"Omni-channel" and "one-stop product management" in new retail

In the wave of new retail business, "omni-channel" and "one-stop management" have become two key concepts, which are of great significance to improving customer experience and optimizing supply chain management. This article will analyze in detail the connotation, development history, core characteristics and system support required for the implementation of omni-channel and one-stop management of these two concepts, to help readers deeply understand the operation mode of new retail business.

1. Sales channels in new retail business

In the new retail business, there are many sales channels. Different sales channels have their own business characteristics, so the corresponding marketing methods, operating methods, supply chain response methods, etc. are also different.

The more common sales channels are: store retail, selling goods in physical stores (including franchised and directly operated chain stores); e-commerce sales channels, selling goods on e-commerce platforms represented by Taobao, Tmall, JD.com, Pinduoduo, etc.; emerging traffic positions, selling goods on emerging traffic platforms represented by Douyin live broadcast, Xiaohongshu live broadcast, Kuaishou live broadcast, etc.; distribution channels, selling to 2B customers such as agents, distributors, etc. in various places;

The sales channels of new retail are very diverse. No matter which sales channel is used, the essence is to be consumer-centric and provide consumers with convenient, excellent and seamless shopping experience. Based on this concept and method, there is also a corresponding concept in the retail field: it is called "omni-channel retail."

2. What is omni-channel retail?

Omni-channel retailing is a retail strategy that aims to provide customers with a seamless shopping experience, no matter which channel they choose to interact or purchase through. This model emphasizes consistency and coherence across channels, ensuring that customers can enjoy the same high-quality experience whether they shop in physical stores, websites, mobile apps, social media or any other touchpoints.

Omni-channel does not mean that brands use all channels for sales, but that brands can choose, combine and integrate more channel types, so as to integrate channel advantages and share channel costs, and create a richer scenario-based consumption experience for consumers.

The development of omni-channel

Thierry Burdin, product retail director of French management software company Cegid, believes that omni-channel retail is the result of the evolution from mono-channel to multi-channel, then to cross-channel, and finally to omni-channel. Each stage is represented by a combination of brick, mortar, click and mobile.

• Single-channel retail: A model in which a brand sells through a single channel, such as the "factory-wholesaler-retail store-customer" model or through an online store.
• Multi-channel retail: A sales model in which a brand sells through two or more complete retail channels, such as physical stores and online stores, and completes the entire customer purchase process in each channel.
• Cross-channel retail: The integration of multiple channels enables each channel to complete part of the functions of the overall channel, such as placing an order online and picking up the goods at an offline store.
• Omnichannel retail: Brands integrate as many types of retail channels as possible to create a comprehensive shopping, entertainment and social experience for customers.

Excerpted from "https://www.youxin.cloud/23.html"

Omnichannel focuses on how multiple channels and customers interact with each other. A successful omnichannel setup can keep customer data and product data synchronized across channels. The ultimate goal is to provide customers with the greatest convenience and make every interaction between customers and brands in different channels a seamless experience. Omnichannel retail is sometimes called "seamless retail" or "unified retail."

Extracted from "https://36kr.com/p/1549635494872449"

3. What is the difference between multi-channel retail and omni-channel retail?

Although multi-channel retailing and omni-channel retailing sound similar, they are significantly different in their strategic goals and execution methods.

1. Multi-channel Retailing

(1) Core features

• Independent channels: Multichannel retail focuses on reaching customers through different sales channels such as physical stores, e-commerce websites, social media platforms, etc.
• Decentralized management: Each channel is usually operated independently, with different inventory, promotion and pricing strategies.
• Independent experience: Each channel may provide a different shopping experience, and customers may not necessarily have the same experience across channels.
• Target market: Each channel may target a different customer group or market segment.
• Data isolation: Data silos may exist between different channels, making it difficult to share customer information.

(2) Case description

Assuming a clothing brand operates in a multi-channel retail model, it may have the following channels:

• Physical store: A specialty store located in a shopping mall or high street.
• E-commerce website: a brand’s own online store. Third-party e-commerce platforms: such as Amazon, JD.com, etc.
• Social media: official accounts on TikTok, Xiaohongshu, Weibo, and bilibili.

