P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Chris Jones

October 15, 2013

Omni-Channel Retail Vision

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

• The Traditional View

• New Thinking

• The Enablers

• Leading Companies

Agenda

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Omni-Channel => Seamless Selling, Disparate Delivery

Has Omni-channel made retailing a “battle of attrition”?

Prohibitively expensive

Inconsistent service

No visibility

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

“Laws” of Service Versus Cost

What has to change to break the traditional rules of

logistics?

Profit Service

Customer

Centric Resource

Centric

Cost

Service High Low

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

The “market disruptors” are doing it…

Same Day, Next Day Conundrum

“of those Amazon shoppers who saw that [same-day] icon and then

made the purchase, most of them ended up not using same-day delivery,

opting instead for next-day” StorefrontBacktalk

Do consumers want same day or do they really want

choice?

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Serial Delivery Process Mentality

Step 1

Sell product Step 2

Offer fixed delivery options

Step 3

Determine how to get it executed cost effectively

Traditional home delivery process

Lose/lose strategy and process

Customer is not happy with the inflexible choices

Retailer plays a distribution “guessing game” with capacity and costs

What could you do if delivery promising was part of the

buying process?

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

• The Traditional View

• New Thinking

• The Enablers

• Leading Companies

Agenda

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Omni-Channel Fulfillment

Consistent/differentiated service

End-to-end visibility

Supply chain leverage Large

Goods

Small

Package

Private Fleet 3rd Party

Supplier

Omni-channel has to be just as seamless on the “back

end” as it is on the “front end”

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Service AND Revenue AND Profit

Premium Delivery Times

Value Added Services

Delivery is no longer about getting it done, it’s about

getting more…

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Profitable Choice

Cost of delivering via Route 1:

£28.50

Cost of delivering via Route 2:

£35.00

Legend

Route 1

Route 2

Route Stop# Date Cost Time Window

1 4 April 26th £28.00 9:00am – 11:00 am

2 5 April 27th £35.00 11:00 am – 1:00 pm

1 12 April 27th £55.00 3:00 pm – 5:00 pm

2 13 April 26th £62.00 4:00 pm – 6:00 pm

Give customers options that don’t erode your margins

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

To effectively deliver same/next day your supply chain must

operate in minutes and without any blind spots

Accelerating the Flow While Maintaining Control

Supplier Retailer Carrier

Suppliers and carriers need to be integrated into a single system

that merges order and shipment information

In-transit deployment

Load flow control

Dynamic echelon skipping

Retail ready merchandise

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

• The Traditional View

• New Thinking

• The Enablers

• Leading Companies

Agenda

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Dynamic Delivery Appointment Promising

Online Purchase

Customer Delivery Options

Same Day

Delivery ($25.00)

Free Standard Delivery

Premium

Delivery ($10.00)

7am-9am

Wednesday 24 April 2013

Thursday 25 April 2013

Friday 26 April 2013

Saturday 27 April 2013

Sunday 28 April 2013

Monday 29 April 2013

9am-11am

11am-1pm

Logistics costs are dynamically generated for each slot allowing a

retailer to determine the most profitable choices

Considering: Revenue

Costs Routes Vehicles Roads

Skill Sets Unload times Time Windows

Actual route optimization provides options in ~ 1 second

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Dynamic Multi-Modal Delivery Management

Large

Goods

Small

Package

Click &

Collect

Supplier

Cost

Capacity

Priority

Optimize across all delivery modes

Integrated optimization and execution

Eliminate trapped capacity and improve delivery flexibility

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Closed Loop Customer Experience

Confirm

Notify

Track Deliver

Survey

Capture the

Customer Measure the

Experience

Document

the Delivery

Manage

Disruptions

Minimize

“No shows”

More than mobile or web

This works no matter if fulfillment is in- or out-sourced

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Integrated Inbound Logistics

Commercial

Customs

Logistics Product

Getting “In the Flow” with suppliers and LSPs/carriers creates data

leverage for streamlined and reliable inbound operations

PO to ASN

BOL to Customs Filing

Catalog to Configuration

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

• The Traditional View

• New Thinking

• The Enablers

• Leading Companies

Agenda

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

John Lewis: Defining Omni-Channel Excellence

Single system for all retail channels

Nationwide service

“One click” to delivery for consumers

Automated “value added” service attachment

Increase “value added” services revenue

Reduced mile/delivery by 13%

Increased product revenue

Full delivery service in Central London during the Olympics

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

Mobile/web order/delivery promising

integrated with warehouse fulfillment

Same day delivery

10 2-hour time windows daily

3 Delivery waves

Meet delivery window promise

Schedule drives picking and packing

Home Plus: Change the Format, Up the Delivery Ante

Increased sales volume

Increased delivery compliance

Improve picking/packing efficiency

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

CVS Caremark: Inbound Excellence

Supplier/Carrier Connectivity

Visibility

Yard Management

Dock Scheduling

Primary Transpor

t

Inbound Transport

Freight Audit

Load Flow Control

$107B US pharmacy healthcare provider

7300+ stores

Stores, web, mail order…

Domestic inbound

Most inbound freight supplier controlled

Reduced inventory

Reduced PO to receipt time

Increased delivery accuracy

Reduced warehouse staff

Improved regulatory compliance

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

SCI Logistics (e.g. Rogers Communications)

Leading Canadian 3PL

Small package services

Retail, ecommerce and healthcare

Integrated warehousing and transport management

Peaking at 14,000 shipments daily

Able to execute same day delivery

Value added services customized to each delivery

Customer notification

Integrated returns processing starting with labeling

Consolidation - zone skipping

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

• Fundamental shift in the importance and role of fulfillment

• Service based competitiveness

• Margin protection

• Service revenue growth

• Sell more product

• The battle is won at order

• Optimize across all fulfillment channels

• Execution across the supply chain is the “last word”

Summary

P r o p r i e t a r y a n d C o p y r i g h t o f T h e D e s c a r t e s S y s t e m s G r o u p I n c . A l l r i g h t s r e s e r v e d .

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