If you can route orders to where the stock is, what is the right strategy for stock distribution in an Omni-channel retailer?
The cost of stock is now believed to be 11% of the value. That includes all the costs of handling, moving, storage, counting, and finance. This excludes the cost of stock ‘markdowns’, which can be very large.
So CAN RETAILERS HAVE THEIR CAKE AND EAT IT? The answer is ‘YES’.
Omni-channel retailing means you can increase your product range without significantly increasing your cost of ‘stock’. Here’s how.
If you have sophisticated order routing coupled with astute delivery pricing models, consumers now know that the ‘rarer the product’, the longer it may take to get it.
So that means you can distribute stock more intelligently by ‘rarity’ of product or cost of distribution.
You can hold fast sellers and suppliers close to the customer and slow sellers further up the supply chain.
To achieve that you need two things:
Better range planning and stock optimisation combined with better Enterprise Order Management.
Intelligent Order routing allows for better/smarter range planning and stock distribution.
This means larger ranges and smaller stock investments