Stage Stores Manages One Inventory For All Channels

December 2012 Integrated Solutions For Retailers

By Bob Johns, associate editor

The key to retail growth is doing more with less. This can partly be accomplished by operating one supply chain that services all of the sales channels.

Gough Grubbs, SVP of distribution and logistics at Stage Stores, has the challenge of coordinating the supply chain for the traditional brick-and-mortar stores while adding a fledgling e-commerce channel. Here he speaks to how Stage Stores is approaching the supply chain for all channels.

Our survey shows a huge jump in planned spending on cross-channel inventory management. Why is this becoming so significant to retailers?

Grubbs: Web sales are becoming a larger percent of total sales for everyone offering that channel. It not only addresses the GenY group who tend to shop more on the Web, but also offers a means of filling customer needs should the retailer be out of stock in a particular location. It also permits sales of items that might not be carried at all in brick-and-mortar stores due to limited floor space.

Retailers today simply cannot afford to keep separate inventories. It makes both logistical and financial sense to maintain one inventory to service all channels. The challenge is providing visibility into the inventories from each of the channels. Additionally, demand planning must incorporate all of the channels to maintain an adequate inventory level.

Returns management spending has shown a consistent increase every year. How does returns management affect the supply chain and customer service?

Grubbs: We are only in our second year of Web sales, and most sales come from geographic areas where we have a brick-and-mortar store nearby, so customers are encouraged to make their returns there. Therefore, returns management has not become a significant challenge for us yet. As our online footprint grows beyond the geography of our brick-and-mortar stores, we will face the same challenges as companies that have a large Web presence currently face, inexpensive and convenient returns. This is a customer service issue as well as a logistical one. Retailers must incorporate technology that allows customers to return merchandise to any channel, no matter where it was purchased.

Spending on DC/warehouse mobile devices for associates has shown a nice increase in each of the past three years. How does mobility help retailers in the DC?

Grubbs: Technology has long been the answer for us to absorb sales growth with minimal increases in staffing and space. With each step forward, new opportunities seem to evolve that continue the momentum. For example:

• WMS (warehouse management systems) allowed scanning carton labels to match receipts to POs (purchase orders) and vendor ASNs (advance ship notices), eliminating the need for paper receiving documents that then had to be key-entered. Next step … RF scanning.
• Mobile wireless printers permit us to address spikes in workload that might exceed the capacity of our stationary print-and-apply printers and handle non-conveyable crossdock cartons.
• We plan to implement iPad technology next year to further streamline data capture, speed communication, and further eliminate paper.