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Posted November 14 2018

Predicting Sales Is No Longer Enough

The omnichannel concept is becoming more and more popular in e-commerce. Indeed, whether it appears in the context of business to business (B2B), business to customer (B2C) or with large retailers, omnichannel is reinforced by "millennial" consumers always being connected. Consumers are more agile, faster, and more demanding than ever before. As a result, companies are looking for more sales prediction tools to meet the demand, as well as delivery requirements on an ad hoc basis.

No matter when or how a customer is in contact with our brand, it should be treated the same. It is not a web client or a retail customer. He is a Steve Madden customer. - Mark Friedman, e-commerce president, Steve Madden

Although a prediction tool helps to get a more precise visibility of the demand, it is not enough in an e-commerce environment. Several factors add to the complexity of the process. For example, knowing how much inventory must be produced to meet the market demands is certainly useful, but it is also necessary to provide some specific elements to respond effectively to the market needs and, above all, to better stand out from the competition. Here are a few:

Store Stock Redistribution: This system manages the demand, but also the distribution and transport between different stores and warehouses. The degree of complexity in a multichannel environment is not only related to demand-controlling elements, but to several factors, such as transportation optimization, distribution cost, and product life cycle.

Redistribution Matrix: In a multi-warehouse or multi-store environment, the process of calculating inventory or demand allocation must always consider several parameters, including:

    • Optimal journeys;
    • A hierarchy of storage;
    • The distribution of stocks among the various locations, namely the stores;
    • The product life cycle.

Trip Calculation. The implementation of a distribution strategy is an essential element. On the other hand, we must not neglect the deployment of a demand distribution calculation engine. Thus, this type of strategy must take into consideration the following elements:

  • Least Cost Routing (LCR): This involves strategically placing the quantities of inventory needed to meet the demand in a particular market region and within a specified period. The better the levels of inventory, the better the performance, not to mention the delivery time for the customer, a crucial element.
  • Least Number of Trips: the optimal calculation of the number of trips to optimize the distribution process.
  • The shortest distance: when there are multiple sales or warehousing locations in different geographic areas. With the combination of the stock balance inventory transaction, the most optimal distance can be calculated to pick up the goods between different locations.

The LS Module in Microsoft NAV opens the door to automation and business management in e-commerce. For more information, do not hesitate to talk to one of our experts; we have some great success stories to share!

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