More and more retailers extend their business into the wonderful realm of eCommerce to offer their goods online. Buying online has been on the rise for a few years now. However there are still a lot of customers that want to explore online, and buy offline, so sometimes it’s all about clicks and bricks.
A logistics company’s job doesn’t necessarily end when a shipment of designer t-shirts are delivered to an outlet. Taking stock of customer inventory needs in real time, a task that was impossible 10 years ago, is a top priority today.
What’s fueling this? New retail strategies designed to accommodate fickle, particular consumers. One approach involves the implementation of in-store pickup, which allows people to search for and purchase items online and then collect those purchases in person at a physical location at a later date.
How do logistics operations factor into the equation? To execute this plan effectively, brick-and-mortar stores require:
- A comprehensive view of inventory needs by season
- A third-party logistics provider (3PL) possessing applicable assets
- The ability to operate like warehouses to satisfy diverse product preferences
- Knowledge of which items customers are most likely to purchase online
The retailer’s case: Why in-store pickup?
In the e-commerce era, some consumers have difficulty supporting brick-and-mortar stores. For many, the logical step is to develop an omnichannel experience in which customers can interact with physical and digital outlets interchangeably. According to Bidness Etc, Sears Holdings Group has adopted in-store pickup to revitalize its operations.
The news source noted that, to boost profitability, the retailer has:
- Sold a number of its stores
- Dispossessed assets that weren’t feasible to sustain
- Separated businesses such as Lands’ End
To further bolster its retail operations, the corporation implemented a “Show Your Way” membership program, which allows select customers to purchase goods online and then pick them up at certain locations at their convenience. About 2,000 Kmart and Sears outlets cater to such needs.
The move was partly inspired by Sears Holdings Executive Vice President Imran Jooma, who noted:
- 60 percent of consumers want a more comprehensive shopping experience
- Omnichannel purchases increased 26 percent in Q2 2014 as a result of the program
We also notice Rabbit Air, Guardian Technologies or Austin Air are the best examples of allowing in-store pick up for their best air purifier for pets.
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The need for data synchronization
How could an in-store pickup endeavor work against a business?
Say a person searches for a pair of sneakers online and sees that a store located nearby has the exact pair the individual wants. After purchasing the shoes online and traveling to the brick-and-mortar outlet, the shopper learns the item is out of stock.
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What went wrong? The inventory fulfillment strategy wasn’t integrated with the e-commerce site, displaying false information. Apparel noted that possessing real-time inventory visibility is imperative for the modern merchant. The assets needed to make this transparency a reality are as follows:
- A software program that’s easily compatible with 3PL technology
- Radio-frequency identification tags that not only tell retailers what type of items are in stock but also which products in that contingency were sold
These two implementations are also essential to formulating demand forecasting, which in turn enables 3PLs to anticipate fluctuations in consumer preferences and needs. For example, possessing adequate stock of in-season clothing shouldn’t be a challenge with such a system in place. In addition, insight into which products customers living in a certain area will likely favor in the next week or month can be provided.
Organizing inventory this way will eliminate mistakes on the customer’s end of the bargain. Although logistics should be organized to ensure the availability of popular items, synchronizing RFID data with e-commerce websites will show people whether a certain commodity is no longer in stock.
Brick-and-mortar as secondary distribution centers
The image of a conventional warehouse typically appears to be an expansive facility with every item a 3PL customer sells categorized. For economic reasons, it isn’t feasible for merchants to reconstruct brick-and-mortar stores to fit this appearance. Having excessive inventory is counterintuitive to achieving product liquidation.
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Therefore, outlets supporting pickup in-store strategies must have the appropriate products on hand. Stock should be assembled based on regional preferences.
Take Sears’ inventory needs into account. A store located in a rural area will likely need to carry farming equipment and know when such items will need to be provided during the season. Seeders should be posted on sale in March, or even as early as February, for farmers looking to get a leg up on their crops. In contrast, a facility catering to those in a metropolis may want to keep a modest stock of hand-push lawnmowers for the few residents who have yards.