Global Trade March/April 2014 : Page 43

THE RETAILING STRATEGY, WHICH MARRIES BRICK-AND-MORTAR AND E-COMMERCE, ENABLES NAIL ROCK TO DISTRIBUTE TO BOTH WHOLESALERS AND ONLINE CUSTOMERS. to SEKO’s Cranbury, N.J., location was no small task, but he says it’s been highly rewarding. In the three months since Nail Rock has been working with SEKO, the cosmetic company has met more than 90 percent of Walmart’s deadlines. “Anything over 90 percent is considered good,” Jerzak says, “and Walmart doesn’t fine you.” He reveals that Nail Rock’s rating improved even more in the last three weeks of 2013— surging to 97 percent—which puts the company into the “exceptional” category. “Considering where we’ve been, this is incredible,” Jerzak says. “Walmart has certainly noticed the difference—and commented on it.” What’s elevated Nail Rock’s performance to the “next level,” he says, is SEKO’s omnichannel logistics model. The retailing strategy, which marries brick-and-mortar and e-commerce, enables Nail Rock to distribute to both wholesalers and online customers. “People can log onto our website and buy products with the omnichannel model,” Jerzak explains, “and SEKO also does wholesale, which means they do the deliveries to Walmart.” In addition to providing companies with a comprehensive shipping, logistics and distribution solution, SEKO integrates with their customers’ sales-order management systems. “SEKO’s omnichannel model just provides us with that end-to-end service,” Jerzak says. The global logistics provider handles Nail Rock’s shipments from production to distribution—typically from the Far East to U.K. or U.S. distribution centers and major retailers like Walmart. Jerzak explains that handing over the reigns to SEKO provides him and his colleagues with more time to devote to the nitty-gritty details of running Nail Rock. “We’re such a small team that every minute is vital to us,” he says. “[SEKO’s Omnichannel Logistics] division really takes a lot of the strain away from us.” Jerzak envisions more companies jumping on the omnichannel bandwagon in the years to come. Calling omnichannel retailing the “wave of the future,” he explains that consumers like the option to buy products in stores and online. The latter option is particularly attractive from a manufacturer prospective, he maintains. After all, Jerzak says, companies enjoy higher profits when the public buys their products, rather than when retailers purchase them. “Don’t get me wrong,” Jerzak says, “we want to get as many retailers on board as possible. But, at the same time, there’s a huge margin when online customers purchase products.” Fortunately for Nail Rock, online shopping appears here to stay. Mike Maris, senior director of Transportation, Distribution and Logistics at Motorola Solutions, believes the trend toward e-commerce points to a major cultural shift: smarter consumers. And omnichannel retailing, he says, takes full advantage of the shrewd consumer. “As the volume of e-commerce sales moves away from traditional shopping, an omnichannel retailing model provides a better ability to keep customers and facilitate greater customer service as they purchase via non-traditional methods,” Maris says. “Being able to show what inventory is available to the purchaser, as well as choices for when and how to take delivery, all feeds into smarter shoppers’ needs,” he adds. Omnichannel retailing also encourages brand loyalty, Maris says, and enables vendors to upsell. That’s not to say that employing an omnichannel retailing model is without challenges, he cautions. Key difficulties include maintaining accurate inventory when products can come from a brick-and-mortar store, warehouse or cross-dock; shrinking delivery times when same-day and two-hour deliveries are expected to become much more common; and determining how to handle returns. “Some retailers negotiate a fraction of the original sales price and allow the customer to keep [the merchandise], give it to charity or dispose of it, rather than absorb the cost of managing a return,” Maris explains. Retailers must also build distribution centers closer to their customer base, as well as smaller warehouses containing their most-requested items. Another challenge, according to Curt Bimschleger, GENCO senior vice president of Retail Logistics, is changing customer service representatives’ mindsets about the consumer experience. Thanks to the advent of e-commerce, customers may come into the store to pick up a product, return an online purchase to a store, or even buy online from a store if the product isn’t immediately available. “In some ways, stores are becoming mini-distribution centers,” MARCH-APRIL 2014 GLOBAL TRADE 43

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