Paul Wagner, retail CIO and management consultant at DiCentral, recently spoke with Integrated Solutions for Retailers magazine about the benefits and challenges of adopting cross-channel retail. An excerpt from the interview:
How does cross-channel retailing create impediments to visibility in today’s retail supply chains?
Wagner: Cross-channel retailing is about providing the customer with the right merchandise at the right time at the right price, delivered by the means that the customer wants. Buy on-line, buy in-store, buy on-line and pick up in-store, buy on mobile device and ship from store, and sales order processing with direct-to-consumer fulfillment are just a few new ways for retailers to create customer affinity. Customers not only want a convenient and easy transaction done their way and on their timeline, they demand it and will penalize those retailers that fail to adhere. Predicting demand is hard enough for retailers; predicting the demand channel adds a layer of complexity only a minority of retailers are prepared to do.
The timing for retailers to focus on cross-channel visibility is difficult at best, as retailers are also challenged to lower inventory, lower price, innovate, differentiate assortments, source and distribute overseas, and create a level of service excellence that can compete in an international marketplace. Invariably, the lack of visibility in crosschannel demand creates pressure to gain greater flexibility and responsiveness in the retailer’s supply chain.
Entrenched are replenishment systems, allocation algorithms, CRM functions, and promotional mechanisms that are tuned to a more traditional retail model. Such systems and processes fail to take into consideration the complexity of cross-channel demand. This, combined with inflexible system architecture and legacy systems with limited capabilities, all contribute to the challenges retailers face.
Read the entire conversation here.
-Daniel Ford, DiCentral