Skip to main content

Winning the race for omnichannel excellence


In the last 12 months the buzz around omnichannel has become the most consistently discussed trend for major retailers. It’s always noteworthy when a trend emerges and becomes a part of the mainstream conversation so quickly, but what is even more noteworthy is how fast omnichannel has become standard operating procedure.

This has left many retailers simultaneously trying to understand the impacts of omnichannel on their business, while trying to successfully merge their retail and e-commerce business into a seamless experience for their customers across the brand. The biggest reason that omnichannel has transitioned so quickly is because the change is being driven at the customer level. Customers want to research, experience, purchase and then return merchandise in ways that are convenient to them. They are more willing to look across multiple retailers’ touchpoints before making final decisions. Things become challenging when retailers begin to examine the impacts of these shifts and find themselves needing to make comprehensive changes across their channels very quickly while allowing for the nuances of each type of business.

For example, online shopping has its own seasonality in relationship to demand trends and pricing. As a result, rules for inventory allocation and replenishment can become very complex. Many retailers do not have the integrated analytic solutions needed to accurately predict and respond to online and brick and mortar customer demand. They are forced to navigate through many manual processes across disconnected and static solutions for business intelligence, analytics and execution. The challenge is profitably moving inventory to address this new age of cross channel demand. Does the retail store or the online order get priority when it comes to inventory allocation? Is it better to fill an online order (immediate demand) if it means shorting a store (future demand)? Many retailers find that filling online orders with inventory allocated to stores may impact more than that single item and affect the store level assortment needs. Retailers need to understand and consider the in-store probability of a full priced sale as well as in-store ancillary sales to make an informed decision. Multiply this decision across thousands of items and it becomes clear why so many retailers are exploring their options in better understanding customer demand metrics with advanced technology solutions.

Transparency in understanding the impacts of omnichannel behavior on demand and the consequential inventory adjustments on the overall allocation needed is the first step for many retailers. Omnichannel represents an array of potential interaction points between the consumer and the retailer including researching, experiencing, buying and potentially returning of the product. Understanding all of them while addressing the day-to-day needs of their shoppers is an area many retailers are racing to better address. At the same time, retailers need to assess if their current allocation and replenishment model is adaptable and responsive enough to address customer behavior across channels highlights the need to make additional investments to better support those views. Even established retailers with a significant amount of channel related experience can underestimate how different and difficult it is to efficiently and profitably fill orders from any location or channel without impacting other parts of their business model. There is no doubt that omnichannel is driving the need for more sophisticated allocation and replenishment strategies to successfully marry the customer’s brand experience with supply chain efficiency to fully maximize the retailer’s inventory investment.

As retailers significantly ramp their investments in managing the brand experience and managing the touch points with their customers as closely as possible, they are thinking more and more about specific ways to recoup those investments. For many ensuring they are benefiting from the monetization of that investment by ensuring their ability to profitably fill the orders via an accurate and responsive view of allocation and replenishment is key. Fundamentally, retailers who can successfully aggregate their present and future demand with their inventory are poised to take advantage of a number of unique opportunities for a redefined level of success.

Scott Aubitz is the CMO and VP of product strategy for Minneapolis-based Quantum Retail. Quantum offers the retail industry solutions for understanding product demand based on consumer behavior and turning that understanding into actionable results. Quantum Retail’s Allocation, Replenishment and Order Planning solutions increase profitability by helping merchant’s to be more responsive and by supporting their Multichannel and International objectives easily and accurately. For more information, go to

This ad will auto-close in 10 seconds