Phantom Inventory & Dark Stores?
Reflections from the Gartner Supply Chain Conference
The role of the retail store must change. Amazon is putting pressure on just about every type of retail business, and the best way for a traditional retailer to combat that pressure is through an effective Buy Online & Pickup In Store (BOPIS) program with same day or next day service. This was my big takeaway from the Gartner Supply Chain Executive Conference held in Phoenix, Arizona last week. It also falls in line with the finding of the Qlik retail industry team which identified the changing role of the store as one of three key retail industry shifts changing the industry in a 2016 blog.
Why does the role of the store matter?
Retailers with large brick-and-mortar footprint have increased costs for managing a physical store, stocking it with inventory, and staffing a physical store. This has always been viewed as a disadvantage when competing against the likes of Amazon because Amazon does not have to carry the costs associated with large brick-and-mortar store networks. Recently, Wal-Mart has flipped that logic on its head with the announcement quoted in a recently Bloomberg.com article that, “shoppers will be able to save money on 1 million products if they order online and pick them up at one of the chain’s 4,700 U.S. stores.” Wal-Mart is attempting to use their retail stores as an important cog in their supply chain that Amazon will not be able to easily replicate while passing along the savings of that model to their customers. Other retailers are watching closely and some have taken the concept even further with dark stores.
Analytics facilitate the change
In order to capitalize on an existing retail store network as an extension of the supply chain, a retailer must establish visibility and actionable analytics across the different systems that support your new order and fulfillment processes. For this type of complex project the following capabilities are required:
- Agility – Redesigning the supply chain to incorporate both stores and dark stores will require new systems and changes to existing systems. A retailer must quickly and easily plug in new systems, modify legacy systems, and unplug outdated systems without interrupting business operations.
- Sophistication without Complexity – A modern analytics platform must allow a business user to uncover relationships in data across systems without requiring an advanced technical skill set.
- Mobility – Analytics are required at the point of decision which is in the store via any mobile device. A retailer is not going to uncover phantom inventory in the corporate office until it is too late.
- Governance – Business users must be able to trust the data in their analysis and the core analytics platform must have controls for granting access to secure data
