We all have to admit there’s a lot of flash, bling, a bit of smoke and mirrors, and dare I say, magic, in retail. But retail can also be quite personal, driven by emotion and “feel.” In an earlier era, substantial fortunes were built in retail by visionaries whose seat-of-the-pants, back-of-the-cocktail-napkin instincts for form and function reflected a gift for knowing what the public wanted, knowing what would sell.
I’m not about to throw any cold water on vision and flash. It’s not my style, and besides, it might violate OSHA regulations. I am, however, here to tell you that today’s ultra-competitive, razor-thin-margins, multichannel free-for-all is not your motherly or fatherly visionary’s retail industry.
In today’s retail industry, your competition is not just other retailers around the corner, on the Web, or in an app, all of whom are already in your face and literally in the hands of any shopper with a smartphone, probably while the shopper is in your store or on your site. Forget the already formidable e-Commerce competitors like Amazon and Zappos. Tomorrow it could be UPS, Uber (all protestations to the contrary), or the next Google. So if you, as a retailer plan, to be around a decade from now, or in three years, or maybe by fiscal year end, you’d best be at the top of your game.
One problem with saying you plan to be at the top of your game is that data disconnects from within and without are scuttling your plans even as we speak. In fact, in a global retail economy that now accounts for more than $20 trillion, data disconnects are costing retailers more than $1.75 trillion. Data problems are causing retailers to miss out on revenue opportunities because they are unable to fulfill orders from one channel with inventory from another. The effect is compounded because brands are also missing opportunities that could and should be created when shoppers use multiple channels, such as buy online and ship from store and buy online/pick up (in-)store, or BOPUS. Data issues are causing retailers to make purchasing decisions based on incomplete and inaccurate data, which results in inventory that does not reflect what consumers want, and this creates overstocks, out-of-stocks (or stockouts), and returns.
By the way, if there’s a BOPUS, why isn’t there a BOSFS? Or in keeping with the drop-an-inconvenient-letter format: BOSS? But I digress.
What is important is that in order to survive in today’s omnichannel reality, you need the cross-channel inventory visibility and enhanced order orchestration provided by an order management system (OMS). An OMS accesses, manages, and distributes data about what shoppers want, from Web portals, log files, and both online and in-store systems. It tracks orders across channels. It tracks what is on the shelf (all shelves) through your POS or merchandising system; what’s in the warehouse via your warehouse management system; and what exists in the supply chain via ERP.
Retailers with the vision to truly integrate all relevant data in an OMS, such as American Eagle Outfitters, are not only ahead of the curve on this but are also making the cash register ring and the bottom line—not to mention their dialogues with customers and prospects—a lot healthier.
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