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GUEST COMMENT The multichannel template – how to be personal and profitable

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The retail market is in a state of flux. Retailers are moving quickly and employing new delivery options all the time in order to retain customer loyalty. Retailers understand and are reacting to customers’ demands by enhancing their fulfilment options. It’s the only way to keep up in this new, fast-paced multichannel world. In order to do this, retailers need to address their legacy systems. Many are making incremental changes in order to compete. However, without real-time, enterprise-wide, inventory visibility, fulfilment simply won’t be a differentiator.

The majority of retailers now have a complete multichannel vision. It is no longer a disjointed approach driven by individual business needs. Over the last 12 to 18 months, retailers have seen that managing channels with a unified approach creates a seamless customer experience. As a result, showrooming is no longer the perceived threat it once was – in fact, retailers are now using it to enhance their proposition. With the meteoric rise of click-and-collect over the last year, retailers are starting to use inventory from stores and right across the supply chain – not just from the warehouse – to fulfil ecommerce orders, allowing customers to receive their goods more quickly and making it more profitable for the business.

In terms of moving their offering forward, retailers should look to the likes of Amazon, which has been successful in making the shopping experience personal for its customers. Retailers have realised that the more relevant the product is to the shopper, the more likely it is that they will buy. However, the real success for retailers lies in making it both personal and profitable.

So, what can retailers do to avoid the profitability gap? They need to ensure that profitability is at front of mind. Most retailers still have no idea how much it costs to fulfil an online order and this will lead to their downfall. Profitability can be achieved through having a single view of all inventory and fulfilling orders from a location which ensures a profit on that sale (often the bricks-and-mortar store – a luxury pure-play retailers don’t have). Retailers need to ensure that profitability is something that they are addressing first and foremost, whilst making it personal for their customers by giving them what they want, when and how they want it. But the longer orders continue to be fulfilled unprofitably, the more difficult the situation will be to rectify.

So, what does the future hold? Of course, increased sales are desired, but retailers should be careful what they wish for. Customers have higher expectations of retailers than they did just 12 months ago. Retailers must prepare by understanding the individual costs associated with making a sale, otherwise they may, unwittingly make a loss. Those retailers who currently have a single view of all available stock and full supply chain flexibility will be able to avoid these issues, leaving late adopters trailing in their wake.

Craig Sears-Black is managing director, UK, at Manhattan Associates

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