How Nordstrom, and other retailers, can Improve Profits and Customer Service with Better Omni-Channel Fulfillment

Omni-channel retailing — or as some people are increasingly saying, “Retailing” — is complex and can increase costs for retailers. Here are a few ways retailers can improve store-level fulfillment to increase profits and customer service.

Retail has changed forever, let’s get that over with. Customer purchases follow an almost infinite number of paths that include bouncing among online, stores, social media, mobile devices, shopping apps, maybe back to online, maybe back to the stores, and so on. Retailers with stores have expanded their offerings to shoppers, such as free shipping, extended discounts, and free at store returns.

While these tactics can help capture market share, they also increase overall costs and can reduce profits. For example, a recent Wall Street Journal article highlights the challenges Nordstrom faces in its omni-channel operations as it “gained market share. …But the cost of boosting online sales has cut into profits.”

A recent study from KPMG expands on challenges retailers face in executing omni-channel. Its “Omnichannel Retail Survey 2016” finds that shoppers encountered slow or unavailable websites, were resistant to paying shipping charges, increased returns, and experienced problems with in-store pickup.

The last item is what really caught my eye, since I work for a company focused on retail store operations. KPMG’s survey found that many shoppers had unhappy omni-channel fulfillment experiences: one third of Click & Collect customers had issues when collecting their order including:

• Limited staff during peak trading to find the package in high density stockrooms
• Customers faced long queues as a result

In a previous blog, I noted how retailers still attempt to fulfill omni-channel demands in stores using obsolete processes and technologies:

• Retailers still budget labor using basic calculations such as labor to stores sales ratios. These methods do not account for new omni-channel demands such as picking and shipping online orders, processing returns, and bringing orders to service desk.
• Poor labor allocation methods result in stores not having enough labor to help customers and fulfill omni-channel requirements during peak sales times.
• Retailers still use manual processes, such as viewing online orders in back office terminals and then inefficiently farming out fulfillment to store associates using paper pick lists.
• Most lack a single, easy to use dashboard to view alerts from multiple store systems on mobile devices and respond to changing conditions following best practices
• Many do not take information from an order management system to provide a network-wide view of inventory to counter store stock-outs using Ship to Home

While retailers still need to surmount challenges in shipping, inventory, marketing, and pricing, luckily there is an easy solution to address their store operations challenges: a real-time store execution and workforce management platform. Here’s how Reflexis enables retailers to reach their in-store omni-channel service goals:

Reflexis Workforce Manager (budgeting, forecasting, labor scheduling, and employee self-service) retail-centric advanced mathematics optimize schedules to include all work that has to be done — customer service, omni-channel, and corporate tasks.

• A simplified, intelligent front end that recommends right-time best practice actions in response to shifting customer demand patterns, sick callouts, overs/shorts, and other workforce matters. The right amount of labor is scheduled, including to fulfill omni-channel orders. Time to finish labor operations duties is minimal. Team members spend more time helping customers.
• Reflexis StorePulse can take orders from an Order Management System, send them to the right role in-store at the right time so team members can fulfill omni-channel efficiently from the sales floor.
• Reflexis StorePulse provides a single, easy to use dashboard to view alerts from multiple store systems on mobile devices and respond to changing conditions following the retailer’s best practices.

Reflexis StorePulse integrates with OMS, Point of Sale, Internet of Things, sensors, social media, and any other store-facing system. Store team members interact with and update multiple systems and receive best practice direction on how to respond to changes and surprises. As such, StorePulse ensures that all the strategies your marketing, e-commerce, supply chain, and merchandising teams develop are efficiently executed to provide a better in-store shopping experience.