T he retail sector is tough. That’s true whether you operate brick-and-mortar stores, woo customers online, operate a subscription business, or engage in some combination of these. Two dozen retailers filed for bankruptcy in 2023, up from five in 2022 and 12 in 2021, BDO reports. Nearly one-quarter of apparel ordered online is returned, according to Coresight Research. And the average number of retail subscriptions held by subscribers dropped from 4.1 to 2.9 between March 2022 and February 2023, according to The Subscription Commerce Readiness Report. Yet some retail companies are succeeding. They’re doing this by, among other steps, providing seamless customer experiences across all channels, gathering information from disparate systems, and adeptly managing inventory and supply chain operations. INVENTORY MANAGEMENT Inventory management has become more challenging as many retailers expand the number of suppliers they use, as well as the nodes from which they fill orders. Along with distribution centers, many now use brick-and-mortar retail
locations, micro-fulfillment centers, and dark stores to fill ecommerce orders. This approach can speed delivery, boost the efficiency of last-mile logistics and offer better customer service, says Michael Needham, senior manager with Efficio, a procurement and supply chain consultancy. There’s a downside, however: greater complexity. Countering that complexity typically requires creating one source of truth and a centralized means of understanding the company’s inventory, says Deanna Kaufman, vice president of product management with Körber Supply Chain Software. The challenges around complexity become even more daunting when retailers offer products across multiple channels. Say a retailer has to decide whether to show an ecommerce shopper that a T-shirt in one of its physical stores is available. First it needs to know the likelihood the item may actually be in the shopping cart of a brick-and- mortar consumer, says Roy Bridgland, senior industry strategies director with Blue Yonder, a supply chain platform provider. If the store has only several of a fast-selling item, it may make sense not to show the item to online shoppers. To intelligently make these decisions,
retailers need to link their systems, including their ecommerce platforms, as well as the ordering, warehouse, and transportation systems, Bridgland says. Because any disruption or delay will have a knock-on effect, each link needs to be aware of any changes that might impact service. RED HOT KOHL’S At Kohl’s, the $16.6-billion retail chain, supply chain and fulfillment capabilities continue to evolve as a core competency, serving both stores and ecommerce customers, says Gregg Barta, Kohl’s executive vice president, supply chain and logistics. For several years, Kohl’s has been on a journey to introduce technology that improves the efficiency, quality, and speed with which it serves its stores and online customers, Barta says. Kohl’s six ecommerce fulfillment centers, 900-plus direct-ship vendors and more than 1,100 stores can provide same-day pickup and next-day or two-day shipping for more than two million items to the entire U.S. population. Kohl’s opened a new ecommerce fulfillment center in Plainfield, Indiana, in 2017 and another in Etna, Ohio, in 2021. These new facilities “enhanced Kohl’s omnichannel capabilities with state-of-the-art technology to maximize productivity and throughput,” Barta notes. Automated storage and retrieval systems (ASRS), and goods-to-person (GTP) technologies combine to eliminate handling touches and boost picking productivity when compared to Kohl’s generation-one facilities. ASRS and GTP bring items to associates, reducing the need for them to walk to pick orders, saving time and speeding the shipment of customer orders. Robotic Process Automation (RPA) also helps by more efficiently managing the SKU (stockkeeping unit) assortment in stores and online. Right-sized packaging technology creates custom boxes that are sized to the contents. This technology has slashed dunnage by more than half, Barta says.
New ecommerce fulfillment centers, equipped with automated storage and retrieval systems and goods-to-person technologies, enable retailer Kohl’s to fulfill orders more efficiently.
32 Inbound Logistics • August 2024
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