Access the full event here: https://event.on24.com/wcc/r/1951266/360F67F80AC78C0460873ECA6CC59D4E "Connected consumers are expecting, and even demanding, flexible order and pickup options. And while research shows many retailers are expanding their BOPIS and other fulfillment option offerings, most brands are still struggling with actually executing on delivering a shared cart across channels. Recent research shows 66% of retailers said that inventory inaccuracies made their BOPIS (buy online/pick up in-store) service offerings inconsistent. This session will offer a deep dive into why retailers are struggling to align the data and insights they need to provide a seamless omnichannel inventory offering. It will also provide a use case example of how a top brand is using machine learning and AI to know what, when and where each SKU should be in the retail chain in order to optimize omnichannel inventory. "

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Delivering On The Promise Of BOPIS…
And Other Omni Channel Realities
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Panelists MODERATOR:
Adam Blair
Editor
Retail TouchPoints
Antony Karabus
CEO
HRC Retail Advisory
Kevin Stadler
President & CEO
4R Systems

7. 4R Systems
April 2, 2019
BOPIS –The Promise &The Pitfalls
Buy On-line, Pick-Up In Store

8. Agenda
Copyright © 2019 4R Systems 8
• The Promise of BOPIS
• The Pitfalls of BOPIS
• Demand Pools & Key Metrics
• Integration of Balance & Risk
• Solving for Risk

9. The Promise of BOPIS
Copyright © 2019 4R Systems 9
Effective strategy against pure online offerings
Increases customer satisfaction due to
immediate availability
Increases in store traffic
Increase in margin (no shipping)
Reduces “stranded’ inventory in store

10. HRC Advisory Survey says…
Copyright © 2019 4R Systems 10
“…consumers expect ever faster
delivery, pressuring retailers to
meet those expectations…”
Antony Karabus
• HRC Retail Advisory Survey on Omni-Channel Inventory –
Fall 2018 Interviewed executives from 30 retail chains
• Intent was to assess how retailers’ omni-channel
strategies are impacting customer experience and retailer
profitability
• Omni-Channel offerings like BOPIS must be offered to
compete against e-commerce-only retailers.
• 80% of participants offer their customers some level of
omni-channel capabilities.

11. The Pitfalls of BOPIS
Copyright © 2019 4R Systems 11
• Failure to fulfill alienates the customer;
i.e. risk is higher than just an out-of-
stock
• Incorrect forecasting and inventory can
increase carrying costs
• Localized online demand signals
interfere with store demand in
forecasting
• Localized fulfillment increases variation
in inventory/store order point churn
meaning a more agile supply chain may
be needed
Increases the need for
an agile supply chain

12. Retailer Experience with Omni-Chanel:
Copyright © 2019 4R Systems 12
“…issues create frustrating
customer experiences, including
that an item is available… then
learn at the store is not…”
Jim Schwender
• 100% are experiencing operational and execution
challenges
• More than 80% disappoint customers and increase costs
• Shipping Inefficiencies are sharply increasing costs
• 80% are not effectively allocating inventory to store-level
local demand
• Only 14% are using predictive analytics and most
struggling to integrate into operational practices.

13. Demand Pools & Key Metrics
Copyright © 2019 4R Systems 13
Store Demand BOPIS Demand
• Store Demand &
BOPIS (localized online
demand) Interact
• Can either be
cannibalistic or have
halo effects on each
other.
• BOPIS Demand – Risk
is Higher and should be
protected.
• Has higher long term
customer value

14. Demand Pools & Key Metrics
Copyright © 2019 4R Systems 14
Store Demand BOPIS Demand
• Store Demand &
BOPIS (localized online
demand) Interact
• Can either be
cannibalistic or have
halo effects on each
other.
• BOPIS Demand – Risk
is Higher and should be
protected.
• Has higher long term
customer value
The two demand streams need to be
integrated & risk factors taken in to effect
Legacy forecasting & target service level
solutions can cause inaccuracy & increased
risk & increased supply chain costs
Integration

15. Demand Streams & Fulfillment – An Illustration
Copyright © 2019 4R Systems 15
Store Demand BOPIS Demand
• Store Demand &
BOPIS (localized online
demand) Interact
• Can either be
cannibalistic or have
halo effects on each
other.
• BOPIS Demand – Risk
is Higher and should be
protected.
• Has higher long-term
customer value

16. Integrated Demand & Risk Model (Profit Maximization)
Copyright © 2019 4R Systems 16
Efficient Frontier
Profit maximization is at the core of all 4R solution and is based on the
investment theory from the “Markowitz Efficient Frontier Model”
which is applied to the Retailer’s inventory

17. Integrated Demand & Risk Model (Profit Maximization)
Copyright © 2019 4R Systems 17
Efficient Frontier
Profit maximization is at the core of all 4R solution and is based on the
investment theory from the “Markowitz Efficient Frontier Model”
which is applied to the Retailer’s inventory

18. Integrated Demand & Risk Model (Profit Maximization)
Copyright © 2019 4R Systems 18
Efficient Frontier
Profit maximization is at the core of all 4R solution and is based on the
investment theory from the “Markowitz Efficient Frontier Model”
which is applied to the Retailer’s inventory
Profit Curve reveals highest margin/least risk optimal answer.

19. Benefits of Integrated Demand & Risk Model
Copyright © 2019 4R Systems 19
Integrated
Optimization Model
• BOPIS – Risk Pooling
• Lower Inventory Costs
• Efficient Frontier Shifts
• BOPIS allows for risk pooling –
• 1. Keeping more inventory at a small number of central locations
(warehouses) until demand materializes.
• 2. Fulfill “surgically” in store with certainty, instead of fragmenting across brick
& mortar stores in anticipation of uncertain demand.
• Risk pooling drives lower
inventory costs across the
supply chain, with gained
efficiency
• Efficient Frontier shifts toward
improved margin values for
same amount of inventory
injected in the supply chain; or,
• Efficient Frontier shifts to the
left (lower inventory overall)
while improving the in-stock
position at the store level.

20. Recommendations:
Copyright © 2019 4R Systems 20
Retailers must now offer
omni-channel services as a
standard to compete.”
• Carefully Define Role of the Store In Omni-Channel
• Integrate inventory across channels.
• Use predictive analytic techniques to integrate demand
signals
• Assess inventory inaccuracy and put in place
improvements to ensure customers are not disappointed
• Develop Success Metrics and Omni-Channel Scorecard

21. Solving for Risk
Copyright © 2019 4R Systems 21
• Increase Customer Satisfaction
• Increase Margins
• Decrease Supply Chain Costs Overall
• Decrease Overstock Risk

22. 4R Systems
BOPIS –The Promise &The Pitfalls
Buy On-line, Pick-Up In Store

23. #CCS19
Q&A // Panelists MODERATOR:
Adam Blair
Editor
Retail TouchPoints
Antony Karabus
CEO
HRC Retail Advisory
Kevin Stadler
President & CEO
4R Systems

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