The document discusses how the fashion industry is adapting to meet the demands of omni-channel retail and empowered consumers. It introduces the concept of "omninomics" - how the fashion value chain has evolved into an interconnected network to collaborate and provide seamless shopping experiences across channels. It provides examples of how companies like Bonobos are personalizing experiences through both physical stores and digital channels to better understand customers, create improved products, and drive higher online conversions. The key is for all partners across the value chain to work together using shared data to quickly get the right products to consumers through their preferred channels.
Converging the customer experience across channels has never been more important. In fact, in a recent Retail Systems Research (RSR) study, more retailers report that they operate online/e-Commerce channels (92%) compared to traditional stores (89%). And, 100% of retailers surveyed consider “a single brand identity across channels” as important.
In order to move forward on the road toward a successful omnichannel experience, retailers need to take a step back and consider their current strategies, as well as hardware and software capabilities.
In this upcoming webinar, Nikki Baird from RSR will share insights from the June 2012 survey titled: Omni-Channel 2012: Cross-Channel Comes Of Age. Some of the topics she will cover include:
The new rules of cross-channel retail
The value of cross-channel shoppers
The Digital-Physical connection
The role of Marketing in the strategy mix
NCR will join the discussion by outlining the steps toward cross-channel success, illuminated through real-world case studies. Once merchants commit to a compelling and consistent cross-channel experience, they must follow through with superior data analysis and promotion optimization, facilitated with best-in-class point of sale (POS) solutions. With all the proper components in place, retailers will improve loyalty and profits by delighting customers, no matter which channel they choose.
Online to offline (O2O) is a business strategy that attracts potential customers from online channels to make purchases offline in physical stores.
O2O commerce companies are employing various techniques to attract the potential customers from online into the store.
O2O commerce with proper strategy can make the purchasing at mall much more convenient and personalized that optimize customer experience and make them feel it’s so enjoyable to buy something.
The retail industry has shifted into this new concept of Online to Offline (O2O) in which online and offline channels share the same importance in achieving success.
It’s obvious that O2O business is now one of the most popular strategies throughout the retail industry and no one wants to be the outsider of this race.
The future lies in a convergence between online and offline sales.
Omni-channel Retail - Bridging the Digital and Brick & Mortar DivideAdrian Teo
Ok, so you have a website, facebook page, even mobile apps, but how is that helping you to engage your consumers when you need it most… when they are at your outlets!
I mean how do you drive footfall and sales from digital to your brick & mortar channels? How do you identify your consumers, personalized that engagement and get them to buy before they step out?
And we don’t mean spamming everyone with the same promotion at that outlet, but personalized according to their profiles, transaction history and location. Better yet, it’s all automated, you really don’t want to be pouring through and interpreting heaps of customer data.
In this presentation, I share the challenges faced by retailers, shop owners, F&B and mall operators in bridging the digital and brick & mortar divide. While each solution is unique to your retail business, vertical or consumer behaviours, it is about breaking down the silos that exist in your consumer touch points, enterprise solutions, best practices and how TAO OF SHOP can help you to bring it all together.
Digital Strategy For Retail: Omnichannel (The Hive Think Tank)iVentures Consulting
DIGITAL STRATEGY FOR RETAIL: OMNICHANNEL
The Hive Think Tank on May 7th, 2014 at General Assembly in San Francisco with Christophe Biget (iVentures Consulting, co-CEO), Tyler Kohn (RichRelevance, CTO), Kerem Tomak (Macy's, VP, Marketing Analytics and CRM) and Greg Tanaka (Bay Sensors, CEO)
More information about eShopper Index:
- Overall ranking: http://www.slideshare.net/aureliaa/2014-eshopper-index-overall-ranking
- Presentation & subscription: http://www.iventures-consulting.com/eshopper-index
Creating an Omnichannel Supply Chain for BrandsMichael Hu
Branded manufacturers can take advantage of the unprecedented omnichannel opportunity to get closer to the consumer, if they manage to acquire the requisite fulfilment and supply chain capabilities. European Business Review
This presentation provides a comprehensive overview of the current retail industry. It begins with a look into the four primary types of retailers: department stores, specialty retailers, big box retailers and discount retailers. From there, the deck explores the topic of overall channel expansion, which leads into a discussion on two omni-channel trends for 2013. The presentation wraps up with a discussion on technology companies that are partnering with retailers and a summary of opportunities for retail companies.
