Aerosoles' Single-Silo Inventory Strategy

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Aerosoles' Single-Silo Inventory Strategy

By Nicole Giannopoulos - 04/14/2014
Building true omnichannel merchandising capabilities requires the merging of previously siloed business functions. Footwear retailer Aerosoles has been omnichannel for about 10 years now, however, over the past 18 months the organization has decided to step up to manage the business properly. With a variety of distinct channels, including retail, e-commerce and wholesale, blurring a true real-time view of the enterprise became table stakes. In 2008, as omnichannel evolved and e-commerce emerged, the retailer combined its direct and e-commerce silos. To continue on its path of streamlined inventory, by 2015 Aerosoles will have all inventory housed in one group.
 
This will help the retailer to manage its omnichannel pricing strategy and deliver one seamless experience to the customer. At the 2014 Retail Technology Conference, Aerosoles VP of merchandising Steve Siebel explored how the merging of retail, e-commerce and wholesale channels, as well as the linking of the associated core functions such as assortments, pricing, inventory control, warehouses and demand planning has impacted the retailer's omnichannel journey.
 
"There is no single platform to solve," says Siebel. "But how systems will talk to each other and how to optimize and reorganize to accommodate that is where retailers must set their focus. The organization needs to realign to one customer service team and one allocation team to handle the new demands."
 
Despite the evolution of e-commerce, mailings remain to be Aerosoles' primary driver of traffic to both its website and its store, "When catalogs hit home, customers still hit our stores," says Siebel.  Interestingly, 75% of the demand generated from catalogs flows through to the website.
 
Today, Aerosoles stores run a 70-80% of inventory capacity, housing the bulk of the products, but recently the retailer has re-evaluated its levels, "if our outlets are over-fueled and we're really pushing the limits – we realized we have to determine what the best level of inventory actually needs to be at each location," notes Siebel.
 
With its new single-silo approach, the retailer will have to proper amount of inventory at each location at all time, allowing it to optimize fulfillment of retail, direct, wholesale and dotcom purchases.