PROFILE

David Mascitto

Product Marketing Manager, Tecsys
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  • Posted on: 05/16/2022

    Should Zara (and other retailers) be charging for online returns?

    If the retailer has an alternative option for accepting returns like BORIS (buy online, return in-store) which is free, I can see the charge for shipping returns back to the retailer becoming more commonplace. It would deter shoppers from over-buying (knowing they will return anyway) and reduce margin erosion by making the returners foot part of the bill. It also makes good use of the store network.
  • Posted on: 02/22/2022

    Are stores the answer to last-mile delivery?

    Using stores to fulfill orders is a more cost-effective and sustainable method from a delivery standpoint for executing last-mile fulfillment because it shortens the distance the order has to travel (in a BOPIS case, it doesn't travel at all). It also enables a retailer to leverage all of their inventory across their store network, resulting in reduced stock-outs and eventual mark downs. The negatives described in the article such as picking inefficiencies come down to process and technology. A "store-as-warehouse" solution -- which maps the store and/or stock room and directs associates to the item location with a handheld scanner -- streamlines the entire picking process with picking path optimization. This reduces the time spent picking and also accelerates order fulfillment. In addition, a store with the space should use their stock room as the primary inventory location to fulfill the majority of orders and use the selling floor as a secondary location. Regardless of whether a retailer uses the store room or sales floor, store-as-warehouse (sometimes called micro-fulfillment) technology is the key to streamlining the order fulfillment process and further enhances the store fulfillment model.
  • Posted on: 02/11/2022

    What is it about Amazon’s retail profitability that we just don’t get?

    If we look at a basic transactional view of retail -- buy inventory, market it, sell it, ship it, replenish, repeat -- it seems that Amazon retail is a loss leader for its other businesses such as advertising and marketplaces. The retail side with low prices and free shipping is designed to drive traffic, and the traffic is what they sell to third-parties and make profit from. So, in the traditional sense of transactional retail, Amazon might not be profitable. But that's by design. Is there any point in trying to measure their performance? From a retailer's point of view, they have to come to the realization that they will not beat Amazon on price or shipping cost. They will need to find their unique value proposition to win and keep customers that goes beyond free shipping.
  • Posted on: 01/21/2022

    Amazon says first clothing store will be a fashion and technological revelation

    The assortment and availability of brands is what will get people to come to the store--that or low prices/value. Without brands, it'll be private-label city for Amazon, competing with the likes of George and Time and Tru, essentially an omnichannel-optimized Walmart, which would still viable for Amazon, just not brand-enhancing. The real question is, should leading brands play ball with Amazon stores?
  • Posted on: 01/18/2022

    Are retailers getting closer to nailing last-mile delivery?

    What could be interesting is if retailers start taking ownership of the last mile. That is, use their own fleet and drivers to deliver online orders. From a technology perspective, a Transportation Management System (TMS) with fleet management, GPS tracking, notifications, etc. would get the job done with low implementation risk. The harder part would be carving out this outbound logistics division within the existing retail organizational structure.
  • Posted on: 01/11/2022

    Reality hits omnichannel retail with a hard truth

    Omnichannel retail is about the seamless integration of physical and digital retail experiences. It doesn't really matter who owns what, as long as the environments are harmonized. A website, store, pick-up location, return location, delivery company drop-off location, etc. are all pieces of an omnichannel puzzle that need to fit together perfectly, but do not necessarily need to be part of the same organization. The glue that will hold all of these pieces in place is technology, like open APIs.
  • Posted on: 12/21/2021

    Is showrooming still a concern?

    Features like inventory visibility, dynamic pricing (and possibly personalized pricing) and optimized product search will make showrooming even more problematic for competing retailers. Whether or not a shopper came in to the store specifically for the product "showroomed," a lost sale is a lost sale. To combat the effects of showrooming, shoppers need to be incentivized to buy here and now. Retailers will need to determine which promotional levers will work for them, and could include price matching at checkout, loyalty points/club, sales-oriented associates (with the ability to make deals), store rebates, etc.
  • Posted on: 12/13/2021

    Is the BOPIS experience getting any better?

    To get BOPIS to its maximum effectiveness, retailers are going to have to start treating their stores the same way they (hopefully) treat their DCs because in effect, what they are doing is converting stores into mini-DCs or (micro DCs, hence the term micro-fulfillment). That means inventory accuracy, which traditionally hovers around 60-70% for a retail store needs to be much closer to 100% and pick and pack needs to be optimized (more for big box stores than small boutiques) so that SLAs can be met, pickers are not clogging the aisles and store associates are not wasting their time searching for products. The way forward is with a store-as-warehouse type solution, where inventory is received, put away and picked much like it is in a DC. Until we get to this point, retailers offering BOPIS will continue to struggle with out-of-stocks, long lead times for pick-up and reduced productivity.
  • Posted on: 11/22/2021

    Should Macy’s de-omnify?