Converging the customer experience across channels has never been more important. In fact, in a recent Retail Systems Research (RSR) study, more retailers report that they operate online/e-Commerce channels (92%) compared to traditional stores (89%). And, 100% of retailers surveyed consider “a single brand identity across channels” as important.
In order to move forward on the road toward a successful omnichannel experience, retailers need to take a step back and consider their current strategies, as well as hardware and software capabilities.
In this upcoming webinar, Nikki Baird from RSR will share insights from the June 2012 survey titled: Omni-Channel 2012: Cross-Channel Comes Of Age. Some of the topics she will cover include:
The new rules of cross-channel retail
The value of cross-channel shoppers
The Digital-Physical connection
The role of Marketing in the strategy mix
NCR will join the discussion by outlining the steps toward cross-channel success, illuminated through real-world case studies. Once merchants commit to a compelling and consistent cross-channel experience, they must follow through with superior data analysis and promotion optimization, facilitated with best-in-class point of sale (POS) solutions. With all the proper components in place, retailers will improve loyalty and profits by delighting customers, no matter which channel they choose.
Online to offline (O2O) is a business strategy that attracts potential customers from online channels to make purchases offline in physical stores.
O2O commerce companies are employing various techniques to attract the potential customers from online into the store.
O2O commerce with proper strategy can make the purchasing at mall much more convenient and personalized that optimize customer experience and make them feel it’s so enjoyable to buy something.
The retail industry has shifted into this new concept of Online to Offline (O2O) in which online and offline channels share the same importance in achieving success.
It’s obvious that O2O business is now one of the most popular strategies throughout the retail industry and no one wants to be the outsider of this race.
The future lies in a convergence between online and offline sales.
Omni-channel Retail - Bridging the Digital and Brick & Mortar DivideAdrian Teo
Ok, so you have a website, facebook page, even mobile apps, but how is that helping you to engage your consumers when you need it most… when they are at your outlets!
I mean how do you drive footfall and sales from digital to your brick & mortar channels? How do you identify your consumers, personalized that engagement and get them to buy before they step out?
And we don’t mean spamming everyone with the same promotion at that outlet, but personalized according to their profiles, transaction history and location. Better yet, it’s all automated, you really don’t want to be pouring through and interpreting heaps of customer data.
In this presentation, I share the challenges faced by retailers, shop owners, F&B and mall operators in bridging the digital and brick & mortar divide. While each solution is unique to your retail business, vertical or consumer behaviours, it is about breaking down the silos that exist in your consumer touch points, enterprise solutions, best practices and how TAO OF SHOP can help you to bring it all together.
Digital Strategy For Retail: Omnichannel (The Hive Think Tank)iVentures Consulting
DIGITAL STRATEGY FOR RETAIL: OMNICHANNEL
The Hive Think Tank on May 7th, 2014 at General Assembly in San Francisco with Christophe Biget (iVentures Consulting, co-CEO), Tyler Kohn (RichRelevance, CTO), Kerem Tomak (Macy's, VP, Marketing Analytics and CRM) and Greg Tanaka (Bay Sensors, CEO)
More information about eShopper Index:
- Overall ranking: http://www.slideshare.net/aureliaa/2014-eshopper-index-overall-ranking
- Presentation & subscription: http://www.iventures-consulting.com/eshopper-index
Creating an Omnichannel Supply Chain for BrandsMichael Hu
Branded manufacturers can take advantage of the unprecedented omnichannel opportunity to get closer to the consumer, if they manage to acquire the requisite fulfilment and supply chain capabilities. European Business Review
This presentation provides a comprehensive overview of the current retail industry. It begins with a look into the four primary types of retailers: department stores, specialty retailers, big box retailers and discount retailers. From there, the deck explores the topic of overall channel expansion, which leads into a discussion on two omni-channel trends for 2013. The presentation wraps up with a discussion on technology companies that are partnering with retailers and a summary of opportunities for retail companies.
this is a research from Google on the ROPO (Research Online, Purchase Offline) behavior and the need for web-to-store, mobile-to-store device in the Luxe category
As specialist advisers to the marketing communications and technologies industry, we are uniquely positioned to ensure that we are continually on top of key trends in this rapidly evolving landscape.
