Retail Innovation Down Under: Omni-channel
I just returned from a 2 ½ week series of executive meetings with many of the leading retailers in Australia and New Zealand, and there was a common theme that surfaced at each account: omni-channel.
Whether the client was just formulating their omni-channel strategy or in the process of making it happen, every company had omni-channel as a foundational component of its future vision for their business. By comparison, while some of the North American retailers with which I meet are just learning about omni-channel and its potential for redefining the brand experience for their customers, every one of the retailers I met “down under” considered it a fait accompli.
One particular company stood out for forward thinking and the initiatives they’ve put in place. This significant grocery retailer has taken store fulfillment of online orders to a new level. In contrast to the minimal numbers of grocers that embrace e-commerce in North America, this client considers cross-channel fulfillment of online orders a done deal. Their customers can order online and pick up their order in a store. They can order online and have the order delivered to their home within a scheduled delivery window. Or, they can pick up their order from a refrigerated locker for which they were provided a one-time access code when they completed their order online.
All of this places them eons ahead of most North American grocery retailers, but they’ve not stopped there. Recognizing that it’s not just about what you make possible for the consumer, in true Smarter Commerce fashion, they reviewed the backend processes necessary to efficiently support such a service. With that perspective, they’ve used technology and process innovation to ensure that they can deliver this fulfill-from-store capability with minimal impact on store operations and while maintaining a high level of quality and consistency for their customers.
For example, this retailer has created picking carts that can be effectively used in store aisles to guide order pickers through the store to pick multiple orders at the same time. The carts guide them to the proper location, show a picture of the item to be picked and list the quantity to be picked, keep track of each of several in-process orders, and even provide tools to help pickers answer ad hoc questions that they may get from shoppers while on the sales floor. These cleverly-designed tools ensure minimum pick time, maximum order accuracy, and optimal store associate utilization.
Once filled, each order tote is either routed to a reserved pickup area in the store or to a delivery truck—where the totes are loaded in a last-in-first-off order for efficient delivery to homes or refrigerated lockers. And, en route to their destinations, delivery trucks proudly advertise the retailer’s ability to allow customers to order online and receive in-home delivery.
What I found interesting about my meetings with grocers in Australia was that each one was looking to enable fulfill-from-store capabilities for online orders. It turns out that it’s a matter of financial practicality for most Australian retailers because of the geographic disparity of their population centers—it’s a long way from Sydney to Perth. And, shipping costs are prohibitive. So, Australian retailers immediately recognize the importance of stores as sources of fulfillment for online orders. By comparison, the majority of North American retailers have only just begun to talk about enabling ship-to-home from stores.
As is so often the case, viewing the world of retail from an alternate perspective was both enlightening and inspiring. It also illustrated an interesting dichotomy. On one side of the world, many retailers are wringing their hands over the potential disruption in store operations that fulfill-from-store might have on their brick-and-mortar processes. Meanwhile, on the other side of the globe, retailers view it as a way of life and are busy perfecting the process. It just goes to show that there are often valuable lessons to be learned outside of your own backyard.
For those of you interested in hearing about how other retailers have identified and approached their process challenges, I urge you to join us in Tampa, Florida for our annual Smarter Commerce Global Summit, May 12-15, 2014. It’s an excellent opportunity for interacting with seasoned practitioners, hearing about innovative strategies, and learning about the latest tools in the industry.