Customers can shop on any of these channels, but each channel may have different promotions, prices, and inventory. For example, a physical store may have some limited-time discounts, while an e-commerce site may offer free shipping. Customers' experience is inconsistent between channels, and they may need to log in to different platforms separately to view information or complete a purchase.

2. Omni-channel Retailing

(1) Core features

• Integrated experience: Omnichannel retail emphasizes consistency and continuity across channels, ensuring that customers enjoy the same experience no matter which channel they shop.
• Shared data: All channels share the same set of customer and product inventory data to achieve a seamless shopping experience.
• Flexible delivery: Customers can start shopping in any channel and complete it in another, such as buy online, pick up in store (BOPIS).
• Personalized services: Provide personalized marketing information and services through integrated data analysis.
• Unified management: All channels are controlled by a unified management system to ensure a consistent brand image and customer experience.

(2) Case description

Continuing with the clothing brand example, assuming the brand adopted an omnichannel retail model, it would work like this:

• Unified customer experience: Customers receive the same prices, promotions, and customer service whether they shop in-store, on an e-commerce site, on social media, or over the phone.
• Shared Inventory: All channels share the same inventory pool, and customers can see in real time whether an item is available for purchase, regardless of where they are purchasing it.
• Flexible delivery options: Customers can choose to order online and pick up at the nearest store, or order in-store and have it delivered to their home.
• Personalized marketing: Brands collect data on customer behavior across channels to provide personalized recommendations and services, such as customized email marketing and social media advertising.

3. Conclusion

Multi-channel retailing emphasizes covering the widest possible customer base through different sales channels. Each channel may operate independently, and the customer experience between different channels may be inconsistent.

Omnichannel retail focuses on consistency and continuity across channels, ensuring that customers can enjoy the same experience no matter which channel they shop in, achieving truly seamless shopping.

The omni-channel retail model focuses more on providing a seamless customer experience, while multi-channel retail focuses more on covering a wider customer base through multiple channels. Omni-channel retail requires companies to have higher technical levels and more complex supply chain management capabilities, but it can also bring higher customer satisfaction and loyalty.

4. What is a batch of goods?

Omnichannel unified inventory is a retail supply chain management strategy, the core concept of which is to centrally manage all inventory resources of an enterprise to achieve unified inventory allocation and optimization. This strategy allows enterprises to flexibly allocate goods between different sales channels (such as online shopping malls, physical stores, mobile applications, etc.) to meet the needs of consumers in different channels.

Take a clothing retailer as an example. They may have multiple stores across the country and an online store. By implementing an omni-channel one-stop strategy, when a customer places an order for a piece of clothing online, the system will automatically check the inventory of all channels and select the nearest warehouse or store for delivery. Consumers can even choose to pick up the item at the nearest store. This not only improves the efficiency of inventory utilization, but also enhances the customer's shopping experience.

Simply put, the goal of having one inventory system for all channels is to meet the inventory needs of multiple sales channels in actual business by centrally managing inventory and uniformly scheduling and allocating inventory.

1. The core features of a single batch of goods

(1) Inventory sharing:

All sales channels can share the same inventory, ensuring real-time update and accuracy of inventory data.

No matter which channel the customer places the order from, they can immediately know whether the product is in stock.

(2) Channel sales:

Goods can be sold on any channel without restriction.

For example, customers can place an order online and choose to pick it up at the nearest physical store, or buy it directly in the physical store.

(3) Inventory optimization:

By centrally managing inventory, inventory resources can be allocated more efficiently, reducing inventory backlogs and out-of-stock situations.

Use data analytics to forecast demand and dynamically adjust inventory levels.

(4) Flexible delivery options:

Provide multiple delivery options such as order online and pick up in store (BOPIS), order online and deliver to home, return to store, etc.

Customers can choose the most suitable option based on their needs and preferences.

