Omni-Channel Retailers Require Strategic Allocations

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Today’s customers have embraced omni-channel shopping and move seamlessly between channels to get what they want, when they want it and at a price they are willing to pay. Couple this with today’s many fulfillment options and customers’ expectations for rapid delivery and you can quickly see how challenging it’s become for retailers to satisfy customer demand while minimizing inventory investment and maximizing margins.

The nature of today’s retail marketplace requires retailers to be nimble and flexible dictating that they take a close look at the processes and systems that move and manage their inventory in order to support new fulfilment strategies such as “ship from store” and “click and collect”. And while there are many factors to consider in supporting this “flexible consumer” environment, the placement and movement of inventory is one of the most important investment areas.

Allocation planning is the primary business process for distributing and positioning inventory, and the complexity created by moving to an omni-channel model is challenging many current allocation solutions. When evaluating a new advanced allocation solution here are some things retailers need to consider.

  • Capture sales attribution by sales channel. The attribution of sales is a key component in driving optimal stock distribution across the supply chain. The allocation system needs to consider not only where a sale was made, but where the demand was fulfilled from in order to suggest the optimal allocation of future stock.

  • Customer and location allocation strategies. Focusing on the customer has become an extremely important addition to the traditional product and location focused allocation strategies. Through non-hierarchical attribution, flexible allocation solutions are able to model trends and demand to maximize sales potential through accurate allocation of stock.

  • Anticipate demand. Retailers can no longer just push out inventory and monitor demand. Today’s market requires insight into near-future demand to drive store allocations. Consuming information about anticipated demand supports projecting orders to stores in the future and supports and accelerates managing goods through the supply chain in an optimal way.

  • Flexible supply chain configuration. Traditionally supply chains were very linear and fairly straightforward to setup. But today, they must be nimble with inventory able to move forward, backward and sideways to be properly positioned. Configuring modern supply chains requires support for complex rules within the allocation system.

  • Pre-allocate inventory and cross dock. Inventory needs to flow through the supply chain faster. Retailers can no longer wait for inventory to arrive at D.C.’s before decisions are made to disperse it to stores. They need the capability within their allocation system to pre-allocate inventory from P.O.’s in order to reduce lead time. Utilization of cross docking and pre-packs are additional techniques required to handle supply chain time compression.

  • Real-time, accurate inventory visibility from P.O. to D.C. to channels. Moving from channel-specific inventory to shared inventory across channels enables retailers to react to variability in where demand occurs. Effectively fulfilling on variable demand requires having complete visibility into inventory at every level of the supply chain.

  • Inventory sourcing and prioritization. Allocation solutions should support options to source inventory from multiple points within the supply chain in order to reduce lead times to satisfy customer demand across selling channels. Inventory can be sourced direct from suppliers, from in-bound P.O.’s, from D.C. stock and from store stock.

  • Integration to assortment plan. The integration of the allocation solution to an assortment plan is integral to producing an allocation result that represents the merchandise story in stores and ensures the correct color and sizing choices are available to the customer. The integration of these two solutions also ensures a seamless cut over between planning and execution of an assortment.

JustEnough’s new Strategic Allocation solution has been designed to help retailers plan for and succeed in this dynamic, highly competitive environment. Our solution addresses all of the above allocation and supply chain complexities with flexibility and ease. To learn more about how JustEnough can help your business gain the benefits of strategic allocation, contact us at info@justenough.com.