Despite generally serving a smaller number of customers, luxury brands are far from immune to the need to modernise information and distribution systems to meet omnichannel logistics requirements. In fact, customers of luxury brands are frequently some of the most demanding, with expectations sky-high for every aspect of their purchase: from the quality of the item or service itself to the process of buying it.
For brands, meeting these expectations typically means reducing the number of or eliminating failed orders and, at the same time, improving inventory management at numerous points-of-sale and warehouses. Yes, warehouses!
Once, almost all aspects of customer experience revolved around physical stores. Luxury brands, in particular, typically invested heavily to ensure that their physical stores delivered a completely on-brand experience. Unsurprisingly, perhaps, many luxury brands were hesitant to join the e-commerce game, feeling that their products and their brand were not a good fit with such a model; how, for example, would it be possible to replicate the high-end customer experience offered in-store.
Now, however, the switch is done: digital channels, whether served through stores or warehouses, are as essential as stores. This adds a layer of complexity to inventory management, to order fulfilment - and to keeping promises made to customers. No would-be luxury customer wants either a completely failed order or a delayed one; they want their purchase here, and they want it now.
For luxury brands, the means of achieving these twin goals include:
- having a single administration platform for the entire process, from ordering to stock management;
- decommissioning and replacing existing, often-heterogenous tools and solutions, and integrating new ones (adding further complexity to an already-complex project);
- offering a better user experience - whether to customers, internal users, or stakeholders that make up the luxury supply chain.
A high-performing OMS is the perfect foundation for delivering these goals in an omnichannel world. Here are five reasons why:
An OMS adapts to your processes, not the other way round
To be a successful, transparent successor to obsolete systems, any new administration platform needs to address the precise needs of the luxury brand it serves, incorporating the stakeholders that make up its supply chain.
A good OMS enables you not only to follow existing finely-tuned functional processes as closely as possible, but will provide endless flexibility to meet future requirements, well beyond what your business can currently predict. With the right OMS partner, you may even improve your existing processes, using your provider’s knowledge both of your market and of supply chain “best practices”.
Keep your promises to customers
A good OMS provides a centralised view of your inventory, and enables the optimisation and automated processing of omnichannel orders. An OMS will aggregate stock-related data at different geographical levels and provide an accurate overview of product availability. Using dynamic business rules management set by the retailer (depending on its priorities), an engine can then suggest automated Available To Promise (ATP) calculations based on these stock-related data. Rules can encompass multi-sourcing for orders received from different sales channels; or optimising transportation costs; or stock rotations by transferring stock between different points of sale.
Prioritise VIP clients
On the subject of keeping promises: an OMS enables luxury retailers to prioritise VIP clients, ensuring they always get the best service. Sometimes, the only way to fulfil an order will be very costly: one product might be available in your main warehouse, but you need to bring in another product from a store in Paris, and yet another one from a store in London.
With the right OMS, you can decide, on a case-by-case basis (i.e., depending on the customer), whether - given the costs of doing so - it makes sense to make the offer available to the client or not. Basically, you can display different stocks and promises to different client categories, dynamically and in real-time.
Improve the responsiveness of sales staff
The successful deployment of a single, global high-performance OMS significantly improves the responsiveness of sales staff, irrespective of location. By giving them access to the overview of all available stock - and how long it would take to get the product delivered, or shipped to where it can be picked up - sales staff can make sure a customer never leaves a store without a working solution for obtaining their desired product, including a delivery option that best fits their preferences. This helps ensure response times and failure rates – short and low, respectively – outperform any realistic requirement, and avoid lost sales.
Right stock, right places, right times
The comprehensive inventory management capabilities of an OMS provide new restocking possibilities. The strong analytics capabilities of a high-performance OMS provides prior visibility into where to keep inventory, adapting continually to reduce the costs of future order fulfilment.
For example: an OMS might identify that a specific store is running low on a best-selling item, and may proactively plan a restocking of this product on this store before it reaches a bottleneck. And it will do this while taking into account the cost of such operations, minimising them by, perhaps, bulking shipments. In fact, an OMS can be configured to entirely automate the restocking of all points of sale.
Bonus: real-time capabilities in sync with luxury client expectations
As we mentioned earlier, a high-performance OMS provides real-time inventory availability - a ‘must’ in respect of meeting the expectations of luxury customers. It is one of the main benefits of an OMS compared to an ERP: the latter provides a global overview of stocks, but does not take into account the real-time orders that makes some of this stock actually unavailable.
Relying only on an ERP, you might end up offering to a client a product that’s already been sold - making the order harder and more costly to fulfil, or in the worst case scenario, the promise to the client impossible to deliver on. An OMS even - and automatically - includes returned product into the available inventory, even though the product is not yet physically back in stock, which leads to more sales opportunities.
As well as inventory, the real-time nature of an OMS also applies to delivery options and omnichannel fulfilment. Via integration with the likes of Warehouse Management Systems (WMS) or Transport Management Systems (TMS), an OMS will display a variety of available ways to deliver the order to the customer. That is to say, it will take into account the current situation of the brand’s ecosystem: if a transporter has no slots available, the option is not offered. This minimises the risk of not delivering on a promise, avoiding customer frustration. A high-performance OMS can be configured to balance customer expectations with the cost (both financial and ecological) to the retailer of doing so.
Check out Kbrw’s high performance software OMS for luxury brands, bringing together personalised customer experiences and operational efficiency through IT excellence.