Decoding the Cross border eCommerce Puzzle - an Anchanto Document devin simon
In recent years, technology has enabled eCommerce retailers and manufacturers to reach customers across borders. However, there are various challenges that need to be tackled in order to flourish at cross-border trade. If you are thinking cross-border, few questions are natural to arise:
Will I benefit from cross-border eCommerce?
Would my products actually sell across borders?
How to overcome logistic challenges in cross-border eCommerce?
This white paper gives you in-depth insights into all of these and much more. Also, explore how technology is the solution to enhance and navigate endless possibilities through cross-border eCommerce.
Retailers need to understand how to target customers in the right way and customers need retailers to understand them and offer them something at value all the time. OmniChannel retailing is the ultimate solution for retailer to connect with their customers and provide them with outstanding customized experience.
Join our Social Learning Network:
http://www.openthinking.ae
Rise of Omni-commerce and Its Reflections on Supply Chain ManagementLA Software Group
The evolution of retail from a channels point of view can be examined in 4 different groups. These groups represent the variety of channels and also how channels are treated as a whole. These groups are Single Channel, Multi-Channel, Cross-Channel and Omni-Channel.
Remodista RetailSource Paper - Mobile Conversion MadnessRemodista
An Executive Snapshot on Improving Mobile Conversion Rates - Our interactive team of experts gathered collaborative research and analysis focused on improving mobile conversion rates with customers who are seeking transactional experience on their mobile device.
Omni-channel in Retail. Lessons for the automotive industryIgnitionOne
Gino Van Ossel, Professor Retail & Consumer Goods Center Vlerick Business School, presentation in omni-channel retail from the IgnitionOne European Automotive Summit, June 2014
Is Your Supply Chain Ready for Omnichannel Revolution Michael Hu
Online retail sales are expected to grow exponentially between now and 2025. Winning in this arena will require a supply chain that increases product availability with flexible delivery options at a lower cost.
Obstacles:
• Turning customer data into usable insights.
• Effort of implementing new technology.
• Integrating with other platforms.
• Integrating channels, e.g., ecommerce, in store, marketplaces
• Store issues: competition, margin compression, store capacity
TrustRobin...app health education....https://youtu.be/57ghR94SYXM
this is a research from Google on the ROPO (Research Online, Purchase Offline) behavior and the need for web-to-store, mobile-to-store device in the Luxe category
As specialist advisers to the marketing communications and technologies industry, we are uniquely positioned to ensure that we are continually on top of key trends in this rapidly evolving landscape.
Decoding the Cross border eCommerce Puzzle - an Anchanto Document devin simon
In recent years, technology has enabled eCommerce retailers and manufacturers to reach customers across borders. However, there are various challenges that need to be tackled in order to flourish at cross-border trade. If you are thinking cross-border, few questions are natural to arise:
Will I benefit from cross-border eCommerce?
Would my products actually sell across borders?
How to overcome logistic challenges in cross-border eCommerce?
This white paper gives you in-depth insights into all of these and much more. Also, explore how technology is the solution to enhance and navigate endless possibilities through cross-border eCommerce.
Retailers need to understand how to target customers in the right way and customers need retailers to understand them and offer them something at value all the time. OmniChannel retailing is the ultimate solution for retailer to connect with their customers and provide them with outstanding customized experience.
Join our Social Learning Network:
http://www.openthinking.ae
Rise of Omni-commerce and Its Reflections on Supply Chain ManagementLA Software Group
The evolution of retail from a channels point of view can be examined in 4 different groups. These groups represent the variety of channels and also how channels are treated as a whole. These groups are Single Channel, Multi-Channel, Cross-Channel and Omni-Channel.
Remodista RetailSource Paper - Mobile Conversion MadnessRemodista
An Executive Snapshot on Improving Mobile Conversion Rates - Our interactive team of experts gathered collaborative research and analysis focused on improving mobile conversion rates with customers who are seeking transactional experience on their mobile device.
