by -- March 21, 2016
I’m guessing that almost everyone is familiar with the Eagles 1977 song “Hotel California”. It’s one of those recordings -- probably the one the Eagles are best known for -- that spark great conjecture and speculation about the symbolism of the lyrics or the overall meaning of the song. I personally like the explanation Don Henley provided in the 2013 documentary, History of the Eagles, when he said that the song was about "a journey from innocence to experience...that's all.”
Recently, I had the opportunity to attend a couple of retail supply chain conferences. As I listened to supply chain leaders working out how to support omni-channel efforts, I began to sense a shift in strategy from the good old days of supporting stores (a period of innocence), to supporting customers who want their product, when and where they want it (the experience). By all accounts, the transition to this new strategy appears to have been a painful one.
“Up ahead in the distance I saw a shimmering light”
I love the paradox found in attending conferences. By nature, the speaker topics are optimistic and extol the virtues of supporting “Buy Online Pick Up in Store”, or “last mile delivery” or “ship from store”.
Nevertheless, while the presentations are sharp and the speakers are articulate, all that polish stands in sharp contrast to the hallway, bar and coffee shop discussions being held among their peers, who are struggling with the more mundane nuts and bolts challenges associated with operations. Inventory accuracy, multi-node shipments, escalating freight costs, and so forth – these are the challenges facing today’s operational leaders. Compounding matters, those leaders who have survived the initial operational hurdles associated with their transition to a more customer-centric model now find themselves facing even greater challenges as they enter the next phase of activity, or omni-channel 2.0.
“They stab it with their steely knives but they just can’t kill the beast”
In order to provide a seamless customer experiences across channels, most retailers have invested heavily to keep pace with the competition. While the data doesn’t support overall revenue growth in most cases, a seamless customer experience has become table stakes for grabbing or maintaining share. Supply chain and store operation leaders also now have greater personal experience to draw upon. They have seen the 10 item orders ship in 10 packages too often.
So where do these leaders turn for solutions? Software vendors continue to promote technology as the prevailing answer. However, in many cases, there are gaps in systems capability. In my view, success in the omni-channel 2.0 era is much more likely to be determined by how successfully supply chain and store operation leaders are able to execute. This will likely require that they:
Return to lean methodologies and process work that re-think ways of working rather than dressing up old practices.
Maximize the sizeable systems investments already in place, especially in the area of operations. Too often systems were employed on previous work methods and with outdated job roles versus the model(s) needed for cross channel delivery.
Resolve organizational and financial reporting differences that cling to silo channels instead of distributed commerce (one store).
At Point B, our retail industry team is busy working every day to help clients through this period of experience. We understand the issues and are ready to apply that knowledge to get you back to sustainable operations that support the new paradigm.
Or, as Mr. Henley once put it, we realize that with omni-channel, “you can check out anytime you like, but you can never leave.”