Omnichannel retail and Click & Collect are not new concepts. However, the occurrence of the COVID-19 pandemic turned what had previously been seen as a matter of convenience into a matter of priority for health and safety. Now, as much of the world enters a second wave of lockdowns, omni-channel retail remains as important as ever.
Retailers’ struggle to not only keep inventory on the shelves but also understand the complete picture of demand, including click & collect and home delivery, is not just a problem in the immediate term but can have long-term detrimental effects on shopper loyalty.
Welcome to the third part of my series on the key questions you need to consider about your demand forecasting solution, where I’ll be exploring the keys to omnichannel forecasting.
The Question: With the explosion in omnichannel retail, can you incorporate all your data sets to forecast demand and fulfillment across all channels?
The pressures that retailers, especially fast-moving consumer goods (FMCG) retailers, felt in the second quarter of 2020 exposed weaknesses in the execution of the modern supply chain and proved that it is not prepared for sudden, dramatic shifts.
Further, research conducted by Brick Meets Click shows that, in March 2020, online grocery sales rose 233% and the number of customers rose 202% over figures gathered just 9 months previous.
As mature as supply chains have become, they are still challenged with the fundamental understanding of demand predictions and inventory visibility across so many emerging retail channels. In a benchmark report from RSR Research released in Q1 2020, Designing new ways to satisfy Demand, retailers cited unpredictability, growth of demand and the pacing of digital channel expansion as top challenges. Further, 75% of the retailers surveyed said that cross-channel fulfillment would drive them to rethink their supply chains in the next 5 years.
The report shows us clearly that, even before COVID-19, retailers recognized that it is essential to understand customer demand and needs across all channels. Too many retailers today simply cannot understand the total channel picture when it comes to effective demand forecasting.
What items are needed in the stores? How many of those items are going to be slotted for in-store picking? How much inventory will I need to have available for my home delivery customers versus my click & collect or locker pick up customers? These are all questions that have become critically important as online shopping moves even faster after COVID-19.
In order to truly provide an effective omnichannel experience, retailers need an end-to-end solution that can understand true demand across the enterprise and then manage inventory allocation into each demand stream and fulfillment channel.
An efficient omnichannel fulfillment program must ensure synchronized inventory to ensure on-shelf availability for both in-store and online shoppers. It needs to be able to be able to drive accurate pick times and locations for associates or third-party fulfillment partners.
Accurate fulfillment forecasting enables retailers to map demand forecasts to fulfillment channels to effectively prioritize and execute orders no matter when, where or how they are received by consumers.
Costs are always a primary focus for retailers. By connecting systems to optimize order management, retailers can lower fulfillment costs by sourcing from the most appropriate inventory source. By being able to confidently determine the best source for the inventory needed for any given fulfillment channel – be it on-shelf, warehouse, dark store or other – you’re always able to fulfil the needs of the customer at the lowest fulfillment execution cost.
Complexity in the omni-channel marketplace is here to stay, but how retailers manage it doesn’t have to be. By creating a unified supply chain, retailers eliminate siloed channels and, with them, the associated inefficiencies. Retailers need to be able to take control and manage the high volume of orders and channels in one place: e-commerce, click & collect, mobile apps, promotions and more.
Learn more about the vital role of omnichannel optimization in today’s retail in the whitepaper, Omnichannel Imperative: Meeting the needs of a new consumer
Read part 1 of the series: Is your demand forecasting solution working for you or are you working for it?
Read part 2 of the series: Are your demand forecasting systems connecting all categories across the store?
Read part 4 of the series: Avoiding the ‘blindside’: Inventory visibility and the agile supply chain
Read part 5 of the series: Don’t let your demand forecasting depend on history to repeat itself