Omni-channel in Retail. Lessons for the automotive industryIgnitionOne
Gino Van Ossel, Professor Retail & Consumer Goods Center Vlerick Business School, presentation in omni-channel retail from the IgnitionOne European Automotive Summit, June 2014
Is Your Supply Chain Ready for Omnichannel Revolution Michael Hu
Online retail sales are expected to grow exponentially between now and 2025. Winning in this arena will require a supply chain that increases product availability with flexible delivery options at a lower cost.
Obstacles:
• Turning customer data into usable insights.
• Effort of implementing new technology.
• Integrating with other platforms.
• Integrating channels, e.g., ecommerce, in store, marketplaces
• Store issues: competition, margin compression, store capacity
TrustRobin...app health education....https://youtu.be/57ghR94SYXM
Membincangkan mengenai konsep fana' dan baqa yang terdapat dalam istilah sufi (tasawuf), aspek-aspek, pandangan tokoh, menurut Al-Quran serta salah faham dari beberapa mazhab terhadap istilah sufi ini.
You have been sending emails out to your contact lists, donors and fundraisers but you still get a low conversion rate? You are not sure how to get your customers involved and increase your sales via email marketing?
Un sujet intéressant abordé lors de l'un de mes cours MOOC en stratégie. Le concours consiste en la rédaction d'un billet de 500-800 mots. Voici une version légèrement étoffée de mon opinion sur le thème: "Faut-il craindre la Russie?"
An interesting topic from one of my MOO courses on strategy(ies). We were asked to write down a short essay (500-800 words) to answer the following question: " Should we fear Russia?". Find enclosed my opinion about it.
Creating loyal omnichannel customers is critical. Retailers who embrace the customer-centric trend and build better shopping experiences will leap ahead of the competition.
Building a blended customer experience isn't easy. Need some help getting started? Check out our latest in retail trend research.
This report highlights the increasingly competitive nature
of the retail market, identifying changing consumer
behaviour as a key driver behind this. Consumers today
own much more ‘stuff’ than previous generations, making
it more difficult to persuade them to purchase additional
products. Consumers are also time-pressured, so convenience
and speed has taken priority.
All these factors, combined with supply side considerations - more intense focus on price, a deflationary retail environment and even greater choice - means retail growth will be much harder to achieve over the next ten years. For this reason, it is vital that retailers secure customer loyalty.
Understanding consumers’ behaviour, wants and needs is essential to build this loyalty. This isn’t just about knowing what customers want to buy, but truly understanding how and where they want to buy, their motivations and what they expect from their overall shopping experience.
This also means that retailers need to re-evaluate how to reach customers and reappraise traditional marketing techniques – many of which are still relevant, but are less impactful and influential in today’s environment. This deeper understanding will ultimately help retailers secure loyalty in the era of the unfaithful consumer.
2021 Omnichannel Guide: A Four-Pillar Approach to Holistic Commerce Successrun_frictionless
An omnichannel approach isn’t just another way of saying that you sell on multiple marketplaces. It’s about delivering a consistent brand experience that transcends specific channels to meet customers where they are and build a personal connection, as well as optimizing your business for the future through channel diversification and comprehensive integration of your data and systems.
https://runfrictionless.com/b2b-white-paper-service/
Informes PwC - Encuesta Total Retail GlobalPwC España
El informe "Hacia un modelo de Total Retail", elaborado por PwC, analiza las expectativas y hábitos de consumo del comprador online, a partir de 15.000 entrevistas a compradores digitales de todo el mundo, y las implicaciones para las compañías del sector de distribución y consumo en los próximos años.
Informe de PwC sobre las expectativas y hábitos de consumo del comprador onlineMaría Bretón Gallego
El informe Hacia un modelo de ‘Total Retail’, elaborado por PwC, analiza las expectativas y hábitos de consumo del comprador online, a partir de 15.000 entrevistas a compradores digitales de todo el mundo, y las implicaciones para las compañías del sector de distribución y consumo en los próximos años.
