Switching to an omni-channel business model requires retailers to drive change in many parts of the supply chain, including the bricks-and-mortar stores that still provide a vital interface with customers.
Dr. Maria Jesus Saenz, Director, Zaragoza Logistics Center, Zaragoza, Spain, and Dr. Elena Revilla, Professor at the IE Business School, Madrid, Spain, describe this part of the omni-channel journey in a column titled Desigual’s Multi-Stranded Approach to Omni-Channel published in the May/June 2016 issue of Supply Chain Management Review.
Fashion company Desigual is deep into its migration to an omni-channel model. The company was created in Barcelona, Spain, in 1984 by entrepreneur Thomas Meyer, and now has nearly 5,000 employees. In 2015 Desigual reported a turnover of 933 million euros.
The retailer is known for its upbeat, original clothing designs, summed up in the philosophy. These values are reflected in Desigual’s product collections: Woman, Man, Kids, Accessories, Shoes, Living, Sport, and Beauty. The products are sold in more than 500 Desigual stores, 7,000 multi-brand stores, 2,700 department stores, 11,000 new-category points of sale and 23 own online stores, in more than 100 countries. In 2015 its online store clocked some 50 million visits and sold more than 30 million garments worldwide.
This extensive network can be broken down into a number of main channels, such as wholesalers, retail stores, franchises, department stores, e-commerce and new categories point of sales. Each channel has its own logistics and competitive challenges.
With the support of senior management, Desigual created an omni-channel team that is involved and engaged across departments such as Supply Chain, IT, Finance, HR, and across e-commerce and traditional retail commercial channels. This cross-organizational approach is essential to developing a holistic view of its markets; a key requirement as Desigual responds to changing consumer demand.
Even though the company is creating a supply chain geared to serving multiple channels, in the context of its customers, “we don’t have channels any more, we have one omni-channel that is focused on consumers” says a team member. This is because customers must receive the same level of service regardless of the combination of flows used to make a purchase.
The way in which store personnel interact with customers is a key part of this service ethic. Desigual has created a comprehensive training program for those stores that are part of its multi-channel network.
Each store has designated personnel for the handling of e-commerce orders. These individuals are trained to develop a multi-channel mindset. For example, they must know how to prioritize orders and set delivery times. A future practice is to offer a range of delivery times that are well within the system’s capabilities, in the knowledge that besting these deadlines scores points with the customer.
In addition, store employees must learn how to process returns, even for online purchases. Customers can return e-commerce purchases to stores or via a courier. When the store is the receiving point, the inventory system automatically allocates the returned product to another order if appropriate, thus facilitating product availability. The store has visibility into this process, which gives personnel valuable insights into the omni-channel process.
Desigual has almost completed the first phase of its omni-channel program. The physical stores that sell its wares will continue to be an important component of the program.