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GUEST COMMENT How Luxury retailers can overcome fulfilment challenges

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Today’s consumers have come to expect an exceptional shopping experience both instore and online. In the luxury sector, this expectation is particularly high. Luxury retailers have always been ahead of the game when it comes to creating personalised and exclusive shopping experiences. However, as the ecommerce landscape has become more sophisticated, the need to deliver outstanding browsing and buying experiences has increased, writes Rob Shaw, MD EMEA, Fluent Commerce.

Rob Shaw, MD EMEA, Fluent Commerce

Whilst fulfilment complexity is a common challenge to solve for most retailers, luxury brand fulfilment is unique in more ways than one. Here are the top seven challenges that luxury retailers face when it comes to fulfilment and how they can be overcome:

Avoiding overselling
Part of what makes a brand exclusive is the limited availability of certain products. Sometimes a store’s inventory is controlled by headquarters—and sometimes on a global level, which makes inventory availability a challenge. When each location only receives a small number of items for each SKU, this puts pressure on the brand to monitor—in granular detail—exactly how many units are being sold and when.

Retailers must have an accurate view of store stock in near real-time, otherwise they risk overselling and a cancelled order. There’s nothing more disappointing than for a customer to visit the website, select an item and check out, to later get a notification to tell them their product is out of stock. Yet without an accurate, single view of inventory, out-of-stocks are bound to happen. 

Tracking accurate Available to Promise (ATP) and Available to Sell (ATS) inventory is extremely important, especially when there is no more stock available. And if there are replenishments, managing the levels, replenishment dates and in-stock positions become even more important. 

Think of high-value customers
Customer experience is always important. However, it’s even more critical for retailers’ high-value customers to have an excellent experience. To ensure these customers don’t have orders cancelled after ordering online, or leaving stores feeling disappointed, retailers can set a buffer stock. Safety stock can be set by product, category, location, or a combination. 

They can even add custom alerts: for example, one that triggers an alert to staff when a buy online pick up in-store / click and collect order comes in from a high-value customer. That way they can make sure they are getting the quickest—and best—experience possible.

Checking quality 
Quality is of the utmost importance when it comes to luxury goods. As orders are packed, retailers want to ensure all items have gone through a quality check. This is often a manual process. However, with the right system in place, retailers can configure workflows to manage and automate manual processes such as quality checks to alert staff when orders come through.

Payment fraud check rules
Manual processes can slow things down. But payment fraud checks are necessary when it comes to high-value—and high-cost—items. If a retailer’s average order value (AOV) is in the thousands, for example, they may want orders to go through a payment fraud check. A process that can be automated with the right workflows in place can check whether the buyer is a new customer or VIP. It will also evaluate the actual payment and credit card issuing company. 

Order consolidation 
Many retailers and brands rely on split shipments to get goods to customers faster. As a luxury brand though, the customer experience is always top of mind. This means that split shipments are not always the best option. Some customers may prefer fewer shipments. 

Retailers should provide customers with the option to have their order consolidated before shipping. They may even prefer to consolidate their shipments and provide a single shipment to customers, to provide a superior packaging experience, even if it means transferring inventory from one place to another. For example, if a retailer’s distribution centres (DC) have special packaging used just for home deliveries that’s not available in stores, they might transfer items from a store to a DC for fulfilment so order can be expertly packaged, before being sent off to the customer.

Transfer of ownership
Luxury goods are expensive—especially when you consider the cost of some luxury watches or handbags. Timing of the transfer of ownership between the retailer, shipper, and ultimately the customer, is extremely important, and should occur seamlessly. 

While many retailers will charge a customer for an online purchase when it ships, for high value items, precise timing can be essential. For example, in the seconds between the arrival of a courier and handing a package to them for delivery. At this point, it means the retailer is no longer responsible for the product—the carrier is. But only with agile systems can you ensure this process runs smoothly. And without a fast and seamless process, errors can occur—which can be costly to your bottom line.

Managing counterfeit returns
The luxury counterfeit market gets more sophisticated by the day. Counterfeit designer bags may come to mind, but phoney goods go beyond that—think sunglasses and perfume. And thieves are getting more sophisticated. Some order the actual item and then return a counterfeit product instead.

With the right information and technology, employees working in the returns centre can validate whether a product is genuine. Serial numbers, hidden IDs, even the packaging can indicate whether someone is returning a fake. Retailers can help make the returns process smoother when they configure workflows that prompt your staff to perform these checks when items are returned.

The stakes are certainly higher when it comes to luxury goods and customer experience. With the right technology, luxury retailers can handle the unique fulfilment needs of their brand, offering a service that goes above and beyond customer expectations. 

Rob Shaw, MD EMEA, Fluent Commerce

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