CONTEXT identifies omnichannel opportunities
by Stuart Wilson, Friday 17 February 2017
Research house CONTEXT will deliver a keynote speech as part of next week’s DISTREE EMEA regional channel event in Monaco. In the run-up to the event, CONTEXT has identified five key distributor opportunities in an omnichannel world. For today’s consumers, omnichannel is their ’new normal’, according to CONTEXT. They now shop and purchase anytime and everywhere. What this means for traditional retailers is that they must become more flexible and ‘seamless’.
This creates a ‘perfect storm of opportunity for distributors to play a strategic role in helping retailers to increase assortments, responsiveness, and fulfilment of the ’last mile’ all the way to the customer’s door when they choose not to come to the store.
CONTEXT has been working throughout Western Europe to develop insights and analytics required to optimise omnichannel retail. CONTEXT recently surveyed top executives from 30 of the top technology retailers in Europe. More than 90% of executives surveyed reported that omnichannel is either critical or very important. to the survival of their business.
CONTEXT stated: “What is significant for distributors is that traditional retailers are realising that they don’t have the infrastructure, resources and omnichannel capabilities to compete with the likes of Amazon. They also realise that omnichannel consumer expectations are rising in terms of demanding more choices in assortment and delivery options.”
The top European retailers in the CONTEXT Omnichannel Survey were questioned on their top priorities for investment and developing strategic partnerships. More than three quarters of respondents identified the search for partners and resources related to systems as a priority. What is significant are the other priority areas where distributors can play key roles: logistics, distribution, local delivery, warehousing, inventory management, follow-up services and even analytics.
New distributor opportunities
In many ways, the role of distributors was historically defined by warehousing products and shipping bulk quantities to retailers, according to CONTEXT. While distributors are still the bridge between manufacturer and retailer, omnichannel consumer behaviours are creating new opportunities for distributors. In a very real sense, omnichannel is requiring both retailers and distributors to think in terms of ‘mass distribution’ customised for single products to individual consumers.
Retailers do not have the infrastructure, systems or resources to do it all. They need strategic partnership from distributors, who can offer solutions beyond just holding inventory or shipping pallets to stores. Omnichannel can be the perfect storm of distributor opportunities.
Omni-retailers are searching for partners in at least five key areas, according to CONTEXT:
1) Drop shipments: More long tail SKUs online will require partnership for rapid fulfillment direct to consumers without dramatically increasing inventory.
2) Rapid replenishment for ‘click and collect’: All stores have limited back stock so they require rapid replenishment for volumes generated by online purchase and in store pickup. Real time inventory tracking is also a key click and collect requirement.
3) Precision delivery in time slots: It’s not just about speed of delivery, but customers requiring specific delivery when they are home.
4) Click and collect at lockers: Delivery to pick up lockers helps solve timing as well as convenience for commuters.
5) Returns and reverse logistics: Increasingly consumers are purchasing online but returning to stores. Retailers need assistance with controls and reverse logistics.
Chris H Petersen, CEO of Integrated Marketing Solutions and strategic partner at CONTEXT, will deliver a keynote speech at DISTREE EMEA on Thursday 23rd February at 09:35-10:05.