2. Practical Examples

Let’s say a clothing brand adopts an omnichannel inventory management model. Here’s an example of how it works:

• Customer places an order online: A customer browses a piece of clothing online and decides to buy it. The customer can check the inventory on the website and place an order after confirming that the product is in stock.
• Inventory allocation: Orders are assigned to the nearest physical store or warehouse that has the stock to fulfill the customer’s needs.
• Customers choose the pickup method: Customers can choose to order online and pick up in store (BOPIS), or they can choose to have the goods delivered directly to their homes.
• Inventory Updates: When a customer picks up their order or the item is delivered, inventory data is updated in real time, ensuring that other customers can see the latest inventory status.

5. What systems are needed for “one inventory across all channels”?

In order to achieve a single inventory, enterprises usually need a powerful information system to support inventory management, order processing, logistics and distribution, etc. These systems include but are not limited to:

• Order Management System (OMS): Completes inventory sharing and allocation according to inventory scheduling strategies, and centrally processes orders from multiple channels to achieve accurate inventory allocation, assignment of fulfillment warehouses and logistics, etc.
• Warehouse Management System (WMS): WMS needs to connect with OMS to complete the relevant interface docking to ensure that the inventory on the warehouse side and the inventory on the OMS side are consistent, and can also respond to inventory changes in a timely manner.
• Point of Sale System (POS): The POS system can handle both store retail business and store fulfillment business assigned by the upstream OMS system. That is, it can handle store retail, self-pickup, and store delivery.

The current mainstream practice on the market is to place the "inventory center" in the OMS system, and connect the OMS with the downstream WMS and the store's POS system. It can not only obtain order data from multiple sales channels, but also obtain inventory data of all stores and warehouses through interfaces and document processing logic. For related business processes and product architectures, you can refer to systems such as Shangpai OMS, Bojun OMS, and Yum! Brands Omni-channel Middle Office.

Assume that a retail company adopts an omni-channel inventory management model:

• Customer places an order online: A customer browses a piece of clothing on the website and decides to buy it. The OMS automatically checks the inventory system to confirm whether there is enough inventory of the product. If so, it locks the inventory and sends an order confirmation to the customer; if not, it may indicate that it is out of stock or provide a pre-order option.
• Inventory allocation: OMS selects the nearest physical store or warehouse for inventory allocation based on the customer’s location and inventory location, and pushes the order there.
• Picking and packing: WMS/POS instructs warehouse/store staff to pick and pack according to the instructions sent by OMS. At the same time, they also need to call the corresponding logistics provider for door-to-door pickup according to the logistics method specified by OMS.
• Logistics and delivery: The logistics provider plans the optimal delivery route based on the delivery address and schedule selected by the customer (the logistics delivery details are often handled by the third-party logistics provider).
• Inventory update: When the goods are picked, the inventory center will update the inventory data in real time to ensure that other customers can see the latest inventory status.
• Customer pickup or delivery: Customers can choose to order online and pick up in-store (BOPIS) or have their orders delivered directly to their homes.
• Data analysis and optimization: DAS and BI systems collect order data, inventory data, logistics data, etc., analyze them, and provide decision support for enterprises, such as adjusting inventory levels and optimizing logistics routes.

Through the efficient collaboration of these systems, enterprises can achieve efficient management of all channels and improve customer satisfaction, while reducing inventory costs and improving supply chain efficiency.

6. References

In the new retail business, we can hear the terms "omni-channel" and "one-stop shopping" very frequently. However, the definitions and explanations of these concepts in the market are also different. As a result, some newcomers will be very confused when they first learn about this business knowledge. It seems that the definitions are very high-sounding, but the actual output solutions are not so high-sounding...

This article quotes a lot of external information and AIGC content. On the one hand, I am also confused by these terms and concepts, so I hope to use some slightly authoritative or convincing cases to answer these doubts. On the other hand, articles about concepts and noun definitions are more difficult to write, and the choice of words and sentences are time-consuming and laborious, so I just "stand on the shoulders of giants" and hope that everyone can understand.

The following are some of the sources cited in this article. Interested friends can read the original text in detail to have a deeper experience.

https://36kr.com/p/1549635494872449

https://www.youxin.cloud/23.html

https://sleekflow.io/zh-cn/blog/omnichannel-marketing

https://www.shopex.cn/news/archives/16674.html

https://merchants.ubereats.com/us/zh/resources/articles/what-is-bopis-buy-online-pickup-in-store/