Peter Blom, Founding Partner The retail sector has always been competing with the e-commerce industry. In doing so, retailers often end up adopting strategies copied from the e-commerce pure-players to facilitate their own e-commerce channels. But the pure-player tactics do not align with the traditional retail operations resulting in increased operational expenses (OPEX) and the involvement of additional resources. “Retailers won’t win the race by copying the e-commerce pure-player tactics. Instead, they need to capitalize on their existing workflows and resources. Workflows that maximize the use of their store networks,” elaborates Peter Blom, the founding partner at Retail Unity, “For instance, through ship-from-store tactics and optimized return handling at the stores.”
Netherlands-based Retail Unity services retailers all over Europe. The platform provides retailers with a strategy that increases their digital turnover while lowering OPEX. “A win-win result that sounds like a sales pitch at first, but becomes plain logic after explaining the business logic behind the system,” says Blom. The Retail Unity platform acts as a distributed order management (DOM) solution, and the benefits are experienced in three different stages.
The first stage is to combine all stock from the stores and DCs into a single virtual stock repository. This stock repository is offered on all digital channels like the website(s) and in-store sales tablets. This ensures that the retailer never loses a sale as they have the ultimate endless aisle in which everything is always available. “Retailers experience an instant increase in their digital turnover through the increased width and depth in the assortment,” says Blom.
The second stage is to distribute the digital orders over all stock locations through algorithms which micro-manage every stock movement in favor of the retailer. For instance, they do this by taking into account the local turnover rate or by utilizing ship-from-store flows to clear broken size-ranges but also by steering returns to the ideal location.
Retailers should look at their return flow as potential ‘free replenishment’ for their stores. Our solution steers individual returns to the ideal location
“Retailers should look at their return flow as potential ‘free replenishment.’ Our solution steers individual returns to the ideal location,” explains Blom. This lowers traditional OPEX like replenishment costs while minimizing the expensive return handling at the DCs.
The third stage is found in the business intelligence that is collected by the algorithms. The platform analyzes all orders and creates a geographical representation (heatmap) of the local demand. Retailers use this information to customize the assortments in stores and DCs, not only during the initial distribution to the stores but also before the redistribution/ replenishment runs at the end of a season, all without adding OPEX. The platform uses the micro-management distribution engine to make instant small changes to the stock levels throughout the season. “Retailers will get far more value from their existing logistics costs and resources,” says Blom.
The company’s DOM platform has proven its versatility by servicing a wide variety of retailers, all with their unique challenges. One of these clients is a Netherlands-based retail franchise operation called Intratuin which supplies do-it-yourself (DIY) garden equipment. Their stores are, in a way, competing among themselves. This is a challenge that all franchise organizations experience when considering an e-commerce model. Retail Unity helped Intratuin through a unique solution whereby the margin of an item is split among all the stores involved in an order. This approach provided Intratuin to venture into the e-commerce ecosystem without cannibalizing the individual franchisees.
As an omnichannel retail solution provider, Retail Unity offers a unique business methodology to retailers, which is implemented without altering or replacing any of the existing POS, e-commerce or ERP systems of a retailer. This simplifies the implementation which, on an average, is fully operational within five months. Moving ahead, Retail Unity will be expanding its reach to Asia and the US. The company is also looking into strategic alliances to scale their presence geographically.
