How do I transform my business operation to keep pace with the direct to consumer trend? What system architecture do I need to excel under new demands and requirements? Should I supplement, combine or replace?
So what about retailers?
Online up, high street down. Rates up, footfall down. Vape stores up, clothes stores down. That story has been reported over and over.
Retailers are being forced to innovate, keep pace and broaden, offline and online, their customer-centric offering. It’s a challenge, particularly because their supply chain operations have typically been very strong. They know how to keep the shelves of their shops full. It’s what their companies have been built on. So now, they are grappling with the requirement to replenish stores, and ship orders direct to customers from a warehouse, globally, fast. On top of that, there’s new angles, such as shipping with strategic retail partners (SRPs), integrating pop-ups alongside the full time stores, shipping from stores for same day delivery, selling on Amazon through SFP and FBA...the list goes on.
One of our clients, a Fortune 100 enterprise in the US, has taken this journey head on.
Alongside Peoplevox, they launched a brand new e-commerce arm, having built a retail, bricks and mortar business for 50+ years. Existing infrastructure for retail warehouse management lives on, in harmony with the WMS that owns their e-tail arm. We found a way to augment their way of working, without overhauling the entire operation. Having previously used a 3PL with limited stockholding, suddenly all their stock was available online, and orders were processed with e-commerce level speed and efficiency.
Ripping up the architecture
When e-commerce revenues grow from 1% of a business to 10%, the business case for total transformation becomes more apparent.
In order to lead the way in customer centric retail, and meet shoppers where they are, the fulfillment operations need to be laid down from scratch, to cope with all these new scenarios: Pop-ups, SFP, ship from store, etc etc. These are the activities driving the movement from legacy systems to modern WMS usage.
Diseconomies of scale
Trying to use an existing ERP gets more and more expensive the faster you grow. We are talking about savings of 50% on walking time alone with a e-commerce specific order picking workflow. Those processes can’t be just plugged into a legacy system.
What can you plug in together, however, is a selection of best of breed technology serving each of steps along the ecommerce fulfillment process:
Shopify / Shopify Plus for ecommerce platform. A modern ERP like Netsuite / Business Central. Then, a WMS that can handle retail and ecommerce. Integrated with a live, modern and adaptable Integration platform or IPaaS.
This may seem like a huge investment, particularly when your one existing system claims to be able to handle all the various requirements in one place. This is the curse of the all-in-one: it does nothing excellently.
Now, more than ever, we recommend shifting your resource to meet your customers wherever they are, directly. If your product and marketing strategies are shifting to serve the fastest growing segment within your business, your tech should too.
Another of our clients, with a run rate of approx £50mn a year, understand very clearly the ROI of an WMS: the upheaval is worth it, and the complementary solutions are paid for by the efficiency savings alone of having the right WMS in place for the types of customers and orders they’re fulfilling.