The retail landscape has metamorphosed with many brick-and-mortar retailers adding an Internet shopping-component to their offering says Debasis Daspal
Sudarsana was elated when she found her favorite brand of fashion item in the shop, and she purchased it. After a fortnight, she was surprised to receive fabulous offers from the same brand at discounted rates, that too on her pet accessory items! She was truly amazed to find how the company knew her tastes and choices.
This is not a fantasy. It has become a reality with e-retailing in apparel and accessory supply chain. Wal-Mart, K-Mart, Target, Barnes and Noble, Sears are some of the few click-and-mortar giants. For example, if a woman spends a certain amount on her favourite lingerie at Sears, the world-famous retail joint, she will receive notices of any sales on other fashion costumes. The trick is that when a customer shops using a Sears Card, details about the purchase and the customer are stockpiled electronically. This data warehousing permits Searss marketing people to target promotions to a more receptive group of customers.
True, promotional marketing in the apparel chain has attained a new dimension with e-tailing, the electronic counterpart of retailing. Manufacturers and retailers now target consumers directly with attractive offers. Using credit or charge card to buy clothes triggers clockwork of activity in retail. These activities range from automatic stock replenishing, which refills the stores shelves, to alerting a distant manufacturer to turn out more clothing. However, as manufacturers and retailers more closely scrutinise individual customer tastes, habits, and buying patterns, they opt for a direct route to consumers. Instead of waiting for consumers to visit their stores, retailers may simply send them target e-mails, offering deals too good to refuse. The rise of automatic customer replenishing as retailers begin to restock consumers closets, instead of their stores.
Wal-Mart, the worlds largest retailer, successfully incorporates this e-retailing in its supply chain through electronically enabled stock replenishment. The result is dramatic. It offers shoppers more than a 98 per cent chance of finding a complete selection from its diverse collections!
Supply chain strategy is also redefined as a result of going online. Click-and-mortar retailers have changed their strategy of stocking in their various warehouses. High volume products, that is, basic apparels whose demand can be accurately matched with supply based on long term forecasts, are stocked in local stores. And low volume fashion items are stocked centrally for online purchasing. The latter products have highly uncertain demand levels and thus require high levels of safety stock. Centralised stocking in this case effectively reduces uncertainties by aggregating demand across geographical location and thus reducing inventory levels. As e-retailing has pushed the boundary of apparel and fashion business in the forward direction to establish direct links with consumers, it also integrates the back-end manufacturing and sourcing operation with real time information sharing about what consumers are buying. This enables vendors and suppliers to plan proactively in response to real-time demand. The upshot is that orders are filled quickly; stock is made as it is needed, and there is no need to waste revenues, as stockpiling unsold goods in physical warehouses is avoided.