Omnichannel’s Ugly Side

An omnichannel platform gives consumers and businesses the ability to shop anywhere and at anytime, but this presents a unique challenge to the sellers expected to satisfy the demand for products across channels. PYMNTS sat down with Ahin Thomas, head of marketing at Symphony Commerce, to learn more about how businesses can better improve supply chain management to thrive in this new retail world.

PYMNTS: Retailers’ supply chains generally are not optimized to support the new omnichannel environment. In your opinion where does product fulfillment and omnichannel intersect?

AT: Inventory management is the real unlock here. If inventory can be managed both upstream as it’s coming in as well as be virtualized, then true omnichannel fulfillment can be achieved. But what does virtualized inventory really mean? For example, if there are 100 units coming in, but the inventory is being managed over four warehouses, well that presents a problem in managing the balance. On top of that, those units may be bundled in certain packages or kits. If inventory is tied up in a specific way, then a business is fundamentally unprepared for the omnichannel world.

Pre-assembled physical kits of inventory go against the omnichannel mindset because someone may only want Product A but not Product B. These decisions must be made on the business end, rather than while looking at a physical pile of inventory and realizing there is not enough. This is why we believe unlocking the omnichannel platform starts with virtualized inventory.

PYMNTS: With consumers and businesses both able to shop virtually anywhere, are sellers prepared to deal with stocking and restocking, and are buyers prepared to efficiently return items?

AT: I think that’s a massive problem in retail in the broadest sense today. There are two approaches to answering the question. First, if a business is purchasing products, it needs systems and capabilities to not only accurately predict when those products are coming in but also confirm reorder times. In times of extreme demand surges, this is key. Great brands are able to create demand from their products and their storage helpings. By truly understanding the restocking time in the entire supply chain, businesses are better equipped to capture and maintain that momentum.

From the buyer’s side of this, there is an idea that products are going to flow in, but they may need to flow in according to certain specifications. Whether that’s fully packaged pallet-sized or in no less than 12 individual boxes, considerations may also have to be made if the goods must be sent to various locations. When thinking about our end consumer, they always expect the most out of us.

Thanks to the elephant in the room, Amazon, consumers expect if they place an order today and its in route tomorrow, it will get to them the next day. That is the expectation now. What the rest of us need to do is have the systems and processes in place that will deliver results to meet, but hopefully surprise and delight, those expectations. Whether or not the expectations are “fair” is actually quite irrelevant to what we need to accomplish.

PYMNTS: What additional challenges has omnichannel created for sellers, and how can these issues be overcome?

AT: Fundamentally, the biggest challenge we all face today is rising expectations. It comes back to inventory because with virtualization we’ll get the highest throughput. Order fill rates are a beautiful thing. Another significant aspect of this is how we actually think about running the central transaction. For a producer of goods working directly with resellers, by definition, each reseller must be treated differently because they have specific conditions set around pricing, minimum orders, etc. To the extent that the producer’s team has to manually intervene on those orders could be the same extent to which they may fail.

At Symphony we recognize many people see eCommerce as just the website used to perform direct-to-consumer business. But it’s not about eCommerce; it’s about commerce. If businesses are going to invest to put their product catalog, information and ordering capabilities onto the Internet, then the Web store itself should be exactly that, an omnichannel store. Yes, it must excel at B2C, but it also has to handle quite literally every channel.

In the ’90s when eCommerce started, it was such a magical thing. Now, we have reached an incredible point, and the people who have come before us have done the heavy lifting and quite literally realized the power of the Internet. But it’s no longer a shiny new toy; it’s part of our business, and it must be treated like that.

What problems do you solve?

AT: Very specifically, Symphony Commerce works in what’s known as Commerce-as-a-Service. What that really means is we are the complete set of technologies that exist to remove all commerce-related obstacles that stand in the way of brands connecting with their customers, regardless of size. Of course, part of our platform is providing websites, hosting, inventory, and fulfillment but we think that the magic of Symphony is that it is a vertically integrated stack. And each piece of our platform seamlessly talks to one another, while maintaining independent utility.