Hi Guys, In this blog, I want to summarize the different aspects and issues that drive the Retail warehousing requirement. This will help you to lay a foundation when implementing D365 for Commerce for Retailers having big Central distribution warehouses and eventually understanding the questions and requirements. This will also give you a perspective on why Retail warehousing is unique relative to manufacturing or wholesale distribution.
Everyone buys things. Some buy it from a retail store, and others buy it online. Everyone knows how to do this. But have you ever wondered where this comes from? Today, we’re going to talk about Retail Warehousing. The source of all the things you buy. Retail warehousing is a little unique. To be credible in front of a retail prospect or in implementing the software for a retailer, you need to appreciate what makes Retail Warehousing different. If you’re going to sell D365 F&O Warehouse Management in a Retail Warehouse, you need to understand the major issues that surround Retail Warehousing. These are the issues that drive requirements, in the solution documentation phase as well as the questions that you get during the sales process about, what D365 F&O Warehouse management module can or cannot do.
What is meant by Retail?
For most people, retail means buying in a store or online or from a catalog. We refer to these as B2C or brick and mortar, respectively. B2C is business to consumer, but it also can include not only online businesses but catalog businesses as well. When talking to a prospect or Retail Warehouse manager, you need to showcase how D365 for Commerce along with Advance warehouse management adds value to their Retail warehouse operations.
Primary issues of Retail warehousing
When you go in to talk to a prospect or start an implementation project, you need to understand what are the issues that are driving the requirements and the questions that you’re getting. If you look at a Retail Warehouse, there are four main issues, (I have already elaborated on each one of them in my previous posts. Click on each link to go to relevant post)
Retailers that are different than Average Retailers
- Efficient Storage. Storage in a Retail Warehouse is different. In particular, it’s different why? Because you’ve got to put a license plate on every single box because you can’t count on standard case quantities and so forth, and there’s a lot of functionality around that license plate. It’s not just tracking it. It’s also things like replenishment and receiving that have to be capable of supporting license plates.
- Efficient Picking. There are so many people, and so much of the time that those people spend is just traveling around the warehouse and that warehouse managers in retail environments are very sensitive to features and functions that are designed to reduce travel, and you need to know what those are and be able to explain how they can improve the efficiency of a given Retail Warehouse. They want to get rid of miscellaneous information that’s on the screen that doesn’t add any value. They want to eliminate scans. They want to make sure that when there’s an error message pops up that it’s really obvious so that the person will know they’ve done something wrong so that they don’t end up causing some problem further down in the chain.
- Influence of Seasonal Inventory. Seasonality drives requirements in the eCommerce channel as well as brick and mortar. In brick and mortar, it creates the need for flow-thru distribution and packages, so that vendors can create and box product going specifically to stores ahead of time so that those boxes when they get to the warehouse, they can just flow right through. For eCommerce, it means that there’s a huge spike in the fourth quarter that the warehouse managers have to deal with. And to deal with it, that means they’ve got to bring in lots of temporary labor. That makes them really sensitive to two things. Is the system easy to learn, but also is it really efficient to use.
- The Complexity of Operations. If you look at a Retail Warehouse compared to manufacturing or wholesale, you’re going to see that there’s lots of product flow and product complexity that you have to deal with. You need functionality in the system to support complex inbound value-added services or what we call the prep area or the personalization area or the gift wrap. You’ve got to be able to have rules that the system can use to route things around to all these various destinations that it has to go to before you put it away as well as before you ship it. All that complexity adds up, and it makes retail that much more complex than its manufacturing or wholesale brethren.
The second thing that you need to understand is that there are two types of retailers that have different Retail warehouse requirements than Average Retailers in the way they manage their warehouses.
- The first one is a grocery. And for obvious reasons, grocery warehouses are quite different from what I would say the classical brick and mortar or B2C warehouses, just simply because of their product which is food. Food requires a whole lot of warehouse management features that any average retailer doesn’t need that relate to temperature control or code dates. Or the picking methodologies that are employed in those types of warehouses just aren’t generally used in any other segment of the retail marketplace.
- The second one is called off-price retailers. I call these industrialized flea markets. These are retailers that buy the excess inventory of other retailers and then sell them to consumers at a deep discount. Most of these are brick and mortar stores, but there are a few online stores. The warehouses that support those stores are quite different from the traditional, direct to consumer, B2C, or brick and mortar retail warehouses.
So you better be careful when you reach out to such a prospect to answer the typical question that the average Warehouse management feature doesn’t answer and might require a different set of configurations to achieve the desired result. It’s not that D365 F&O won’t work for these retailers but the requirement differs from an average retailer.
I think this blog was able to summarize the keys aspects of Retail warehousing and that you now have a better vision on how to approach a Retail Warehouse implementation. I hope this blog helps you in some or the other way in this Retail Journey.
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