Question

Bigelow stores is a general merchandise retailer located in Atlanta, GA. With 250 stores and three distribution centers (DCs) located in the southeast United States, Bigelow has captured a significant market share in the off-price market. Bigelow carries everyday items as well as “one-time” buy specials that it advertises to consumers at special discounted prices. Bigelow also carries food products with expiration dates but none need refrigeration. Because of the density of the market and the size of its stores, Bigelow can ship full truckloads (TL) of its products from its DCs to its stores on a daily basis. Bigelow currently does not have an internet presence. With a high market penetration in the southeast intact, Bigelow has decided to expand into the northeast and midwest through acquisitions. It has acquired a medium-sized retailer in Pennsylvania, Lions, that specializes in both general merchandise and perishable and non-perishable food items. Lions currently has 100 stores and two distribution centers in the northeast. It utilizes both direct TL shipments to larger stores that are closer to the DCs and pool distribution to the smaller, more distant stores. Lions has an internet presence where consumers can order groceries online and then pick their order up the same day at the store. Bigelow also acquired Spartan Stores, located in Michigan. Spartan is an outdoor recreational sports retailer that has 50 stores and one DC. It is an omni-channel retailer that picks and ships both store and internet orders from its single DC. Spartan utilizes LTL carriers for store deliveries and small package carriers for internet orders. Bigelow’s strategy is to grow these acquired firms, first regionally, then nationally and to incorporate them under the Bigelow name. It also has decided to invest heavily in an internet presence to become an omni-channel retailer.

1. The new Bigelow “network” is comprised of different product lines, with different geographies and volumes, with varying customer touch points (stores versus internet). How would you advise the management of Bigelow on how to proceed in implementing their one-brand, omni-channel strategy?

2. What type(s) of customer fulfillment networks would you implement to service the different channels in different geographies?

3. What challenges and opportunities do you see for Bigelow in offering all products to all consumers on a single Web site? Would the current DC network support this strategy? Explain your answer.

Answer 1

Answer 1. Any omni channel strategy should satisfy the need of Agents, Customers and Managers. Social media, Applications, Chat are essential these days of modern customer service. In omni channel strategy Customers experience not a channel within a brand, they experience the channel. Such a channel demands a smooth and flawless integration of different systems at front end as well as behind the scenes.

Using this strategy makes the company ahead of it's competitors because the customers think that the company will be always there for them, which leads to brand loyalty.

Omni channel strategy is the process of using many channels and, with a uniform approach, making it work towards a single goal, For example- when a song is released by an artist, It can be promoted over music videos, radio, Television etc, but the main goal is to make the customer listen to song. Omni channel strategy helps the company in succeed because the customers have feelings of personalized customer service which satisfies them.

To implement the omni channel strategy successfully the company needs to keep a few points in mind:

KEEPING THE CUSTOMER EXPERIENCE FIRST - what is best for the customer, better user experience for them, focusing on what they need, Taking suggestions from all the management levels of the company, to know their needs and opinions, focusing on goals.

MANAGEMENT OF INVENTORY- The software for checking the inventory whether the products are available and in stock for the customers or not, No customers want to see that the product they have need for out of stock, so keeping a track of the products are essential part of omni channel strategy.

DATA COLLECTION AND ANALYSIS- A business can implement a successful omni channel strategy by collecting the first hand data from the customer and keeping it in mind for the future. Utilize this data, Analyze user profiles, their online search pattern, their past searches and experiences, customer relationship software should be used to gather the data and to know what the customer needs.

SEGMENTING AND CHOOSING THE TARGET MARKET- Knowing the customers which repeat purchase, the loyal customers, the customers who have left buying things from your company, how often the purchase is made, how many times it purchases, based on all these information, choose your target market and do segmentation.

PERSONALIZE CUSTOMER SERVICE- After targeting and segmenting personalize the customer service and satisfy the customer, make them think that you know what they want and fulfill it.

HELPING RIGHT AWAY- Always provide after purchase help, post purchase service make the customers buy the products again from you, and create a brand loyalty.

Answer 2.

I would choose Third party fulfilment for different channels in different locations, Third party fulfillment means handing off the fulfillment of ecommerce to a third party which helps them to get success in process and to fulfill delivery on time. when company is huge and they don't have much time to invest in the distribution infrastructure they use this type of network. Third party logistics helps in warehousing, distribution, assembly and packaging, everything under one roof.

Such type of network is required when the company has limited fulfillment centres, These networks complete- packing, receiving, picking, labeling, quality control, return process, and other projects. Third party or 3PL helps to fulfill range of services, managing inventory to providing customer services, processing the returns and claims, integration of e-commerce systems that exists. Although 3PL is not cost effective but it is successful.

Before choosing a 3PL you have to keep in mind a few factors :

• Warehouse location
• Warehouse space and size
• Technology requirements and capabilities
• Warehouse management
• Ability to communicate
• Flexibility of the 3PL to overtime in peak seasons
• Continuous improvements
• Reputation with other customers

Answer 3. Challenges :

1. ATTRACTING THE CUSTOMERS
2. GENERATING THE TRAFFIC
3. CHANGING THE SHOPPERS INTO CUSTOMERS
4. RETAINING THE CUSTOMERS
5. CHOOSING THE RIGHT PARTNERS AND TECHNOLOGY
6. ACHIEVING A LONG TERM PROFITABLE GROWTH
7. HIRING THE RIGHT PEOPLE FOR RIGHT JOB
8. ENGAGING THE SUBSCRIBERS
9. HANDLING PRODUCT RETURN
10. CUSTOMER SERVICE AND SATISFACTION
11. RAISE IN TRAFFIC
12. STAFF MANAGEMENT
13. CUSTOMERS TAKE TIME TO TRUST
14. MAINTAINING BRAND REPUTATION
15. CHANGING BUSINESS MODELS

Opportunities:

1. GLOBAL MARKET ACCESS
2. BEING AHEAD OF COMPETITORS
3. COST SAVINGS
4. GREAT NUMBER OF CUSTOMERS
5. PROFIT AND SALES INCREMENT
6. 24X7 MARKET( SALES ALL THE TIME)
7. BETTER SOLUTION OF CUSTOMER PROBLEMS
8. WIDE VARIETY OF CUSTOMER CHOICES
9. CLOSE ALLIANCES WITH CLIENTS, SUPPLIERS ETC.
10. EASE OF TRANSACTION AND CONVENIENCE
11. SAVES TIME
12. COMPETITIVE ADVANTAGE
13. FLUID PRICING