Smart retailers are realizing that their increasingly complex omnichannel offerings have made strong supply chain management more important than ever. Retailers need to handle inventory in stores and distribution centers, keep an eye on both digital and physical shelves and keep costs down with efficient logistics and routing. Industry experts gathered at Manhattan Momentum 2023 in Phoenix to discuss their approaches to these various challenges.
Retail TouchPoints spoke to several companies in attendance, gaining insight into topics including:
- How Hot Topic is using inventory management to enable precise delivery windows and conversion-driving BOPIS experiences across its wide assortment;
- Why Lamps Plus finds it vital for its entire management system to be integrated into every step of the customer journey, even the POS; and
- Why Manhattan sees the evolution of supply chain and inventory management increasing the value of the in-store experience.
For Hot Topic’s Young Customers, ‘It’s All About Breadth’
At Hot Topic, two factors put additional pressure on an already complicated supply chain. The retailer serves a young, digitally savvy customer with no time for delays, and offers a massive selection of merchandise that needs to keep up with shifting pop culture trends. The retailer has been working with Manhattan for over a decade to help it keep up with its customers’ needs.
“We’re really focused on the 16 to 20 year-old age group or even younger,” said Mike Yekkes, COO at Hot Topic in an interview with Retail TouchPoints. “They are at the cusp of all things digital, which drives us on everything, from payment options to search — and ultimately, from a merchandising platform standpoint. Our customers are looking for a lot of different offerings and products, and they come to our site where we have hundreds of thousands of graphics and styles and categories. We also offer a dropship program, all driven through the platform. For our customers it’s all about breadth.”
Hot Topic has found that predictability — not necessarily speed — is among the most important aspects of the customer experience. The retailer has seen digital sales shift away from next-day deliveries, which now account for just 18.2% of orders, toward two-day or later windows, which account for 80%. Three- to four-day delivery windows are the most common, but the retailer still relies on a strong software backbone to ensure that an order promised to arrive in three days doesn’t come in four.
Another key challenge for Hot Topic’s inventory management system is ensuring its BOPIS options run smoothly even as it fulfills orders across multiple channels. The retailer is putting a heavy emphasis on driving BOPIS growth, with the goal of increasing penetration from 11% to 15%, and with good reason — the retailer sees a 30% conversion rate from shoppers who visit its stores. The company leans on its omnichannel fulfillment software to ensure these transactions run smoothly.
“From an active omni standpoint, [Manhattan’s platform is] our hub of understanding for how we fulfill our orders,” said Yekkes. “It manages our BOPIS component. We also have a heavy ship-from-store side, and it also drives our curbside pickup component. So that’s our main hub around making these decisions, and it really allows us to ensure we’re properly flowing throughout our supply chain.”
Lamps Plus Consolidates Data Throughout the Experience
While Lamps Plus serves an older demographic than Hot Topic, the home décor space means that it’s just as important to offer a wide variety of options so that every customer can find the perfect piece for their tastes — as well as offering tools to help them find that item. Additionally, its products are often delicate and heavy, which makes getting delivery right paramount for a good customer experience. As a result, it’s vital for the retailer to have deep insights into what is available and where it is located.
“We try to help the customer identify what they’re looking for and make it available to them while providing a good customer experience,” said Clark Linstone, President and COO of Lamps Plus in an interview with Retail TouchPoints. “When we’re getting the product to them quickly, the source can be from our distribution centers or our vendors. The main thing is that they’re happy with the purchase. We recognize that if they’re happy the chance of them coming back and buying more products from us are very high, but if they’re displeased with the experience our chances are significantly diminished.”
Properly curating a great experience requires all the Lamps Plus systems — from search to last mile —to work together in tandem. This includes the POS, which is powered by Manhattan’s order management system. Shoppers want to feel reassured when making an expensive purchase, and Lamps Plus strives to make sure the checkout leaves customers feeling confident.
“They expect the experience to be the same across channels [and] expect us to know what they bought online and in the store,” said Linstone. “All of that stuff has to be together, so when they get to the POS, it needs to be able to handle everything. We need to make sure it’s seamless. Being connected is vital to providing the right customer service.”
Manhattan Expects the Store to Take Center Stage
Even though fulfillment remains top-of-mind for retailers, supply chain initiatives are increasingly focused on the store as well. Shoppers are continuing to return to their old brick-and-mortar habits after years of the convenience of online shopping, and many companies are exploring ways to optimize their inventories in order to create physical experiences that can stand out from the crowd.
“We’re hearing a lot of retailers exploring the future of the store experience,” said Ellie Crawford, Director of Product Management at Manhattan Associates in an interview with Retail TouchPoints. “How do we improve the store with the balance inventory carried? What can we do to improve the fitting room experience? I think retailers are considering it a lot more holistically now. They’re looking to differentiate that in-store experience.”