by Suhas Sreedhar, GT Nexus
This year, National Retail Federation's (NRF) Big Show touched on a lot of big themes: omni-channel strategy, using big data analytics to understand shoppers, the volatile habits of millennials, and others. But there were topics, equally big, that didn't get much mention.
Here are three that you should care about:
1. How to Actually Fulfill on Omni-channel
Omni-channel was still the hot topic at this year's event. Many companies highlighted the need to provide seamless mobile and e-commerce shopping experiences for customers while integrating fully with brick-and-mortar stores, but only a few actually mentioned what it takes to execute on that omni-channel vision.
The realization is that without a supply chain and inventory execution engine that's able to deal with multiple channels and enable services like shipping from store-to-store, direct-to-store, factory-to-consumer, and reverse logistics (returns), omni-channel remains just a dream.
One speaker who did emphasize the back end was Paul Coby, IT Director for John Lewis, a leading upscale department store chain in the UK. "To succeed in omni-channel, you need excellence in both front and back office," Coby emphasized. For John Lewis this past holiday season was "a logistics Christmas," as the company invested heavily in its distribution network.
Also highlighting fulfillment was Kacey Sharrett, Vice President, Omni-channel, for Toys "R" Us, Inc. The holiday strategy for Toys "R" Us wasn't to play up discounts or sales; it was to make sure they had items in stock because their shoppers rely on them for last-minute gifts. Shipping directly from their 800 stores allowed Toys "R" Us to deliver goods to customers reliably and on-time.
2. How to Make Use of Customer Feedback
It seemed like nearly everybody was on the big data bandwagon this year. Analytics were touted as the key to understanding customer behavior. By integrating online shopping data with social media and in-store Internet of Things (IoT) technologies like iBeacons, retailers talked about how they could gain detailed insight into shopping habits and trends.
But what about customer feedback? Engaging with consumers is something that several companies do well and use to differentiate themselves. The nature of retail business is evolving to the point where customer engagement is paramount. Small apparel companies like Gustin are going so far as to develop their products entirely based on crowdsourcing, but dialogues at the Big Show didn't deal with innovations on customer engagement.1
Mike Debnar, Founder and CEO at Red Regatta, however, did stand out for mentioning the importance of customer feedback. Debnar praised Starbucks for crowdsourcing 80% of innovation from associates and customers. "When customer complaints are answered, you build greater loyalty," he said. "In fact, you're better off apologizing and responding to a customer when there's an issue than to have never had a problem in the first place."
3. Ways to Embrace Unpredictability
Big Show sessions and technology vendors attending the conference tried very hard to be reassuring. They put their energy toward trying to outthink, out-predict, and out-maneuver market forces that have been voraciously eating away at margins for the past decade.
The fact is that consumer demand is highly volatile. Millennials – the key target demographic for retail – are known to value authenticity in their buying experience, yet at the same time are savvy shoppers who can wield technology to slurp up the best deals anywhere.
Big data analytics and social media marketing were mentioned as ways to combat unpredictability and drive customer behavior, but what about the idea that you can embrace unpredictability and factor it into your operations? Could you improve your in-store and upstream visibility to respond quickly to new, unanticipated situations?
Macy's, another standout at the event, spoke about doing just that. According to Peter Longo, President of Logistics & Operations at Macy's, 20% of Macy's inventory was tied up in single unit SKU's. Locating these items proved difficult in stores and, inherently, items of that sort tend to get lost. Macy's embraced this reality and planned around it, implementing RFID to help keep track of hidden inventory, and adjusting their inventory strategy to fully embrace omni-channel fulfillment.
NRF's Big Show is filled with big ideas, but sometimes the most important bits of knowledge aren't the flashiest – they're the ones that speak to action.
Suhas Sreedhar is a Strategic Writer at GT Nexus, a cloud supply chain provider that connects retailers, brands and their trading partners on a global network. Sudas writes frequently on technology, supply chain, Internet of Things and retail. His work has been featured in Forbes, IEEE Spectrum and various industrial blogs and trade publications.
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