2020 Innovation in Order Management Awards
2020 has been an extraordinary time to be a retailer. The rate of acceleration for innovation to match fast-changing consumer behaviors has been remarkable. While it can be daunting to try new things, retailers who adjusted to implement new customer offerings and new order management and fulfillment solutions in the face of unique challenges month after month, have come out ahead.
To recognize the incredible work achieved in 2020, the IBM Sterling team is excited to present our virtual awards for “2020 Innovation in Order Management”:
Community Leader Award – JOANN
COVID-19 forced JOANN to close half of their stores in the U.S., but the items inside were still in high demand as eager shoppers worked to make masks or help provide personal protective equipment. JOANN leaned into the opportunity to help protect healthcare workers, first responders and communities, launching its “Make to Give” campaign to encourage mask-making at home.
JOANN also upheld a genuinely noble act of not furloughing any of their store associates by re-training them to pack and ship orders from closed stores. As a result, JOANN was able to quickly expand ship-from-store (SFS) to their entire network almost overnight.
Faster Time to Delivery Award – Kroger
Kroger plans for Thanksgiving months in advance to ensure their shelves are stocked and turkeys are available. This year, the team at Kroger encouraged shoppers to plan ahead and think about other ways to shop to avoid stepping inside their stores. “We always tell our customers use our website, use our app. Plan in advance, use our pickup or delivery service,” said Rodney McMullen, CEO of the Kroger Company. In partnering with delivery apps such as Instacart and Ocado – who both offer same-day or next-day delivery options – Kroger is able to meet consumer expectations while still driving e-commerce business through its own websites.
Inventory Management Award – IKEA
Despite a bumpy year due to temporary store closures, IKEA’s profits rose 13% to $2.4 billion for the twelve months ending in August – with sales climbing in September and October. This is due in large part to IKEA’s inventory management strategy. The company avoids waste and inefficiencies caused by the bulk ordering of items that don’t sell as expected by employing “minimum settings” – the lowest number of products that have to be available before a new order can be placed, and “maximum settings” – the highest number of products that can be ordered at once. The result? IKEA is able to maintain a larger inventory which reduces the company’s shipping costs.
Curbside Pickup Award – Best Buy
Many brands have started offering curbside pickup – in whatever way works best for the customer experience. One leading retailer has truly excelled at this order fulfillment option. As the busiest holiday shopping days quickly approach, Best Buy has rolled out a curbside pickup experience that is seamless and safe. You park in a designated area, use the button in your emailed or texted order confirmation to let them know you’ve arrived, then flash an ID and give them your order number when they bring your purchases to your car, and you’re done!
Winning with AI Award – ADIDAS
Adidas extended and optimized their overall cost-to-serve with the help of AI. The team focused on omnichannel capabilities like ‘digital store availability’ where retail inventory is used to augment online availability, in combination with ‘ship-from-store’ which allows adidas to service consumers faster than before by turning their stores into mini distribution centers. The result with the help of AI? Reduced shipping cost per order, increased net sales and full-price sell through, and higher fulfillment reliability by managing capacity and load-balancing demand across the network.
Real-Time Inventory Insights Award – Party City
Gatherings are limited – or obsolete – this year due to the pandemic. However, Party City has managed to increase digital sales in Q3 by 36.0% as a result of implementing new order fulfillment capabilities such as buy online, pickup in-store (BOPIS), curbside pickup and delivery.
To successfully drive these fulfillment initiatives, Party City has real-time insights into their inventory. They’re also one of the first retailers to introduce self-checkout through the Party City mobile app. This provides customers with an enhanced digital shopping experience via the app, allowing them to complete their order transaction and pickup their items without ever contacting a store associate. The newly launched channels became critical to their integrated omnichannel fulfillment strategy and helped covert customers at a rate 75% higher than last year as the result of several major user experience improvements.
Omnichannel Fulfillment Award – Ulta
Ulta was one of the first retailers in the U.S. to offer curbside in a major way – at 350 locations in 38 states. And just recently, the beauty retailer announced a strategic partnership with Target – adding another fulfillment channel to their model. The ability to scale their curbside and BOPIS business this year to all locations across the U.S. was a major undertaking. But the pay-off was big. Ulta saw a 200% rise in online sales during Q2.
Supply Chain Sustainability Award – Eileen Fisher
In a recently published Vogue interview, Eileen Fisher responded to the question of how the sustainable fashion brand is navigating through the pandemic by saying, “Rather than just pollute less or do less harm, we can actually kind of revive the earth through the process of making clothes.” And they did just that! With the increase in loungewear sales generated in early 2020, Eileen Fisher finally hit the market with a long-time request from its shoppers: a sustainable sleepwear collection.
There are countless other innovative stories spun up in the supply chain space this year, and IBM Sterling would love to hear yours. How did you innovate in unexpected ways in 2020? As we head into 2021, we can all use as many positive stories as we can get.
IBM Sterling works with many clients like the ones above as part of our year-round Event Readiness program. The program is designed to help businesses strengthen their technology infrastructure ahead of peak events to help manage disruptions and deliver a seamless customer experience.