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CEO Marvin Ellison, speaking during a recent conference call discussing the home improvement retailer’s Q3 financial results, revealed that Lowe’s is on track to change over its entire store base to this model by the end of 2023. The retailer’s legacy distribution model had storesoperating as nodes in the fulfillment process.
Retailers are well aware that having too much inventory in the wrong store, or not enough in the right one, affects not just sell-through but labor costs and storeoperations. These mismatches also create the need for either markdowns or additional shipping costs to get the products to where they are more likely to be sold.
It was at that point that putting the technology and operations in place to fulfill from an increasingly complex supply chain network embarked upon its next frontier. It was no longer enough to route orders to a handful of DCs and drop ship vendors. Checking inventory in a local store but not placing an order?
By creating narrower product assortments and limiting inventory levels — especially for product shipments headed to brick-and-mortar stores —merchants would gain the ability to react more quickly to changing consumer trends, and even potentially reduce their need for markdowns. What can the retailer learn from and improve?
The report also noted that the most advanced AI solutions can realize savings by using analysis “to route online orders to stores with merchandise most likely to go on markdown while also considering the shipping cost.
Its typically built through a collaborative effort between finance, merchandising, marketing, supply chain, and storeoperations. Promotional calendars: Planning key campaigns, promotions, and markdown events throughout the year to drive sales and clear seasonal inventory. What if we expand to 10 more stores?
4: Use Promotions and Markdowns to Move Seasonal Inventory. Instead, a lot of that has been left sitting in the back of stores or warehouses and needs to go somewhere once you open again. We recommend using promotions and markdowns to move that inventory quickly. Any changes to storeoperations still work with who you are.
Buy Online, Pickup In-Store (BOPIS) retail strategies offer enormous upside for retailers and customers alike. Instead of only shipping to customers’ homes, retailers let online customers shop from their local and online store’s inventory and pick up their orders from their closest brick-and-mortar location the same day.
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