The Dark Side of Omni
The “Retail Apocalypse” is over and omnichannel retail is becoming increasingly important.
Brick-and-mortar stores are the single most important brand touchpoint a retailer has. Specialty retailers are beginning to recognize that physical and digital channels are codependent.
The dark side of omnichannel retailing comes to light through the discrepancy of demand generation and order fulfillment, happening in two different channels.
Issues that arise include:
- Identifying where demand is generated because it can be generated online and picked up in-store, or vice-versa.
- Stores do not have enough available capacity of labor to perform omnichannel tasks (such as fulfilling returns) when digital sales represent 20 – 30% of total sales.
- Returns for items purchased online are deducted from the store’s net sales, which becomes an issue because historical net sales are used to forecast future sales and fund future labor spend.
- The effect this has on store management and staff is that they view the digital channel as competition and a threat.
- Everyone in the organization must support omnichannel activities to offer a consistent customer experience.
- Forecasting each store’s daily available capacity and putting this metric in the OMS for use in the decision tree to decide which store to drop a Pick & Ship order.
- Reporting each store as a market by geolocating each digital order to the nearest store, isolating brick-and-mortar transactions, and accumulating both digital and brick-and-mortar sales in to the store’s market sales.
- Allocating non-sell hours specific to required BOPIS and Pick & Ship activities.
- Considering compensation for store management on market sales instead of just brick-and-mortar sales.