Finally, a True Picture of Demand

I’m sure my fellow runners understand the importance of having the right gear available when you have a big race coming up. You have a pair of shoes, a pair of socks, maybe a favorite shirt — and they just feel right. You want to keep buying those products again and again as they wear out. You want them ready for the big race.

Let’s take the example of your favorite running sneakers to make a point about true demand versus incorrectly attributed demand.

If the retail supply chain is truly optimized, when you go to your local sporting goods store, those sneakers should be there — because you’ve purchased them before. You’ve established localized demand for the sneakers you wear, size 10, white, from a specific manufacturer.

Isn’t it frustrating when the sneakers aren’t there? You either have to buy another SKU, drive to another store, or order them for free home delivery — which means they might show up after the race. And didn’t you order them shipped to home last time? Shouldn’t the retailer now be stocking them in the store?

Hey, Where Are My Sneakers?

The problem with traditional order management and fulfillment systems is that, in today’s complex omni-channel world, they don’t always recognize the true source of demand. If accurate demand insights are not available to inform future forecasts and replenishment plans, the product mix is never going to be right in every location.

How did your localized sneaker preference fail to register with the retailer? Well, let’s say you did have your sneakers shipped to home last time. So your sneakers actually originated from a regional distribution center, or a store that’s 50 miles away.

Here’s the shortcoming of historic order management and fulfillment tools: they fail to track the demand source as you, shopping in your local store for sneakers. Instead, they track the demand to the regional distribution center ­— or the store 50 miles away. That’s where the sneakers are going to be replenished, meaning a continuing cycle of shopper frustration and free shipping to home. (And by the way, free shipping is significantly eroding the retailer’s profit margin, especially on a relatively low-priced item like sneakers.)

There has to be a better way, right? Because you need your sneakers right there in the store. And the retailer needs to make a profit.

Introducing Destination-Driven Demand

The good news is that, thanks to new capabilities in JDA Intelligent Fulfillment, your sneakers are much more likely to be there next time.

JDA has combined its industry-leading demand and fulfillment capabilities with IBM’s best-in-class commerce and order management solutions. That means increased visibility all the way to the source of the demand — past the regional fulfillment center, past the wrong store. This new, more accurate perspective reveals you, standing in your local store and looking for your sneakers.

Because of this new destination-driven demand capability in JDA Intelligent Fulfillment, your sneakers should be right there next time. Because the integrated order management and fulfillment systems recognized your demand, then fed that information into the forecasting and replenishment tools.

In today’s omni-channel world, the path to purchase is often complex. It might start on the internet and end with store pick-up. It might begin in the store and end with a delivery to the consumer’s doorstep. Whatever route products take, it’s critical that retailers and manufacturers understand exactly where the consumer demand originated — so that products can be replenished and ready when the consumer looks for them next time.

What’s the cost of stocking the size 10 sneaker you always wear in the wrong store? Or in the regional distribution center? Today, there are just too many other places for you to find your sneakers before race day. In a fast-paced, hyper-competitive, omni-channel world, destination-driven demand allows the retailer to track your sneaker preferences, have the right product ready and build the long-term loyalty that keeps you coming back for all your running gear.

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Read the IBM Commerce blog on today’s news: Creating a Consistent, Profitable Omni-channel Experience.

  1 Comment   Comment

  1. curt wendell

    The above scenario makes very little sense in the real world. You would be overstocked company wide based on the premise above. You are trying to describe just in time inventory by using different wording and all know that JIT does not work.

    Reply

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