Internet y las nuevas tecnologías han multiplicado la influencia del consumidor, pero, ¿qué les están pidiendo a las marcas? Las nuevas expectativas y hábitos del consumidor digital tendrán importantes implicaciones para las compañías del sector en los próximos años
Consumers today are more ‘SoLoMo’ –Social, Local and Mobile. The article discusses about the key global trends and benchmark practices that would help retailers to build seamless consumer experience and long-term profitability in the near future (2020). Using Big-Data for predictive analytics, leveraging technology to create Omnichannel customer experience, implementing effective Supply-Chain, using prompt methods payments, enforcing efficient employee training and other success factors mentioned in the article, will definitely shape the future of a successful retailers to manage the complexity and diversity of retailing in 2020. All topics covered all supported with concrete examples of worldwide benchmark in the industry.
Similar to Omninomics Creating a more connected value chain (20)
1. Fashion
Omninomics—Creating
a more connected value chain
The fashion industry is undergoing the biggest change since the industrial revolution: Today’s consumers prize
instant convenience and authenticity. They want innovative new products, instantaneous information, to
comparison shop, easily return items that don’t fit, and always get the best deal.
You must be sure that your value chain is ready to meet the challenges of omni-channel retail. It’s likely that your
supply chain has evolved from a linear push into a global value chain network of different companies, sometimes
hundreds of companies, that are working together to innovate, to respond to orders, fulfill and deliver on customer
commitments, and react to disruptions in supply.
How can these companies collaborate to create a seamless experience for shoppers? How should omni-channel
customer insights fuel this network? This paper on “omninomics” will help you answer these questions.
2. 2Omninomics Industry Perspectives
3 What is omninomics?
4 Omninomics in action
4 How a new breed of consumers is
changing the value chain
6 How to create a more collaborative
value chain
10 Recommendations
12 Why the strength of your network
matters
Table of Contents
3. 3Omninomics Industry Perspectives
What is omninomics?
Omninomics refers to how omni-channel retail and the
fashion value chain have evolved in tandem to
become an interconnected network that includes
design, source, manufacture, distribute, and retail. This
concept is an extension of omni-channel shopping, a
multichannel sales approach where consumers can
experience a seamless shopping experience whether
they are in a brick-and-mortar store or using their
personal computers or mobile devices.1
Omni-channel retail sales are on the rise, making it
more important than ever to understand how your
industry is changing. Having doubled every 4 to 5
years since 2001, omni-channel sales are expected to
grow to become a $1.8 trillion market by 2016 and $7
trillion by 2025.2 Forrester defines these sales as
"transactions that are touched by any digital medium,
but not completed through the Internet."3 In addition,
they are the result of "preshopping," where consumers
research the products they want to buy, perhaps on a
mobile device or in a store, before making a purchase.
As omni-channel shopping brings consumers closer to
the value chain, fashion companies must move toward
new business models that are more collaborative,
consumer driven, responsive, and quick. Success
requires all value chain partners to work together to
get the right products to where consumers want them,
as quickly and efficiently as possible.
In this paper, we explore the concept of
omninomics—how your value chain collaborates to
get a product to a consumer in an ever-evolving
omni-channel market.
In previous papers on fashionomics and consumernomics,
we charted the first steps in this journey to omninomics:
■ In Freak’n Fashionomics—The new economics of
fashion, we explored how the fashion industry was the
economic driver in economies around the globe, from the
label maker to the button maker to the brand and retailer
who move and sell their products. We also looked at the
evolving economics of the industry.
■ In Consumernomics—The plan is there is no plan, we
delved into how the powerbase of the fashion industry
went from mass production, where the market was not a
constraint, to the retailer being the channel master, and
today’s world, where the consumer is in control, and
everyone along the value chain has to keep up.
4. 4Omninomics Industry Perspectives
Omninomics in action
The retailer used to be the end point of the value
chain—where the product met the consumer. Today,
new channels and online tools have given the
consumer the freedom to choose where they make
purchases from anywhere along the value chain and
using a myriad of new touch points. This presents a
host of new opportunities—and challenges—for
fashion companies.
For some, it could mean using the brick-and-mortar
store as a showroom where customers can discover
the styles and sizes that work best for them before
they make purchases online. A third-party logistics
provider could then fulfill the order using one of your
distribution centers or work directly from your
manufacturing plant—and drop ship. Or you could use
your online channels to drive customers to your stores
through loyalty programs, discounts, and other
promotions or offer them the opportunity to complete
their transaction online and choose home delivery or
one of a number of different pickup locations.
