Omni is not just for Retailers. What is Omni's impact on Suppliers and Manufacturers?
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OK, OK—Omni, Omni. Consumers and their mobile phones are doing pricing, web shopping and so forth. We’re getting inundated with Omni-retail stories. But what about manufacturers? They have Omni-channels of their own, and as suppliers to those retailers, they are an intrinsic part of retailers’ strategies, yet the media is paying this scant attention. Hence, we have a three-part blog series that looks at Omni from three perspectives of the manufacturer:
Manufacturer as the supplier to a retailer or OEM
B2B—Manufacturers’ direct selling/Omni-channel
B2C—Manufacturers’ consumer Omni-channel
From a supply chain perspective, at the minimum Omni impacts fulfillment, inventory policies, pricing, promotions and product offerings by channel and payment terms for suppliers. Those are some of the issues we explore in Your Customer Is Going Omni-channel. What Is the Impact of Omni-channel on the Supplier? Suppliers should really consider Omni-channel in the broadest sense possible and think through all the ‘what ifs’ so they are prepared for and understand the implications of different retailer or OEM strategies. And better yet, a supplier, understanding certain approaches to be more advantageous, should pro-actively engage the retailer/customer in a discussion, rather than being in a reactive mode.
Manufacturers’ Direct Sales
Obviously a manufacturer may be a brand company, too. As such, they sell direct and through channels. Their B2B customers are also changing in the same way that retail/consumers are. Thus in Omni-Channel Is Not Just for Retailers,we explore strategies and options for manufacturing Omni-channel.
In our research we found that B2B sellers are investing as much in their ecommerce as in B2C. Key issues for them are complex pricing and discount structures for a large variety of customer categories and dealing with more complex agreements and contracts in a web context vs. manually.
Another topic we tackle is the issue of manufacturers selling direct to consumer. You are seeing more firms putting their toe in the water either through new brands, discount malls, ecommerce sites, or new launch/concept stores. Gone are the old rules about channel conflicts. Consumers are king—and queen. If you have a brand, you need to protect it.
All the hype about Omni is really not so much hype as a warning bell. A few years back no one dreamed consumers would be standing in stores checking the competition’s pricing. And no one dreamed of free shipping. These and other competitive countermoves have either taken a bite out of or been a boon to sales. Knowing how to ride waves instead of being drowned by them is key. I recently heard a quote by one of the oldest retailers in the US, “We are not good because we are old; we are old because we are good.” Surviving and thriving each trend is the key to profitable longevity.
To view other articles from this issue of the brief, click here.