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Delivering On The Promise Of BOPIS…And Other Omni Channel Realities

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Access the full event here: https://event.on24.com/wcc/r/1951266/360F67F80AC78C0460873ECA6CC59D4E

"Connected consumers are expecting, and even demanding, flexible order and pickup options. And while research shows many retailers are expanding their BOPIS and other fulfillment option offerings, most brands are still struggling with actually executing on delivering a shared cart across channels.

Recent research shows 66% of retailers said that inventory inaccuracies made their BOPIS (buy online/pick up in-store) service offerings inconsistent.

This session will offer a deep dive into why retailers are struggling to align the data and insights they need to provide a seamless omnichannel inventory offering. It will also provide a use case example of how a top brand is using machine learning and AI to know what, when and where each SKU should be in the retail chain in order to optimize omnichannel inventory. "

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Delivering On The Promise Of BOPIS…And Other Omni Channel Realities

  1. 1. #CCS19 Delivering On The Promise Of BOPIS… And Other Omni Channel Realities SPONSORED BY:
  2. 2. #CCS19 Follow this event on LinkedIn & Twitter #CCS19 Retail Touchpoints: @RTouchPoints Adam Blair: @adamblair29 4R Systems: @4RSystems
  3. 3. #CCS19 About Retail TouchPoints  Launched in 2007  Over 45,000 retail subscribers  To provide executives with relevant, insightful content across a variety of digital medium Sign up for our weekly newsletter: www.retailtouchpoints.com/subscribe
  4. 4. #CCS19 Prize Pack: Register & Attend to Win Earn 1 automatic entry when you register and a second entry when you attend live. Register For & Attend #CCS19 Webinars For the Best Chance to Win! • Free Pass to #RIC19 in NYC May 6th-8th – 1 Winner Per Day • Apple AirPods – 1 Winner • $10 Starbucks Gift Cards – 1 Winner Per Session
  5. 5. #CCS19 Questions, Tweets & Resources Submit your questions here Download today’s resources Join the conversation #CCS19
  6. 6. #CCS19 Panelists MODERATOR: Adam Blair Editor Retail TouchPoints Antony Karabus CEO HRC Retail Advisory Kevin Stadler President & CEO 4R Systems
  7. 7. 4R Systems April 2, 2019 BOPIS –The Promise &The Pitfalls Buy On-line, Pick-Up In Store
  8. 8. Agenda Copyright © 2019 4R Systems 8 • The Promise of BOPIS • The Pitfalls of BOPIS • Demand Pools & Key Metrics • Integration of Balance & Risk • Solving for Risk
  9. 9. The Promise of BOPIS Copyright © 2019 4R Systems 9 Effective strategy against pure online offerings Increases customer satisfaction due to immediate availability Increases in store traffic Increase in margin (no shipping) Reduces “stranded’ inventory in store
  10. 10. HRC Advisory Survey says… Copyright © 2019 4R Systems 10 “…consumers expect ever faster delivery, pressuring retailers to meet those expectations…” Antony Karabus • HRC Retail Advisory Survey on Omni-Channel Inventory – Fall 2018 Interviewed executives from 30 retail chains • Intent was to assess how retailers’ omni-channel strategies are impacting customer experience and retailer profitability • Omni-Channel offerings like BOPIS must be offered to compete against e-commerce-only retailers. • 80% of participants offer their customers some level of omni-channel capabilities.
  11. 11. The Pitfalls of BOPIS Copyright © 2019 4R Systems 11 • Failure to fulfill alienates the customer; i.e. risk is higher than just an out-of- stock • Incorrect forecasting and inventory can increase carrying costs • Localized online demand signals interfere with store demand in forecasting • Localized fulfillment increases variation in inventory/store order point churn meaning a more agile supply chain may be needed Increases the need for an agile supply chain
  12. 12. Retailer Experience with Omni-Chanel: Copyright © 2019 4R Systems 12 “…issues create frustrating customer experiences, including that an item is available… then learn at the store is not…” Jim Schwender • 100% are experiencing operational and execution challenges • More than 80% disappoint customers and increase costs • Shipping Inefficiencies are sharply increasing costs • 80% are not effectively allocating inventory to store-level local demand • Only 14% are using predictive analytics and most struggling to integrate into operational practices.