It all comes down to knowing what your customers
want and how to get it to them.
How a new breed of
consumers is changing
the value chain
There are roughly 80 million Millennials in the US,
spending approximately $600 billion each year. They
aren’t just teens—Millenials are young adults in their
20s and 30s.4 As Accenture notes, “Many have
careers, are raising kids and live in their own homes.
While Millennials are already a potent force, they will
truly come into their own by 2020, when we project
their spending in the United States will grow to $1.4
trillion annually and represent 30 percent of total
retail sales.”5
These Millennial “shoppers are now willing to interact
with retailers on a number of different social networks
in order to find information on deals, products and
contests,” observes Fashionbi.6 All it takes is a
computer and a subscription to Amazon™ Prime. But,
Millennials as a group are not as label-obsessed as
shoppers in the past. Millennials are often more
interested in the style than the brand—and will look for
a cheaper option elsewhere.7 And it’s not just
Millennials; all generations are adopting omni-channel.
So how can you stand out?
5. 5Omninomics Industry Perspectives
The consumer now has an endless number of options to research new products. With more digital channels opening up each year, consumers have all of the
information they need—anytime, anywhere, day or night.
Reach more consumers with
an omni-channel strategy
Today’s consumers can flip from one channel to the
next with unprecedented speed and ease, while
mobile computing makes them more connected than
ever before. Thanks to the digital nature of today’s
shopping channels, along with the rise in social media,
the fashion world now has access to a wealth of
customer data that can be captureed and acted
on—while also providing a positive experience.
All parties along the value chain need access to the
same information across every interaction touch point,
from browsing and shopping online or off; to making a
purchase at a retail outlet, web storefront, or vending
machine; to the delivery of goods. With an
omni-channel presence, fashion companies can
optimize the connection of demand to supply by
using customer data to inform their manufacturing
processes—and dramatically improve the speed of
delivery, demand planning, stock replenishment, and
price competitiveness.
The journey from product to consumer
• Purchase in store
• Click and collect in store
• Click and collect at drop-off point
• Home delivery
• Drop ship by supplier
• Retail outlets (own stores,
outlets, store in store,
franchise, pop-up store)
• Web storefronts
• Mobile devices
• Kiosks
• Wholesale
• Vending machines
• Vendor managed inventory
(VMI)
DELIVERY
PURCHASE
• Social media
• In-store
• Catalogues
• Internet search
BROWSE OR SHOP
6. 6Omninomics Industry Perspectives
How to create a more
collaborative value chain
In today’s digital age, information can travel quickly
around the world. Creating and moving your
merchandise in this environment, however, means
dealing with shrinking lead times and extra effort to
compensate for the complexity and speed necessary
to stay ahead of today’s evolving needs. Here’s what
you can do to keep up:
Personalize your experiences
to create better products
Shoppers are increasingly willing to walk away from
the store without the instant gratification of making a
purchase because they know they have greater
choice than ever before. But, if they’ve experienced
what the brand has to offer, while also gaining
information on sizing, styles, fit, and look—the
opportunity has not been wasted. With this
information, they can make their purchase online and
continue to do so whenever they need a new pair of
trousers. That’s the model the eCommerce men’s
retailer Bonobos® has built its brand on.
Bonobos began with a simple premise: Off-the-rack
men’s trousers should still fit like they were custom
made. The costs associated with running a retail store
were going to be too high for a startup brand to
produce such a high-quality product consistently,
however. The answer was to go digital. By launching
as an eCommerce company, Bonobos could focus on
creating a high-quality product and brand, while
building up a solid customer base.
In the next step, Bonobos opened up what it calls
“guideship” stores to attract new customers. At its
brick-and-mortar locations, shoppers get one-on-one
personalized service, the ability to try-on new styles to
find the perfect fit, and a showroom to browse and
explore. What they don’t get, however, is the ability to
make a purchase. Bonobos’ stores are almost entirely
inventory free.8
For Bonobos, not having to supply the store with lots
of merchandise has reduced its inventory costs and
sidesteps the problems of inventory allocation. This
frees up more money for what truly matters to a
Bonobos customer—getting the best designed, best
sourced, and best fitting pants possible. Bonobos’
superior marketing strategy frees the company up to
focus on creating a better product. And, when
shoppers know exactly what they want, the chances
of returns from online purchases are lower. The
conversions are also higher, because the shopper is
completely informed and ready to make a purchase.
