SURNight 2020: Challenges of Omnichannel Retail

Seminar in the evening

"Omnichannel" is one of the keywords for the future of retail. The "Smart Urban Retail Night 2020" held on 27 February 2020 brought together scientists and experts from the field to discuss the challenges and opportunities of omnichannel retailing. Bonprix offered practical insights with its innovative concept of the "Fashion Connect Store" in downtown Hamburg.

"Omnichannel capability is one of the most important topics in retail today," says André Ludwig, a Professor of Computer Science in Logistics at Kühne Logistics University and coordinator of the event. In the meantime, most retailers in Germany have established solutions for digitally interlinking the various channels in the sales process.

The bonprix "Fashion Connect Store" - customer-centered, digital & experimental

The bonprix "Fashion Connect Store" in downtown Hamburg showcases the latest possibilities in the area of omnichannel retail. Frank Ebert (bonprix Handelsgesellschaft mbH) and Christian Jansen (bonprix Handelsgesellschaft mbH) presented the concept, which is intended to intelligently merge online and offline sales. At the pilot store, bonprix has consistently employed new and intuitive technologies to offer customers a convenient, fresh and unique shopping experience in which their smartphone becomes a digital shopping assistant. As a central element, the app accompanies them throughout their visit to the store.

Logistics are decisive

Behind the scenes, the store is based on a sophisticated logistics system. As soon as a customer uses the bonprix app to signal that she would like to try on selected items, the employees in the store are informed via a separate app, so they know which products need to be brought to which dressing room. The desired products are hung directly in the cubicle via a separate door with direct access to the warehouse. The customer is only informed about where she can try on the goods once everything is ready and waiting.
Articles are selected manually with the help of a specially developed employee app, which shows on the employee’s mobile device where each article is located and to which changing room it needs to be delivered. Automated logistics, such as selection by robot, would not be economically viable for a pilot store on this scale, given its experimental nature.
Future features planned for the store include: continuous expansion of the payment options, automatic check-in or the Endless Aisle, and intensified digital marketing and personalized product suggestions.

Stock transparency as a must

"Cross-channel inventory management is the basic prerequisite for omnichannel solutions. Where the goods are currently located must always be transparent," says André Ludwig, touching on the main challenge of converting to effective omnichannel retailing. "As scientists, we are primarily concerned with questions on IT systems and process integration, and develop concrete models that can help to use omnichannel services effectively and cost-efficiently," he adds.

Omnichannel influences supply chain management

In the course of several projects Sandra Transchel, a Professor of Supply Chain and Operations Management at KLU, has analyzed how comprehensive stock transparency in omnichannel networks affects logistics processes and their costs. "Models can be used to show the extent to which implementing omnichannel services affects, for example, the availability of goods in warehouses and stores, or logistics, inventory and transport costs," says Transchel. This approach can be used to investigate concrete questions: For which products are omnichannel services best suited? What are the cost drivers for omnichannel logistics? How should the logistics for returned goods in omnichannel retailing be designed?

The "Smart Urban Retail Night" was a continuation of the "Smart Urban Retail Day 2019," and took place within the framework of the research project SURTRADE (Smart Urban Retail Services) at KLU, funded by the Federal Ministry of Education and Research. Our project partners include the University of Leipzig, HHL Leipzig Graduate School of Management, Tchibo, SALT Solutions and Checkmobile. Coordinated by Prof. André Ludwig, one of SURTRADE’s main goals is to develop digital solutions for the retail industry, e.g. an urban retail service platform with open interfaces for retailers, delivery staff and customers.

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