Traditional brick-and-mortar retailers who want to expand to omni-channel face many challenges to their ERP implementation, such as tying their inventory and purchase interfaces from the store to the web and beyond. However, there are other decisions that should be made in order to make the transition to omni-channel retailing smoother, and these decisions can have a serious impact on how their ERP system is set up to handle them.
Salesperson Compensation – Omni-channel retailing offers customers a variety of options. Not only can they order online and have the item shipped to them directly, but customers can also order online and pick up the item at a nearby store, or they might visit the store and have the options explained to them by a salesperson and then order the item online for delivery at their home. When salespeople are on total or partial commission, how will they be compensated when assisting these clients?
Some ideas to provide sales staff incentive to assist customers who utilize the convenience of omni-channel are:
- Include a method to track and compensate salespeople that provide in-store assistance to customers who ultimately purchase that product online.
- Make an item’s price the same on all channels to reduce the tendency for customers to “showroom” in the store (and monopolize a salesperson's time), only to buy online later.
- Offer staff additional compensation for upselling the customer who buys online and picks up the item at the store.
Ultimately, in order to achieve the best possible customer satisfaction through a company's omni-channel strategy, commissioned sales staff need to feel free to assist customers who may later purchase an item online without the fear of losing their commission on the sale.
Inventory Tracking – When customers order online for later in-store pick up, the retailer must ensure that the item showing as available online is reserved for the customer when they come to pick it up. This is especially true for popular items and will usually require some changes to the way the retailer handles inventory in the ERP system.
For instance, a company might reserve a percentage of available inventory for online purchases, while other companies might treat items that are sold but not delivered as in-stock, but remain unavailable for other customers.
Companies need to determine how they will handle inventory for online purchases that will be held for the customer at the store and set up their ERP system accordingly.
Order Fulfillment – Having an item available online and in the store is one thing, but the optimal omni-channel solution ensures that there is no incentive for customers and sales staff to select one method over another, such as offering the same price for in-store and online sales and equal shipping costs, whether purchases are online or in the store. This helps to avoid the tendency for sales staff to discourage potential clients from using the website for purchases, and also reduces the incentive for customers from showrooming an item in the store and purchase it online later.
The advantages of omni-channel retailing are that retailers can now offer their products internationally in a store that is always open with minimal sales staff and overhead. However, retailers considering a move to omni-channel should think about how to approach the situations mentioned here to ensure that clients and staff reap all the benefits omni-channel retailing has to offer. The implications on how these companies configure their ERP system, from inventory management to sales commissions, can be significant.
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by ArcherPoint, LLC.