The Greatest Impact on Customer Experience is by Building a Key Operational Capability

Retailers must focus their business transformation efforts and limited IT budgets on strengthening operational capabilities which in turn would have a great impact on their customer experience strategy. Some of the must-dos include point-to-point fulfillment, inventory visibility and unified order management. The #1 omnichannel operational challenge that retailers have to overcome is to address the customer’s need for shipping-speed and velocity of orders. Same-day and next-day shipping is where most of the operational innovation will take place for these companies. This is especially true when it comes to the increased need for a robust order management and fulfillment infrastructure that enables ship from DC, supplier direct drop shipment, click and collect, smart locker shipment and ship from store. The relationships such as of a supplier, 3rd party fulfillment partners and on-demand fulfillment services partner are also going to be crucial for first-time right orders and on-time order delivery. Legacy enterprise resource planning (ERP), point-of-service (POS) and warehouse management systems (WMS) cause significant delays in upgrading unified distributed order management visibility, accuracy and execution. While retailers will have to continue to invest in upgrading their omnichannel supply chain for order visibility and agility such as integrated DCs, cross-dock, split order and other related processes, the role played by stores will become even more critical in months and years to come. EKN’s 3rd Annual Stores Benchmark report indicates that 8 in 10 retailers anticipate an increase in fulfillment of online orders from store. Additionally, 32% of retailers are going to offer same-day shipping in the next 12 months, totaling close to 75% by the end of 2016. Stores need to be spruced up...

Order Fulfillment Cost Can Be A Huge Margin Eater

Order management has long been considered one of the core competencies for Omnichannel success. In today’s competitive retail environment, maintaining a core competency in distributed order management of online, catalog, call center and in-store orders is more important and tougher than ever. Due to pressures associated with rising digital and in-store velocity and variety of orders, the ability to manage costs, visibility and agility of orders enterprise-wide is a daunting task for retailers. Data from EKN’s recent Omnichannel Order Management survey indicates that for every dollar that a customer spends on an order, retailers are spending an extraordinary 18 cents in total order lifecycle cost. 8 in 10 retailers reported an increase in the order management and fulfillment costs compared to last year, with an average year-on-year increase of 5.07%. This number is substantial and a drain on margins that are already slim in the case of many retailers. Order costs are made up of varied direct and indirect labor, equipment, systems, handling and shipping costs. When calculating cost of goods sold, free shipping is usually a big cost burden, and in fact consumers’ expectation of free shipping is the leading or der management-related business challenge for 4 in 10 retailers. Retailers across the board are in agreement that managing order management systems and fulfillment processes has become more multifaceted and complex. On the business side, the need to improve order cycle time (45%), lack of visibility across order functions and processes (44%) and lack of alignment between inventory, order and supply chain operations (41%) are amongst major order management process-related issues retailers are struggling with today. These challenges...

Managing Order Costs and Velocity: A Route to Dynamic Order Management

Managing Omnichannel orders across channels as quickly as possible and at a reasonable cost is a significant challenge for retail­ers. Data from EKN’s recent Omnichannel Order Management survey indicates that for every dollar that a customer spends on an order, retailers are spending an extraordinary 18 cents in total order lifecycle cost. Download this Point of View to learn how increased cost per order is more than just a margin leak for retailers and understand what can be done to address the deficiencies in the current Omnichannel order management processes to increase order accuracy, margin per order and perfect orders. Download Full...

Webinar: Omni-channel Order Management & Fulfillment

Upon recommendation from EKN Research’s 2014 Retail Advisory board, on Tuesday September 23rd at noon EST/9 am PST, EKN Research’s VP & Principal Analyst, Sahir Anand, conducted an exclusive “Top Transformation Drivers for Omni-channel Order Management & Fulfillment” webinar. This webinar revealed new facts from 100 retailers about what they want and expect in an Omni-channel Order to Fulfillment strategy and systems plan. A snapshot of the findings summary from this webinar: For 61% of retailers, online order fulfilment from store is projected to grow the maximum among all the other aspects related to store in the next 2 years Nearly half (47%) of retailers process both Business-to-Consumer (B2C) and Business-to-Business (B2B) Omni-channel/e-commerce orders today Both online and Omni-channel order volume is undoubtedly on the rise. These companies expect 4.5 average revenue increase due to Omni-channel commerce and expect that share of online sales will increase from current 13% to 19.1% by 2016 As a result, a third of retailers say that reducing cost of orders is a top strategic investment priority for them at least for the next 12 months Download Full...