www.supplychainstandard.com
Starting with this vision, this influences
how my stockholding is determined,
where and at what level, how the pick and
pack operation works and then how the
delivery to the customer is enabled.
“In a true multi-channel experience the various
windows should reflect something very similar,” says
Wall. “In terms of shopping and ordering, it means
providing a means of making the product as tangible
as possible, but it also means that the breadth of range
that you see online should be available in store too. I
should be able to view the extended range and know
how the extra ranges can be made available to me. Is
this product available in other stores?
“Starting with this vision, this influences how my
stockholding is determined, where and at what level,
how the pick and pack operation works and then how
the delivery to the customer is enabled,” Wall explains.
However, he warns that established high street retailers
could be held back by the complexity of their operations
and the constraints of their legacy systems. Progress
may be too slow, which could open up the possibility for
more nimble competitors to leapfrog them.
There are plenty of opportunities presented by the
new channels to market. One interesting development
is Direct Ship. Through the internet a retailer can now
offer the same quality of service to the customer by coordinating
delivery direct from a supplier as by
holding stock in its own supply chain. This opens up
the possibilities of offering a far larger range of
products to the consumer. But key to Direct Ship is
having good order management systems with full
visibility and control of activity across the supply base.
Such B2B processes are now catered for on an SaaS
basis through companies such as Wesupply and GXS.
Direct Ship facilitates range proliferation at no extra
cost in inventory holdings, warehousing or dispatch
for the retailer, but may lead to a greater number of
returns, with all its associated complexity. And dealing
with returns is going to become a major focus for
multi-channel retailers.
Demanding
Getting the goods to the consumer through multiple
channels is demanding enough, but dealing with the
returns is quite another challenge entirely.
Consumers expect to be able to buy through one
channel and return through another, if they so wish.
For the retailer, this is where costs could severely
erode profits.
In the past, companies were inclined to simply
write-off or dispose of returned goods. But now
retailers are more aware of the costs of returns as
more channels open up for the consumer, returning
goods becomes easier and legislation puts pressure
on companies to recycle. Managing the returns
process properly will play a significant role in
improving profitability and importantly, in
providing a more competitive service offering to the
consumer. Steve Smith of Manhattan Associates
believes there could be some surprising initiatives
Future Supply Chain : SCS 15
undertaken in this area.
According to Smith, one scheme under
consideration by a couple of retailers is to manage the
returns process for products purchased from
competing retailers. Under the scheme, the
innovative retailer would offer a no-quibbles returns
policy, handling the whole returns process, regardless
of the fact that the branded product was bought
elsewhere. The logic behind this adventurous idea
being that the service benefit to the customer creates
loyalty and captures data on potential customers,
outweighing the cost associated with running such a
novel returns policy.
Mark Hewitt, chief executive of multi-channel
logistics specialists, iForce, sees this developing
interest in returns: “There will be a growing demand
for outsourcing e-fulfilment to companies that can
also offer returns processing from the same facility,
as this will drive down costs by enabling a more
efficient process for putting returned goods straight
back into stock.”
Managing returns
The key to managing the returns process efficiently
is visibility. Hewitt’s company uses in-house
developed software, ReSCU, to gain visibility for
clients. “From the moment a retailer receives a
returned product, credits the customer and records
it through the till, that return becomes stock that has
a value in the retailer’s supply chain,” he says. “With
the rapid product development programmes in
retail, it is vital to process a return as early as
possible to gain as much value from it as possible.
For example, a television returned to the store may
be superseded while it sits there gathering dust for
up to eight weeks, so its value will be reduced – even
on the second user market. If a retailer cannot see
that its stores are just sitting on this stock, waiting
until a warehouse is full of returned product before
doing anything about it, then it is throwing money
down the drain.”
There will be a growing demand for outsourcing e-fulfilment to
companies that can also offer returns processing from the same
facility, as this will drive down costs by enabling a more efficient
process for putting returned goods straight back into stock.
Back in July, iForce went live with its service for
Sainsbury’s new non-food online offering, following
thelaunchoftheretailer’snewnon-foodwebsite.The
service iForce provides is said to be a first for the UK
fulfilment sector as it combines online fulfilment,
online returns and retail returns processing under one
roof. Over 8,000 non-food SKUs are handled at a
250,000 sq ft depot in Corby.
The multi-channel returns processing service
consolidates returns of non-food products bought
from retail stores and online. Using ReSCU, iForce
manages the dispersal of the returns via routeing
perfect-condition goods straight back to stock in
Corby, or the onward sale of raw returns and
discounted lines via its Buy-Force platform, which
sells single and bulk pallets of all types of customer
returns to B2B customers and the general public.
iForce also recycles obsolete items in accordance
with the WEEE directive to all but eliminate waste
going to landfill.
Although complexity is the greatest challenge
facing multi-channel retailers, those that are able to
embrace the challenge and master the issues at
stake will be best positioned to take advantage of
the opportunities presented by these new channels
to market.
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.