    As a proponent of omnichannel retailers leveraging store networks for fulfillment and all the advantages that come with this model (inventory pooling, BOPIS, cross-channel returns, shorter last mile, etc.) this seems like a backward move on the surface. However it's designed to attract investment, divest assets and is more a financial play than a supply chain play. What Macy's (and HBC) need to do is prioritize integration between the two entities to ensure the omnichannel customer experience remains intact and continues to be optimized. Completely doable with the right processes and technology.
  • Posted on: 11/04/2021

    American Eagle Outfitters is literally serious about owning its supply chain

    Interesting acquisitions. This could go just beyond controlling fulfillment. Perhaps AEO has aspirations of becoming an online marketplace ... time will tell.
  • Posted on: 10/29/2021

    Should brands and retailers stop destroying unsold merchandise?

    As long as there will be consumers of high-end, exclusive fashion items, there will be merchandise destruction. You just can't have, for example, last year's Louis Vuitton purses being sold at Marshall's. The brand will lose its cachet. So when it comes to high fashion, the only way around this is to forecast demand more accurately so that destruction is not needed or limited. More easily said than done.
  • Posted on: 09/22/2021

    Ron Johnson loves stores but says retail is moving to ‘commerce at home’

    I find it hard to believe that with people cooped up for so long, they'd want the store to come to them rather than them going to the store. The future of retail will be a mix of online and physical shopping. Online for the stuff you don't really feel like shopping for or that's a hassle (e.g. groceries) and stores for the stuff that's fun to shop for (e.g. fashion apparel, cosmetics, tech like mobile phones, sporting goods, etc.) or that you absolutely need today.
  • Posted on: 09/21/2021

    Where are the weak points in in-store fulfillment?

    If you're a retailer and you want to reduce last mile costs while accelerating delivery times to compete with the likes of Amazon, in-store fulfillment is a must. The biggest obstacle to doing it is understanding how it works from a technological and process perspective and then optimizing it for your particular operation. The technology is straightforward: Order Management System for (among other things) inventory visibility and order routing and a Micro-Fulfillment aka Store-as-Warehouse system that can record inventory locations and direct store-associates/pickers to fulfill orders in the most efficient way possible (similar to how a picker is directed in a DC). Note: I'm not talking about automation/robots here. To address the pain points: 1) Inventory Accuracy: when goods are received, they need to be recorded by the Micro-Fulfillment system either by scanning or RFID. If over time inventory levels are still inaccurate, shrink is the likely culprit. Also, what's stopping retailers from doing additional inventory counts in stores, especially if they stop using DCs for fulfillment? 2) Sku complexity: If you're pursuing a store fulfillment strategy, your online store should reflect your physical store. All items available online should be in every store. If they're not and you're worried about split shipments, a good OMS will consolidate multiple shipments to create one order. 3) Demand forecasting: Store forecasts will need to take into account e-commerce orders as well, using historical order data to create geographic models of demand. The geography will dictate which store is likely to be the fulfillment node. In a nutshell, forecasts for each store need to include both digital and physical sales. 4) Picking costs: What is driving the cost? If it's a productivity issue, the Micro-Fulfillment system will make short work of this by streamlining picking. 5) Execution quality: ideally, picking should be done from the back store/stock room first, then from the sales floor if items are not available in the back. But once again, even when items are picked from the sales floor, the system will streamline the picking process so that it's executed more efficiently, reducing disruption.
  • Posted on: 09/17/2021

    Retailers don’t have to choose between profitability and customer satisfaction

    Retailers who haven't embraced a true omnichannel model basically have three options: 1 - Continue on the current path, which means very limited to no omnichannel offering. In the short term, your profit margins may be higher, but over time you'll lose business to competitors that have embraced omnichannel. 2 - Continue to use an "improvised" band-aid omnichannel solution. This will also work in the short to medium term, but the inefficiencies will continue to eat into profit margins and the customer experience will also suffer. 3 - This is a two-parter: a) Embrace omnichannel and implement the proper systems (e.g., an order management system); b) Continuously refine and improve your fulfillment model to ensure profit margins remain healthy. That means exploring multiple fulfillment methods (store fulfillment vs. micro-fulfillment vs. drop shipping vs. 3PL or any combination of these, depending on customers' geographic location; planning store assortment for e-commerce, different last mile delivery options, etc.) . It also means driving the right customer behaviors (if BOPIS is more profitable than home delivery and also spurs incremental sales, incentivize the customer to pick up in store vs. delivering to them). Companies like Target have already mastered how to extract the maximum from their omnichannel model, and retailers who haven't yet need to follow suit.
  • Posted on: 08/16/2021

    Canadian Tire buys part of a shipping port in move to upgrade its supply chain

    For companies like Canadian Tire, with large volumes of imports, this is a great idea as it gives them "priority" access to the their shipments at the ports they own and can also be seen as an additional revenue stream. It also gives CT an advantage over competing retailers who are currently all vying for the same space and shipping equipment to get their merchandise into warehouses and stores.

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