No matter how you slice it, the challenges of
inventory allocation are largely the same in the
omni-channel
environment.
7. 7Omninomics Industry Perspectives
Improve inventory
allocation by learning why
items are returned
Shifting inventory from one channel to other is a
complex challenge to manage efficiently. The
shoppers are there, and you need to be able to match
your inventory to their demands. "Omni-channel
shoppers exhibit a tendency to shop more frequently
and spend almost 3.5 times more than regular
shoppers. In-store conversion rate amid multichannel
options is four times higher than online-only
conversion rates. If the in-store pick up option is
available for online orders, retailers can realize 7%
higher net sales," observes Forbes.9 That's good
news. But because of the high logistics and returns
costs, online is by nature a low-margin business.
Why do people return goods? For retailers like
Zappos®, it's because shoppers are encouraged to
buy a pair of boots in two different sizes and return the
pair that doesn't fit. Returns are a part of Zappos’
business model. For the convenience of shopping
online, Zappos must factor in the inconvenience of not
being able to try on an item before it’s purchased.
Returns still need to be mitigated, however. That’s why
Zappos offers extensive information on its site about
sizing, including charts and information shoppers can
use as they're still researching a purchase. Videos
also help to show off the look and feel of a pair of
boots. However, sending out more than one sizes
increases the chances of retaining a sale.
When it comes to returns, you must factor in the
expenses related to storage, packaging, and the
delivery of online orders, as well as the sales mix.
Online often accounts for weaker margins compared
to brick-and-mortar. Are there products that should be
sent directly from the supplier? Do you use a
third-party logistics company for deliveries? Or, do you
rely on an OEM manufacturer that not only operates
with vendor-managed inventory (VMI), but can take
the product to the consumer's door? Do you need to
factor in different prices for different delivery times?
No matter how you slice it, the old challenges of
inventory allocation remain largely the same in the
omni-channel environment. What’s changed is how
demand for eCommerce orders can be less
predictable than in physical retail or wholesale stores.
When facing increased eCommerce or omni-channel
inventory demands, companies must also decide what
channel takes the highest priority for fulfillment. And
where do you hold merchandise inventory? What if
shipping an eCommerce order means limiting the
supply that a retail store has? Between the costs
associated with leasing or renting a space, staffing,
and other costs, retail stores are much more
expensive to maintain. But that doesn't necessarily
mean they have the strongest demand for certain
styles or the lowest margins.
8. 8Omninomics Industry Perspectives
The value chain is not a chain—it's a network. And a more collaborative network between the brand, suppliers, manufacturers, and retailers can give today's
fashion companies the flexibility they need to thrive in an omni-channel information environment.
Tap into your inventory
all along the value chain
The value chain needs to be closer to the consumer,
so you can make and ship your products to and from
anywhere. Are your consumers using their retail
locations as showrooms?
Do they want to purchase online and pick up an item
from a locker? Who delivers to the location where the
consumer physically takes ownership? How can you
make this experience seamless for consumers?
By creating a more collaborative value chain network
that uses the information you gain from the
omni-channel and information technology, you can
anticipate the desires of today’s shoppers and make
more cost-effective decisions about trends, demand,
and your inventory.
Create a more collaborative value chain network
RETAILER
MANUFACTURER
SUPPLIERS
3PL
RETAILER
SUPPLIERS
SUPPLIERS
BRAND
SUPPLIERS
Value Chain Network
Global Commerce Network | GT Nexus
9. 9Omninomics Industry Perspectives
When creating this value chain network you need to
be asking questions like: What does the consumer
want? Does the consumer still want to shop? Yes. Do
they still want to go and see the product in stores?
Yes, but for many, the store has become a showroom
and one of many potential purchase points rather than
the place where all sales transactions are executed.
To help match inventory supply with demand in the
omni-channel environment, third-party logistics
providers and information technology can help fashion
companies to create common inventory systems
across all of the channels that they must monitor.
