Key Takeaways from Supply Chains for Omnichannel – The Digital Supply Chain Strategy for Omnichannel Distribution
Delving into the importance of digitalisation for supply chains and distribution in the age of e-commerce and omnichannel retail, the focus group today comprise of omnichannel players, e-commerce enablers, and logistics and distributors in ASEAN, including AEON Indonesia, blibli.com, DHL e-Commerce, DKSH, MYDIN, PT Matahari Department Store and SingPost e-Commerce. Together with IBM, today’s AIBP Focus discussion explored perspectives from different stakeholders involved in the omnichannel strategy.
Highlights of the session were Pivoting from Brick-and-mortar to Omnichannel, Ensuring Cost-effectiveness Amidst Excellent Customer Experience, as well as Enabling the Omnichannel Shift.
Pivoting from Brick-and-mortar to Omnichannel
Common points brought up about pivoting to omnichannel during the discussion include having a clear view of what the business needs, and starting small by shifting gradually from brick-and-mortar to multichannel and finally to omnichannel.
Sandra Louis, Head of e-Commerce, MYDIN, shared how the COVID-19 pandemic triggered MYDIN’s shift to e-commerce which involved a lot of trial and error on their part. Having initially relied on manual means, the retail chain realised the need for ERP and management systems for inventory management and store operations when they received thousands of orders.
Beyond implementing the required digital solutions, the integration of the different systems will enable visibility of the supply chain. Sreekanth Chetlur, Head of Digital, PT Matahari Department Store, mentioned that API integration between ERP systems and the various POS systems across all stores and e-commerce channels took some time.
Besides traditionally brick-and-mortar retailers, distributors have also embarked on the omnichannel shift. Having dealt primarily with b2b distribution, DKSH began to offer d2c services by using existing stocks. Joseph Reid, Regional Senior Executive manager, e-Commerce, Supply Chain, DKSH, shared that this required them to build the capability to shift the structure of their warehouses and staff to adapt to omnichannel distribution. He also highlighted the importance of cost-effective deliveries while maintaining the quality of products and services. In terms of delivery requirements, Anil Gautam, Managing Director, DHL e-Commerce, highlighted the importance of educating their customers on proper packaging, labelling and delivery requirements for different products to ensure smooth deliveries for customer satisfaction.
Enabling the Omnichannel Shift: Buy or Build?
Sreekanth pointed out that the omnichannel strategy is two-way. Enterprises need to attract the right traffic (customers) while ensuring that back-end processes are optimised, both of which must be run in parallel.
A key question to consider for brick-and-mortar as they adopt omnichannel strategies would be: “To buy or to build?” E-commerce enablers and logistics solution providers provide customised solutions for different enterprises to move towards e-commerce.
Santosh Kumar Singh, Director of Product Management, blibli.com, shared that blibli had initially built a stack around online businesses, but shifted to address omnichannel requirements to provide a frictionless experience across different channels - as they began onboarding traditional retailers.
Santosh highlighted that blibli.com builds network partnerships with local providers in Indonesia where logistics is complex, and expertise and requirements are localised in different regions for different customers. In a similar vein, Zain Suharwardy, Head of SingPost e-Commerce, SingPost e-Commerce, mentioned that as an e-commerce enabler, they have a technology deck that eases the e-commerce shift with plug-and-play solutions to suit different strategies requiring different systems.
Joseph summarised the world-class omnichannel supply chain as one that delivers what the end-consumer requires while maximising cost-effectiveness. DKSH supports this with their agility and ability to provide services for their clients.
Addressing how the size of an enterprise affects the type of solutions to adopt in the omnichannel shift, Pankaj highlighted that the key lies in identifying business benefits - What am I trying to solve? Does it make sense for me to invest? What kind of ROI am I looking at? He also pointed out that technology is not the be all and end all, and that equipping employees with the necessary skills will be a key success factor, which was something Zain brought up as well.
Ensuring Cost-effectiveness Amidst Excellent Customer Experience
In addition to acquiring the necessary digital solutions and skill for omnichannel retail and distribution, the core of consumer-facing enterprises lies in providing excellent customer experience, while ensuring costs and ROIs are justified. Pankaj shared how a business case on the benefits and projection of returns will justify the costs of digitalisation for the omnichannel supply chain. Joseph believes that as long as there is visibility of the supply chain from start to finish, cost-efficiency will follow.
As Zain sums it up nicely, “the value you give to customers is the ‘wow’ factor for the customer”. He believes that in the next few years, those who prioritise customer experiences will benefit the most, and to make money, a business will have to invest. Adding on the necessity of the omnichannel pivot, Anil highlighted that the question is “Not the when and how, it’s the right now”. He brought up an example of how a fast-fashion brand that provided seamless inventory visibility and convenient collection options could increase orders from omnichannel retail.
Enhancing customer experience and personalisation will also aid in addressing the tough competition among retailers and distributors today. To Sreekanth, ensuring excellent engagement levels with CRM and loyalty programs remains important regardless of whether it is brick-and-mortar or omnichannel. Raissa Cathlin, e-Commerce Category Manager, AEON Indonesia, shared how AEON categorises its products based on customer demand from its various online channels and looks to expand its reach with partnerships. In addition to product offering, for Sandra at MYDIN, the omnichannel strategy requires them to do extra for their online customers and transactions - in-store staff are educated on customer communications, and products that customers wish to buy will be listed online for their convenience.
We will continue our conversation on omnichannel and e-commerce retail next week, focused on the customer experience component of the omnichannel strategy at Customer Experience for e-Tail: Communicating Your Way to A Happy Customer next Tuesday, 15 June 2021. Do reach out if you wish to join us, or if there there topics in digitalisation you would like to hear more of!