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Making Omnichannel Operations Profitable

Cognizant Making Omnichannel Operations PROFITABLE As retailers build new shopping and shipping capabilities to delight customers across touchpoints and keep pace with competitors, they face huge fulfillment challenges that impact the bottom line. THE LURE OF E-COMMERCE Online sales as a percentage of overall retail volume is projected to continue at a rapid clip. But while the top-line is growing, bottom-line is not. Retail E-commerce Sales Worldwide, 2013-2018 $2.489 $2.197 $1.888 !! $1.592 $1.316 $1.077 22.2% 20.9% 25.9% 18.6% 16.4% 13.3% 6.7% 7.4% 8.2% 8.8% 5.1% 5.9% 2013 2014 2015 2016 2017 2018 RETAIL E-COMMERCE SALES IN TRILLIONS % CHANGE % OF TOTAL RETAIL SALES To deliver on e-tailing's potential, retailers must optimize their supply chains to make omnichannel operations profitable OUR ADVICE FOR ENHANCING E-TAILING PROFITABILITY: REASSESS SUPPLY CHAIN & FULFILLMENT NETWORK • Alternate supply nodes • Create or convert a facility to an omni-building Checkout • Returns strategy EMBRACE INTEGRATED INVENTORY PLANNING & INVENTORY SHARING • Single identification of product • Omnichannel sales in demand forecasting • Multi-echelon fulfillment planning • Inventory-sharing related policies SEEK STRUCTURAL REALIGNMENT THROUGH STRATEGIC PARTNERSHIPS • Drop ship vendor and marketplace • Partnerships for last-mile delivery • Collaboration RETHINK THE ARCHITECTURE • Cloud-based architecture • Integration strategy • Enhance efficiency THEN ... BUILD A STRATEGY THROUGH ROI-DRIVEN BUSINESS CASES Understand the impact of every omnichannel initiative on: CUSTOMER EXPERIENCE REVENUE Assess the readiness of current supply Construct a business case for each MARGIN chain capabilities in relation to total omnichannel initiative and calculate the ROI omnichannel capability PUTTING IT ALL TOGETHER: A CASE IN POINT THE CHALLENGE OUR SOLUTION -...... A leading specialty brand footwear retailer • Craft the omnichannel vision and requisite • Leverage our Omni-Calculator to quantify sought to improve omnichannel capabilities. business capabilities. the potential ROI of omnichannel Unfortunately, the retailer's existing inventory capabilities and initiatives. management process didn't effectively utilize • Identify people, process and technology inventory at all facilities. gaps and create a capability definition to support the future state. RESULTS The top two omnichannel business • Once optimized, these business capabilities, prioritized based on ROI, were: ROI = +497% capabilities are expected to IDENTIFY CAPABILITIES have ROI of 303% and 117% 7 8 • Returns inventory for available to over next four years if QUANTIFY BENEFITS promise (ATP). implemented separately; and ESTIMATE COSTS 2 3 a cumulative ROl of 497% if • Clearance inventory for markdown implemented simultaneously. optimization. Visit to learn more about our omnichannel capabilities and thinking. SOURCES KEEP CHALLENGING" O Copyright 2016, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopy- ing, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice.

Making Omnichannel Operations Profitable

shared by cognizant on Apr 30
Conventional wisdom suggests that the ability to deliver consistent omnichannel experiences separates retailing’s leaders from laggards. Getting there, however, requires retailers to rethink and rev...



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