“A common, not siloed, system, such as an ERP,
determines from which channel to pull orders based
on the delivery ZIP codes or the option the customers
choose (store pickup, direct-to-consumer home
delivery). With this visibility, retailers can better
understand inventory locations and fulfillment times,
leading to lower inventory carrying costs and faster
deliveries,” observes RIS.10 With the right visibility into
your inventory, you could even sell products as
they’re on ocean liners in transit.
In omninomics, the consumer determines what you’re doing, not the other way
around. By listening to the consumer—getting closer to them—you can
create better strategies for
meeting consumer needs.
10. 10Omninomics Industry Perspectives
Recommendations
The value chain is the foundation of omninomics. Its
creation and execution drive the performance of your
design, sourcing, manufacturing, manufacturing,
inventory allocation, warehousing and distribution
operations. To meet the needs of Millennials and
other generations of shoppers, you should:
1. Collaborate in real-time with your value
chain—Connected global commerce across your
value chain network is the real key to success. You
can always find a cheaper solution to meet your
needs, but the lowest cost supplier is likely to be the
slowest as well. Not only does geographic distance
add lead-time, but manufacturing centers in low-cost
countries often compensate for low margins with full
capacity utilization. That’s risky behavior. Instead,
source your components where they can be created
best—at the best cost and with flexibility and reliability.
Collaborate with your value chain to bring these
components together for assembly in a place close to
your markets. Gaining 90 days advance knowledge of
what the customer wants is worth the air freight, if
you’re selling out in minutes—especially if you’re
actually getting your products into customers’ hands,
not just to the distribution center or retailer. Look for
suppliers that are willing to be connected into your
network. Inventory visibility and timely information are
key to meeting demand and satisfying consumers.
2. Treat your inventory as one single body to match
merchandise to demand—To supply all of the right
channels, you must look beyond the traditional
notions of fulfillment. Make to stock or make to
forecast aren’t going to cut it when consumers want
so much more. To make your inventory flexible, you
need to factor in your fulfillment rates, service levels,
air freight costs, and more.
All parties along your value chain need access to the
same information across all of your interaction touch
points, from print catalog, to web, to order entry
screen, to manufacturing and distribution center—and
even social media. Capturing and analyzing high
volumes of data in near real-time is vital. With an
omni-channel presence, you can optimize the
connection of demand to supply by using customer
data to inform your manufacturing processes. This
pipeline data can offer up-to-the-minute inventory
accuracy—and dramatically improve your speed of
delivery, demand planning, stock replenishment, and
price competitiveness.
11. 11Omninomics Industry Perspectives
3. Get closer to the consumer, so you can see what
they see and react how they want you to react—In
omninomics, the consumer determines what you’re
doing, not the other way around. By listening to the
consumer—getting closer to them—you can create
better strategies for meeting their needs. Just as
Zappos knows there’s no one-size-fits-all approach to
retailing shoes, there is no one approach to building
an omni-channel business strategy. If you’re truly
engaging with your customers, you can use this data
to inform your operations.
One strategy is to start with common items for the line:
fabrics and trim elements. Design a style around them
and put it out there. Your customers can lead you to
better designs. With the technology to capture and
analyze social media feedback and a flexible value
chain, you can adjust your manufacturing processes in
real-time to satisfy new demands—and get closer to
the consumer.
Another strategy is to utilize 3D design and sampling
technologies to ensure the proper fit of a garment.
You can shorten the time to the consumer, reduce the
number of physical samples, and save on your costs.
4. Use Big Data to help you create the next new
thing your customers are after—Sometimes all it
takes is a change of color, fabric, or trim to catch a
trend or extend the run of a flagging style. How can
you know? The operational data you need to is likely
already there, but perhaps you aren’t using it as well
as you could.
To fix this, create a central data repository for your
entire organization. Track, collect, and analyze the
data generated between your design teams, among
product developers and sourcing managers, suppliers
and buyers. You should also create a growing library
of reusable designs, together with the specifications,
BOMs, sourcing, costing, and construction details to
minimize the lead time for introducing variations on a
style or bringing an extra contractor up to speed when
you need added capacity.
A collaborative value chain, informed by omni-channel data, can help you anticipate
the desires of today's shoppers and make more cost-effective decisions about
trends, demand, and inventory.