Press Release

Commerce Revolution to Drive Biggest Change in Retail for a Decade, Predicts Manhattan Associates

- Consumer service expectations to skyrocket in 2015; prompting five key areas of focus -

LONDON, 15 December, 2014

Manhattan Associates (NASDAQ: MANH) predicts that soaring consumer expectations in 2015 will drive some of the biggest change in the retail industry since e-commerce took off in the early noughties.

Consumer spending will continue on an upward trajectory, growing from £272bn to £278bn between close of Q2 2014 and 2015 . A majority of shoppers (57 per cent) are already demanding more click-and-collect services and many (48 per cent) want more same day delivery . Unfortunately, a number of these demands are linked to a range of new services that many retailers don’t yet offer.

Craig Sears-Black, UK managing director of Manhattan Associates, commented: “The circumstances that retailers face in 2015 suggest a sea change in the industry. We see five key areas that retailers must think about in order to meet the market head on and emerge profitably come 2016.”

The five areas of focus:

  1. Empower the retail assistant
  2. Create a virtualised single stock pool
  3. Reduce wastage on returns
  4. Embrace millennial-driven innovation
  5. Put a face on every order

Solving these issues will help retailers strengthen customer relationships which in turn will drive loyalty and revenue. With the right approach and supporting systems capability, they can also protect and improve margins.

1. How to empower the retail assistant
Customers use all available sales channels to buy products and expect continuity of service and information across them. Whenever there’s a problem, expect them to head to a store.

“I tried to buy this online and it didn’t work.” Or “I was told I would get this today and it hasn’t arrived…”. When a retail assistant is faced with these kinds of questions, they’re in a position to make the situation better or worse – so give them the tools to make it better.

Very few employees on the shop floor have visibility of inventory beyond the store stock-room or visibility of a customer’s transaction history and buying preferences. But once back-end systems are connected it’s actually not that difficult to extend this information out to the shop assistant. It can be done on a smartphone, tablet or in-store computer terminal. This information can help answer a customer’s questions and deliver a resolution at the same time as presenting a cross-sell or up-sell opportunity - all while the customer is still in the shop.

2. The importance of creating a virtualised single stock pool
Too many retailers will experience the pain of false out of stock. If customers can’t buy inventory that’s really available, everyone loses. Orders need to be fulfilled from any inventory source regardless of its location, but 40 per cent of retailers still have inventory silos.

Products need to be tracked throughout their entire lifecycle: whether they’re in the warehouse, on a lorry, in a stock room or on the store shelf. A single inventory pool combined with a customer order management system allows stores, warehouses, logistics services providers and manufacturing suppliers to work closely together to get products into the hands of consumers at a time and location that’s convenient to them and in a way that’s also profitable for the business.

More sophisticated decision making processes, channel specific service levels and inventory thresholds can be applied. For example, stock holding in store should account for display stock and back-of-store inventory when deciding whether to ship from store. All warehouse inventory, be it online stock held as individual items or store-assigned stock sitting on pallets, should be treated as part of the single inventory pool that allows product to be re-assigned whenever and wherever it is needed to complete a sale.

3. How to reduce wastage on returns
Trying to effectively manage the returns process - arguably the biggest determinant of profitability of online sales - can be hugely frustrating – no-one likes to lose a sale. More frustrating is when you lose twice, or more, on the same product. The reverse logistics process can take weeks from the product’s return in-store to availability for re-sale.

Many saleable goods sit in the reverse supply chain, invisible to the rest of the business and unavailable to the customer, no matter how much demand there might be for that product. Availability leads to sales and more sales at full price leads to more profit.

The idea of the single inventory pool, and an order management system that draws upon it should extend to the reverse side of the supply chain. Once that is in place, it’s an additional way to offer up a sale that would otherwise be missed.

4. Embracing Millennial-driven innovation
A little over 20 years ago, the idea of ordering over the internet would have been laughable. Today the whole industry has been there, done that and is thinking about the next opportunity.

Those that embraced e-commerce and are managing omni-channel effectively – are today’s winners and have gained a significant competitive advantage. So that leads us on to what’s next?!

The honest answer is ‘nobody knows’. But the point is that the future winners will be those companies that are best positioned to capitalise on wherever the ongoing commerce revolution leads us next. It could be taking advantage of ’Big Data’ to analyse in real-time what’s hot in social media and creating offers or propositions based on location and trends. It could be mass adoption of clienteling solutions that give customer-facing employees actionable intelligence to help drive customer relationships, sales and profitability. It could also be the introduction of more concept stores, or new delivery drop-off capabilities. These strategies will become increasingly prevalent as Generation Y’s purchasing power grows. Retailers will need to use every tool available to them to jump on new purchasing channels as they appear and make them profitable. Catering to the digitally enabled lifestyles of Millennials will be one of the paths to success in the coming year.

No-one can be sure what the future holds for the retail industry, but the consistencies of knowing where your stock is and being able to present it, sell it and deliver it to the customer are never going to change. What will change is the how. Retailers need to be prepared - with a modern, flexible and constantly evolving technological capability.

5. Putting a face on every order
Customer centricity is the primary route to success in the current retail environment. Customers have choice – both on availability and price – and loyalty is harder to earn and maintain than ever. Some retailers can get lost in the challenge of the rollout of new initiatives and lose sight of the customer at the end.

As consumers become more and more tech-savvy, they expect to have information at their fingertips. As such, retailers will have to perform in new channels, offer more options on delivery and returns, and be held accountable for their customer service and communication. Stock availability means that customers know when they can buy their product. A range of fulfilment options then gives the opportunity to receive that product in the most convenient way possible. Now there is so much revolving around the customer, it’s important to make the process and experience as convenient as possible.

It’s all too easy for retailers to establish a process and think that it’s ‘job done’. However, what if someone collecting an order in-store has to wait for 40 minutes in a queue before they can get it? They won’t click-and-collect again. This is just one example of where customer service can ensure the success of new processes and initiatives.

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About Manhattan Associates

Manhattan Associates makes commerce-ready supply chains that bring all points of commerce together so you’re ready to sell and ready to execute. Across the store, through your network or from your fulfilment centre, we design, build and deliver market-leading solutions that support both top-line growth and bottom-line profitability. By converging front-end sales with back-end supply chain execution, our software, platform technology and unmatched experience help our customers get commerce ready—and ready to reap the rewards of the omni-channel marketplace. For more information, please visit

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