GUEST COMMENT Extending your supply chain to the store

Retailers who have made store stock available for purchase online have seen as much as 20% increase in online sales. It’s a true game-changer from a retailing perspective.

The growth of multichannel retailing has brought retailers and customers closer together, but it can be a logistical nightmare for businesses. They have been required to evolve the processes by which they organise, store and transport goods in a short space of time. The opportunity exists for most retailers with stores to fulfil online orders from store stock, especially where the online order is for customer collection.

Recent research from IDC has found that retailers’ estimates of what they have in their stores range from 60% to 90% accuracy. This is the challenge facing retailers looking to satisfy the multichannel delivery demands of consumers.

Modern retail stores need to behave more like mini-distribution centres as an extension to the supply chain, with stock control disciplines to drive stock accuracy substantially higher.

The supply chain has many stages – and more with multichannel fulfilment – which makes diagnosing problems in visibility or availability more difficult. But understanding some of the common problems does help understand how to improve.

Accurate receiving against ASNs, regular and frequent cycle counting to monitor shrinkage, accurate recording and management of return stock and real-time reconciliation of ePOS data are just some of the new disciplines required in store.

Of course, once store inventory is accurate that’s not the end of the story. The main benefit comes only when an accurate picture of availability is taken into account. Shoppers are filling their baskets or trying on garments every minute of the day so there are other supply chain disciplines to be introduced to gain sufficient confidence to sell store stock online. Assumptions about safety stock levels by product need to be made and then managed and maintained in the Order Management System.

Once store stock is being sold online there are yet more new disciplines needed in store where associates will be needed to pick orders and pack ready for collection. None of this is ‘difficult’ but its’ all essential as retailers move towards the goal of integrating all channels into a single, modern, efficient way of working.

The rewards are there; who wouldn’t want to see a sales increase of 20% without opening new channels and without increasing stock levels!

Craig Sears-Black, UK managing director of Manhattan Associates