Riding the Omni Channel Wave – Part I

Andrew Grove, former CEO of Intel Corporation, in his book ‘Only the Paranoid Survive’, explains how Intel survived the changes in the computer industry. He talks about a specific term known as ‘Strategic Inflection Point’.

Inflection Point is, mathematically when the slope of a curve changes in either a positive or negative direction.

In his own words, “Strategic inflection points are about fundamental change in any business, technological or not”. It is a massive and swift change that disrupts the existing business environment. Companies that successfully manage this change, emerge as winners and those who don’t become obsolete.

The retail industry is facing such a ‘Strategic Inflection Point’ today – Omni Channel.

In today’s market, consumers buy from brick and mortar stores, desktops, mobile phones or other channels. Irrespective of the channel, the fundamental need of the customer is fulfillment. Today’s consumer expects immediate gratification. That is the reason why online giants are going for ‘same day delivery’.

In such a scenario, will the retailer be able to tell the consumer whether the product is available irrespective of the channel? If it’s not available, then when will the stock be replenished? Is the same item available in a nearby store? Is it in transit? Can the item be offered at a price that is profitable yet attractive to the consumer?

If the answer to the above questions was available and shared with the consumer by the store associate, the store would not lose the sale. However, retailers are unable to answer such questions reliably and emphatically.

The Challenge – Islands of Fulfillment

In brick and mortar plus an Ecommerce set up, the demand is generated from digital touch points like web, mobile, tablets, kiosk or from traditional touch points like stores or a call center. The supplies are sourced from stores, distribution center, drop-ship network or Third-party Logistics (3PL).

Before the item reaches the consumer, it has to be shipped by ground, air or water from the manufacturer to the distribution center, and to the stores. At times it is drop-shipped or a 3PL is involved.

The above points in the supply chain are managed by Procurement Management System, Transport Management System, Warehouse Management System, Store Replenishment System, Parcel Tracking System, etc. There are other points like Call Center Management System, POS System etc.

All these systems are Islands of Fulfillment. They do not talk to each other. 

Powering the Omni Channel – Magento-eBay Enterprise’s Retail Management Solution

Today’s order management systems have risen up to the challenge of handling orders from the point of purchase through the supply chain to the point of fulfillment.

According to a study by Forrester (2014 , Q3) , eBay Enterprise has been identified as one of the nine significant contributors of software to the Omni Channel Order Management Vendors along with IBM, Manhattan Associates and Hybris.

eBay Enterprise, which also owns Magento, is a leading global provider of Omni Channel solutions, including Ecommerce technologies, order management, retail operations and marketing services.

Magento and eBay Enterprise’s Retail Order Management Solution uses the existing gateways in Magento Enterprise to provide a powerful, modular and robust Omni Channel and Marketing Solution. The solution also eliminates the need for Magento customers to re-architect their existing implementations.

Retail Order Management Solution provides a Distributed Order Management (DOM), Omni Channel Inventory Management, Store Based Fulfillment, Drop Ship Management, and Customer Service Tools which enables to overcome the challenges in the Omni Channel space. We would provide a detailed analysis of these solutions in the next article.

Keep watching this space.

References