Commentary | Supply Chain Perspectives

How to Beat Amazon at the Retail and Supply Chain Game in 2017

Tags: Logistics I.T., Retail, E-commerce, Fulfillment, Retail Logistics

Nick McLean is CEO, OrderDynamics, 866-559-8123

In a recent omni-channel benchmark study, Retail Systems Research identified the top three omni-channel technology investments for retailers in 2017:

  • Distributed Order Management – 46% planning a change, 14% with net-new budgeted projects
  • Enterprise Content Management – 42% planning a change, 17% with net-new budgeted projects
  • Enterprise Wide Inventory Visibility – 37% planning a change, 19% with net-new budgeted projects

Of these top three priorities, distributed order management and enterprise wide inventory visibility play a key role in ensuring that retailers have the right inventory in the right place to meet customers’ fulfillment needs and deliver an excellent customer experience. However, these are not new concepts, so what’s driving the change and what do retailers need to do prepare to make these changes?

Now is the time

Despite the fact that retail and supply chain thought leaders have been talking about these technologies for some time, not all retailers have made the investment to implement a true omni-channel distributed order management system (OMS) with enterprise wide inventory visibility. But one big force is driving the change—Amazon. Retailers are finally realizing the need to keep up with retail’s, and now the supply chain’s, biggest beast.

And what does Amazon have that others lack? A great customer experience, from the time a shopper visits the website until they receive the order. Like, Amazon, all retailers need to offer customers an excellent experience from the time they make their purchase, choose their fulfillment option, receive their package, and through the post-purchase experience. However most retailers possess what Amazon does not—brick-and-mortar stores. Retailers need to exploit that as a local inventory hub—the fastest way to unite a customer with a product and a chance to provide a personal touch that Amazon does not. But in order to do so, retailers must invest in distributed order management and enterprise wide inventory visibility.

How to prepare

Before an organization implements any new technology, there are some key decisions they need to make. First, retailers need to decide if they’re going to build a solution in-house or turn to a solution provider. Given that retailers’ expertise is in retail, not technology, it’s likely that they don’t have the resources to build and deliver a robust technology solution. The simplest answer is to go with a solution provider.

Next, retailers must decide whether to try using an application from an existing vendor or go with a best-of-breed solution. While it might sound like a good idea to simply add on the order management solution available through a retailer’s existing POS vendor, more than likely that technology is not going to provide true omni-channel capabilities and won’t work seamlessly with all fulfillment channels. A best-of-breed solution gives retailers the depth of omni-channel functionality and is updated as market needs change.

Not only is enterprise wide inventory visibility important on its own, it is the key to successfully implementing an omni-channel OMS. If retailers are unable to get an accurate view of inventory across all sales channels, their OMS will be insufficient and ineffective.

Inbound Implications

Investing in an omni-channel OMS allows retailers to make more accurate decisions about where to stock inventory. By relying on OMS data rather than the POS data retailers have traditionally relied on to make decisions, retailers ensure the inventory is available where customers want their orders to be fulfilled. Traditional POS data only accounts for inventory that was purchased and fulfilled from the store, ignoring today’s omni-channel fulfillment options such as buy online, pick up in store—at the expense of profit. By providing a clear and accurate view from the start, an omni-channel OMS helps avoid headaches down the road with out-of-stocks and overstocks. Beyond inventory positions, this also allows retailers to close more sales with the greatest possible margins.

With all that said, 2017 is a critical year for retailers. With heavy competition from Amazon in both retail and supply chain logistics, if companies don’t begin making changes and investments in omni-channel in 2017, they will not have enough time to get ahead, and by 2020 they will see serious repercussions. By investing in omni-channel strategy and technology in 2017, retailers can secure their place in the industry for years to come.






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