With Omni-Channel Strategy paying off for retailers, rethinking the entire retail model holistically with building blocks like brick and mortar sales, curb-side pickups, online shipments, supply chain management, returns and warehousing, can the retailers use strengths of each segment and try to overcome the weakness of the other? Applying the ‘out of fashion’ SWOT analysis technique? We came up with the following:
Strengths of each retail building blocks when combined:
- Brick and mortar: Space + Proximity to customers + Display and warehousing + Walkins + Experience + Pickup + Accepting Returns
- Online: No boundaries + Central Inventories + Customer retargeting + Delivery Options + Cross Sell
- Supply Chain: Economies of Scale + Just in time inventories + Proactive Re-ordering + Efficient Forecasting + Optimum Logistics
- Warehousing: Display Warehousing + Central Economies of Scale + Automation + Inventory tracking
- Staff: Multi-dimensional responsibilities + Efficiency + Customer Engagement
If we add all these strengths and combine them, then brick and mortar retailers can potentially convert all retail outlets into eCommerce warehouses and combine the two channels to optimize supply chain and warehousing functions. This will give customers much more flexibility in purchasing, shipment and pickup options.
Below is an extract on how Inditex SA (Zara’s parent company) innovated during Covid Pandemic.
‘A few weeks after Spain declared a nationwide lock-down in mid-March to fight the growing corona-virus outbreak, clothing retailer Inditex SA began running low on goods.
The world’s largest fashion retailer typically operates a lean warehouse operation, preferring instead to hold the majority of its stock in stores that double as e-commerce fulfillment centers. That way, turnaround is faster, shelves are replenished more regularly and inventory is kept to a minimum.
But with about 3,500 stores worldwide closed, this carefully balanced just-in-time cycle of goods was reaching breaking point. By April, Inditex sent out an unusual request to employees, seeking volunteers to retrieve clothes and accessories left in stock rooms and on shelves in the hundreds of Zara, Massimo Dutti and other brand stores to fulfill e-commerce orders.
In the Post Covid Era, combining the strengths of Supply Chain and adopting an agile way of working is the way forward. If an organization is not already doing this, then following needs to be done moving forward:
- Own and Competition trend analysis (pre Covid and during Covid era)
- Plan Post Covid Strategy after SWOT of entire Sales and Supply Chain Building Blocks
- Assess key re-alignment of resources
- Retraining the staff
- Deployment and tracking data Vs benchmarks
- Tweak and improve
Supply Chain is critical, collaborative forecasting planning and replenishment will be the key. The information-sharing and other processes with suppliers are key to the success in this new era. Retailers must regard their suppliers as partners and share with them their successes and their failures. Synchronizing the entire ‘Chain’ end to end is the key.