planning

Traditionally, discount days were designed to get rid of overstock inventory to avoid deadstock but the magnitude of Black Friday sales demands analysis and anticipation. Evaluating existing sales is step one for all retailers as it provides a proper indication of products that are in demand. A new-age merchandising solution can identify top sellers or core styles, and low performing styles through trend analysis. It provides a base and direction to the inventory planning process as it helps determine what goods to stock, in what quantity, and which styles to markdown. It also helps determine which styles are suited for which stores so retailers can re-distribute existing inventory to maximize sales. 

Variable discounting as per store-level demand

As a retailer, this is an opportunity to earn higher profits and margins considering the volume of sales that takes place during this period. When customers are expecting heavily discounted products, it is unwise to use the same discounting strategy across all products as each has its own sales history based on customer preferences. Additionally, discounts often fluctuate depending on the demand at a particular location. A blanket discounting strategy could lead to losses. Merchandising planning software uses smart algorithms to determine appropriate discounts considering factors such as ageing of the style, past performance, True ROS, and cost margins. These analytics can help you avoid excess liquidation and losses. 

Optimize inventory distribution      

For a retailer to effectively plan for the sales season, it is important to consider complete inventory across stores and various channels of sale. To present the maximum amount of stock for sale, it is crucial to have a holistic strategy.  An automated merchandising solution can generate a dynamic store-style ranking to optimize inventory distribution. Event-based allocation of inventory can help ensure the right styles and products are present as per demand trends. This analysis can enable inter-store transfers and stock cover can be optimized across all stores, reducing chances of stockouts. 

Auto-replenishment and replacement 

Discount days such as Black Friday are the days when stocks fly off the shelves. An immediate need is to reorder and restock in time to ensure that stockouts don’t affect profitability. As this is also the time when retailers are getting rid of deadstock, it is important to ensure that the right products and SKUs are reordered. A smart merchandise planning software can automate reordering while maintaining checks and balances to ensure lead time is considered for every style at the time of reordering. Based on the auto-replenishment feature, stores can continue functioning seamlessly even during the peak sales period. 

Due to the pandemic, stores have to manage operations with less staff, and supply chains are stretched too thin trying to meet the unprecedented increase in demand. Irrespective of this, Black Friday and Cyber Monday are events that customers look forward to, which means they are offering an opportunity for retailers to maximize their earnings and profits in a short duration. Make the most of this receptive and favourable time by providing your customers with the best shopping experience.