OMNI-CHANNEL STRATEGY
355
items in their electronic shopping basket, according
to the number of items they
order, where in the supply chain the items are located, and whether a customer is
willing to forgo return privileges.
57
With regard to their inventory management, the best solution matches sellers’ wider
strategy. Retailers operating just a few locations might be better
served by a centralized
inventory management system, but such a design could be risky if the central location
experiences bad weather or other disasters, such that it cannot react with sufficient
speed to shifts in demand in other geographical locations.
58
Larger operations thus
tend
to adopt hub-and-spoke models, with larger stores acting as hubs that ship orders
to both smaller stores and to customers who have ordered online.
59
In this setup, the
sellers need a sophisticated order management system to synchronize inventory across
hubs, spokes,
and distribution centers, in an effort to find the least expensive means
to get products to consumers quickly, while also avoiding stockouts anywhere in the
supply chain.
In essence, technology can get customers the products they want, at a
time and place of their choosing, according to what they are willing to pay. Retailers
increasingly rely on artificial intelligence (AI) tools to make this a reality.
Obviously, the use of technology is not limited to product markets. It can motivate
consumers
to sign up for
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