  13. 13. Demand Pools & Key Metrics Copyright © 2019 4R Systems 13 Store Demand BOPIS Demand • Store Demand & BOPIS (localized online demand) Interact • Can either be cannibalistic or have halo effects on each other. • BOPIS Demand – Risk is Higher and should be protected. • Has higher long term customer value
  14. 14. Demand Pools & Key Metrics Copyright © 2019 4R Systems 14 Store Demand BOPIS Demand • Store Demand & BOPIS (localized online demand) Interact • Can either be cannibalistic or have halo effects on each other. • BOPIS Demand – Risk is Higher and should be protected. • Has higher long term customer value The two demand streams need to be integrated & risk factors taken in to effect Legacy forecasting & target service level solutions can cause inaccuracy & increased risk & increased supply chain costs Integration
  15. 15. Demand Streams & Fulfillment – An Illustration Copyright © 2019 4R Systems 15 Store Demand BOPIS Demand • Store Demand & BOPIS (localized online demand) Interact • Can either be cannibalistic or have halo effects on each other. • BOPIS Demand – Risk is Higher and should be protected. • Has higher long-term customer value
  16. 16. Integrated Demand & Risk Model (Profit Maximization) Copyright © 2019 4R Systems 16 Efficient Frontier Profit maximization is at the core of all 4R solution and is based on the investment theory from the “Markowitz Efficient Frontier Model” which is applied to the Retailer’s inventory
  17. 17. Integrated Demand & Risk Model (Profit Maximization) Copyright © 2019 4R Systems 17 Efficient Frontier Profit maximization is at the core of all 4R solution and is based on the investment theory from the “Markowitz Efficient Frontier Model” which is applied to the Retailer’s inventory
  18. 18. Integrated Demand & Risk Model (Profit Maximization) Copyright © 2019 4R Systems 18 Efficient Frontier Profit maximization is at the core of all 4R solution and is based on the investment theory from the “Markowitz Efficient Frontier Model” which is applied to the Retailer’s inventory Profit Curve reveals highest margin/least risk optimal answer.
  19. 19. Benefits of Integrated Demand & Risk Model Copyright © 2019 4R Systems 19 Integrated Optimization Model • BOPIS – Risk Pooling • Lower Inventory Costs • Efficient Frontier Shifts • BOPIS allows for risk pooling – • 1. Keeping more inventory at a small number of central locations (warehouses) until demand materializes. • 2. Fulfill “surgically” in store with certainty, instead of fragmenting across brick & mortar stores in anticipation of uncertain demand. • Risk pooling drives lower inventory costs across the supply chain, with gained efficiency • Efficient Frontier shifts toward improved margin values for same amount of inventory injected in the supply chain; or, • Efficient Frontier shifts to the left (lower inventory overall) while improving the in-stock position at the store level.
  20. 20. Recommendations: Copyright © 2019 4R Systems 20 Retailers must now offer omni-channel services as a standard to compete.” • Carefully Define Role of the Store In Omni-Channel • Integrate inventory across channels. • Use predictive analytic techniques to integrate demand signals • Assess inventory inaccuracy and put in place improvements to ensure customers are not disappointed • Develop Success Metrics and Omni-Channel Scorecard
  21. 21. Solving for Risk Copyright © 2019 4R Systems 21 • Increase Customer Satisfaction • Increase Margins • Decrease Supply Chain Costs Overall • Decrease Overstock Risk
  22. 22. 4R Systems BOPIS –The Promise &The Pitfalls Buy On-line, Pick-Up In Store
  23. 23. #CCS19 Q&A // Panelists MODERATOR: Adam Blair Editor Retail TouchPoints Antony Karabus CEO HRC Retail Advisory Kevin Stadler President & CEO 4R Systems
  24. 24. #CCS19
  25. 25. #CCS19 Thanks for attending Catch up on all of the #CCS19 series here: http://webinars.retailtouchpoints.com/connected-consumer-series/2019/

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