The ‘order management’ treatment for luxury retailers
When it comes to inventory management, protection of margin and elevated customer experience, as a luxury retailer you need to act fast to address any issues. At Emakina, we help our clients to define their needs in this domain and build winning models which will bring impactful business outcomes.
If you are a luxury retailer, in all likelihood you have recently been dealing with a significant drop in demand in key markets, causing inventory to pile up. This increase in stock levels can lead in turn to an increase in the proportion of assortment to be listed on sale and decrease in points from margins due to the urgency to sell the merchandise.
While such challenges are happening on the side of the physical stores, the online part of the business has had a skyrocket increase in number of orders, with stock availability becoming the main issue for scaling the digital commerce operation and adding new channels.
It is not enough to introduce new strategies for buying, pricing and markdown of assortments which are helpful in a single channel environment only. For you as a multichannel retailer, what needed is more than what a brand can solve internally.
The urge to increase margin points while decreasing the stock levels and markdown percentages with a limited sale assortment to protect brand equity, pushed luxury retailers to look for a more holistic solution: order management.
Order management becomes the perfect solution to address each pain point and turn these into opportunities for the retailers to scale their business while expanding their reach with a single source of information approach where, as retailers, you can have a full control of your products in terms of pricing strategies and inventory management, which are the top topics for luxury retailing.
As unit prices are comparatively high for high-end luxury brands, the assortment and replenishment strategies are quite strict for seasonal collections, whereas there is much room to play for carry over assortment. These buying limitations per channel and allocation of only the planned merchandise to each channel are also not helping with the piling up of inventory and decreasing margins as moving the merchandise around for fulfilling the demand is not fast enough and it is costly at the same time, and of course it is not fast enough either for the end customer’s expectations, resulting in lost opportunities.
With order management, Emakina can help luxury retailers to manage inventories across different channels with a single global view of inventory and smart fulfillment flows. While managing inventory in the most efficient ways, brands can also save on operational costs by smart fulfillment strategies. Customer experience will be elevated also thanks to this technology; customers will not face “out of stock” for the ‘new in’ items and will experience much faster and more convenient delivery which they can decide on in the checkout.
From a brand perspective, as the retailer, you no longer must rely on planning teams for the correct allocation of the merchandise, but instead, OMS will decide on the allocation of the merchandise by calculating and placing the transfer request on time not to miss any opportunity in any channel, let it be a marketplace or a store, while still having the control over the merchandise, which is very key for luxury retailers.
When it comes to brand experience from a customer perspective, it is very important that the experience is consistent across channels, and that there is seamless navigation between channels, with all the data available on a single customer profile.
The order management system sits at the center of all these channels, connecting them to each other and communicating the necessary data. This allows a customer to view and act when needed, whether that is for a return, an exchange or any other purpose. It allows customer service agents to support the customers through their brand journey in a more professional environment, with access to all the data needed in a seamless way with no hiccups.
It is way more critical for luxury retailers to manage the unpredictability with a lot of uncertainties on the markets and sectors, brands felt the urge and necessity to adapt their systems, channels and strategies to fast changing circumstances with flexible solutions, where the business can be balanced between rising and losing channels to keep the business healthy to meet year-end objectives.