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presentation from Home Delivery World

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DRIVE INCREMENTAL SALES
BY ADDING STORE FULFILLMENT
TOM BARONE | VP, North America Operations
HOME DELIVERY WORLD, 2015
DISCUSSION POINTS
Why store fulfillment
How you do right
Consumer & retailer impact
HOME DELIVERY WORLD 2015
2
SHIFT:
Consumers have redefined commerce…
Retailers and brands need to respond
HOME DELIVERY WORLD 2015
3
40%
57%
82%
Purchases are omnichannel
Buy online & pickup in-store
Want to place online order
while in-store
Omnichannel Shoppers 3-4x more valuable
24%
Do in-store
pick up well
30%
Do associate
ordering well
24%
Do ship from
store well
HOME DELIVERY WORLD 2015
24%
Rank omnichannel
top priority
4
OMNICHANNEL INCREASES RETAIL REVENUE
AND IMPROVES MARGIN
20-40%
25-30%
30%+
2-7%
80%+
Average increase
in incremental
ecommerce revenue
Decrease in
shipping cost
Margin increase
on items
nearing markdown
Incremental chain
revenue with in-store
associate ordering
1 day transmit time,
96% 2 day
*Average across all eBay Enterprise Omnichannel Clients
HOME DELIVERY WORLD 2015
5
TOP RETAIL ORDER MANAGEMENT INVESTMENT DRIVERS
“Please identify the top three reasons for investing in a retail order management system.”
To support buy-online, pick-up-in-store program
18%
To enable us to fulfill online orders from our physical stores
9%
To support the rollout of additional web
distribution centers (DCs)
17%
16%
To enable a single view of inventory across channels
6%
To enable store associates to place orders from
the online channel
3%
To enable omnichannel returns
3%
12%
9%
12%
9%
14%
10%
7%
10%
13%
11%
To support shipping to store
To enable a single view of customer orders across channels
12%
13%
8%
11%
5%
First
Second
Third
With Omnichannel excellence becoming an imperative, retailers and brands are rushing to operationalize
increasingly complex cross-channel order processing and fulfillment scenarios
HOME DELIVERY WORLD 2015
6
HOW YOU DO OMNICHANNEL RIGHT
KEY STRATEGIES FOR OMNICHANNEL
SHIP FROM STORE
Increase revenue, margin and inventory turns by exposing
store inventory to the web and captures lost sales
IN-STORE PICKUP
Increase sales, store traffic and enable consumer convenience
with same day pickup
IN-STORE ASSOCIATE ORDERING
Save sales of out of stock products in-store and improve
the consumer experience
HOME DELIVERY WORLD 2015
8
EXECUTING SHIP FROM STORE
INVENTORY AVAILABILITY
STORE OPERATIONS & TRAINING
• Single view of network inventory
• Store set-up, protocols and procedures
• Selecting products / categories for SFS
• Staffing strategies
• Accurate store level inventory
• Ongoing training process
• Safety stock levels
• Shipping SLAs and managing supplies
• Automatic adjustments of “Available to
Purchase” inventory levels
• Managing pick up times / rules
ORDER ROUTING CAPABILITY
• KPIs and reporting
COMPENSATION AND SALES CREDIT
• Proximity to delivery address
• Goals and incentive plans
• Minimize split orders
• Credit for sales
• Inventory optimization / daily store limits
HOME DELIVERY WORLD 2015
9
INTELLIGENT ORDER ROUTING IS NECESSARY
SALEABLE INVENTORY
ALLOCATION RULE VARIABLES
• Item eligibility
• Split shipment rules
• Safety Stock Levels by order type
• Expedite order rules
• MIA – inventory discrepancies
• Max system allocation attempts
• In Flight Orders
• Inventory proximity to customers
• Defining the store with “the most” inventory
• Afternoon and weekend allocations
STORE SETTINGS
• Enabled fulfillment locations settings
PRODUCT / CATEGORY SOURCING PRIORITIES
• Weighted location preference sequencing
• Price point / unit margin
• Max units / orders per day per location
• Local / Regional merchandise
• Special orders (Gift Wrap, fragile, GWP, etc.)
• Warehouse, Store, Dropship
• Product sell-through / weeks of supply
• Freight and labor expenses
HOME DELIVERY WORLD 2015
10
EXECUTING IN-STORE PICK UP
INVENTORY ACCURACY IS CRITICAL
• Safety stock levels
• Price discrepancies between online and in-store prices
ITEM AND STORE PARTICIPATION
THOUGHTFUL PICK UP LOCATION
• Customer ease
• 37% of shoppers purchase additional items when picking up in-store
TRAINING AND STORE OPERATIONS
• Established protocols and training
• Goals and incentive plans
• Ensure pick process doesn’t interfere with in-store customers
HOME DELIVERY WORLD 2015
11
EXECUTING IN-STORE ASSOCIATE ORDERING
CREATE WIN-WIN FOR CONSUMERS
• Provide free shipping on in-store orders
• Promote / market the capability (Ask Us)
IDENTIFY KEY PRODUCT CATEGORIES
TRAINING & SUPPORT
• Create a program support mechanism
• Easy access to place orders (Tablets / mobile)
• Educate associates to check online inventory
DRIVE FROM EXECUTIVE LEVEL
• Create goals and incentives for stores
• Establish reporting & communication across the organization
HOME DELIVERY WORLD 2015
12
CONSUMER AND RETAILER BENEFITS
DRIVING INCREMENTAL REVENUE
WITH SHIP FROM STORE
CONSUMER BENEFITS
• Expanded product assortment
• Few “out of stock” / “back order” scenarios
• Fast delivery (80% within 1 day; 96% within 2 days)
RETAILER VALUE
• 10-40% incremental ecommerce revenue
• Increase inventory sell through
• Decrease markdowns
• Optimize store assets and labor
HOME DELIVERY WORLD 2015
14
PROVIDE CHOICE WITH
IN-STORE PICKUP
CONSUMER BENEFITS
• Convenience of online shopping
• Same day pickup
• No shipping costs
RETAILER VALUE
• 37% purchase additional products while picking
up in-store
• Leverage store assets
• Increase foot traffic and upsell opportunity
*Source: Forrester’s Technologies | **Source: E-tailing Group
HOME DELIVERY WORLD 2015
15
ASSOCIATE ORDERING
SAVES IN-STORE SALES
CONSUMER BENEFITS
• Expanded product assortment
• Creates win-win for consumers
• Free shipping on in-store orders
RETAILER VALUE
• 2-7% incremental chain sales
• Save out of stock sales
• Increase inventory sell through
• Optimize store assets and labor
HOME DELIVERY WORLD 2015
16
PRIORITIZING OMNICHANNEL INITIATIVES
High
Business goals
Inventory characteristics
Average price point
Retailer type
BUSINESS IMPACT
Ship from
Store
Associate
Ordering
In-Store
Pickup
Store footprint / configuration
Low
Hard
Easy
EASE OF IMPLEMENTATION
HOME DELIVERY WORLD 2015
17
QUESTIONS?
Tom Barone, VP North America Operations eBay Enterprise
www.ebayenterprise.com
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