ALDO Group is a retailer, designer and manufacturer of footwear and accessories. It has 3,000 points worldwide of sales. After thorough due diligence, ALDO announced it had partnered with Celect to optimize its order fulfillment goals.
Marc Chretien (Director of E-Commerce Operations at the ALDO Group) discusses how the retailer uses predictive analytics to make better, faster, and more profitable order fulfillment decisions.
Marc Chretien is Director of E-Commerce Operations at ALDO Group
Total Retail: Why does ALDO Group invest in technologies and tools that will better enable it to fulfill its orders across all channels?
Marc Chretien: The ALDO Group, a fashion retailer that focuses on delivering quality products to customers in a timely manner, is always looking for ways to improve and adapt its supply chain technology. Retailers’ survival and success depends on the digital and omnichannel shift. The ALDO Group dedicates substantial resources to technology projects. Celect technologies allow the ALDO Group optimize inventory position opportunities when working with an Omnichannel Fulfillment Network.
ALDO Group’s goal to deliver product as quickly as possible is the aim of its business. Celect’s technology analyzes demand patterns across the network, then finds opportunities at specific product levels in different locations. Celect Fulfillment Optimization module allows ALDO Group to detect customer demand in real-time and gives it the ability to intelligently use store inventory to fulfill online orders.
TR What behaviors have your customers shown you that lead you to this conclusion?
MC : Customers are becoming more flexible with their buying habits and have adopted omnichannel. This has led them to expect the same options from retailers. Online shoppers may shop in-store tomorrow. They expect the same product options, pricing and service. Inventory placement must be flexible to meet this goal. ALDO Group’s strategy is to place the maximum inventory in-store, rather than in distribution centers. This allows both walk-in and digital customers to access it.
Celect technology adds a new dimension to this strategy. It allows ALDO Group more accurately forecast customers’ needs in real-time and determine which stores have inventory potential. This allows the company to target stores that will have a lower demand and avoid selling at locations more likely to sell out. A large portion of ALDO Group’s 2017 e-commerce sales were handled from its stores. This created hundreds of smaller distribution centers that served customers faster.
TR What are the challenges associated omnichannel fulfillment What is the impact of Celect’s analytics solutions on these challenges for ALDO Group?
MC The ALDO Group, a complex company, offers products via a variety of channels including online and in-stores.
Companies that use omnichannel fulfillment strategies need to know how to best leverage their store inventory to fulfil online orders. One product might be over- or under-sold in different regions simultaneously, as we discovered. The buying behavior of customers is becoming more unpredictable. It’s difficult to predict demand for a specific location.
Celect Fulfillment Optimization analyzes demand patterns across the company and identifies potential opportunities at specific product levels in different locations. This module reacts in real-time to fulfillment decisions. This technology allows us to intelligently use our stores’ inventories in order to fulfill online orders while also ensuring there is optimal stock for customers who visit our brick-and mortar locations.
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TR What level of training do your associates need to be able to fulfill online orders in-store and at the same time, What is the best way to combine this task with other responsibilities?
MC Since 2007, the ALDO Group has fulfilled online orders through its stores. This process is easy and is now part of the daily tasks that a store associate must perform. Online orders are sent to store associates via an electronic platform. Once received, they are responsible for shipping the order. This involves locating the product, cleaning it, and preparing the shipping labels. It is often completed in just a few hours. The average time for this task is less than 12 hours. This includes overnight hours as well as peak times.
Aldo’s success online and in-store is largely due to the role of store associates. These tasks are included in new associate training. Sometimes a store has a designated associate who processes orders online, but in other cases the tasks can be performed by either a stock person or store associate.
The success of ALDO Group’s Omnichannel Fulfillment Initiative is largely due to its customer-centric approach. This puts the customer’s happiness first, online and in-store. We are able to fulfill online orders through our stores in another way that we can meet our customers’ needs.
TR What business benefits does the ALDO Group hope to achieve through its omnichannel fulfillment efforts
MC This stage in the ALDO Group’s transition away from pure retail will see the optimization of its Omnichannel Fulfillment efforts. It will allow the company to achieve greater structural speed and more flexibility in its inventory initiatives.
Incumbent brick-and-mortar transformation is one of the more tangible business benefits. The Celect Fulfillment Optimization module allows the ALDO Group to compare the more complex “Celect” logic against the simpler “distance based logic” which would result in orders being fulfilled at the closest store to the customer. This comparison has shown us how brick-and-mortar sales could have been lost if online orders were fulfilled using distance-based logic. Instead, we leverage the analytics provided by Celect. So, orders from two customers can be fulfilled, and not just one.
ALDO Group is thrilled to continue its growth through Celect’s predictive analytics and inventory optimization. To make our systems more efficient, we will continue to use the technology’s real time calculating capability across thousands of customer order and add countless additional data points. The company has seen strong results from its fulfillment optimization efforts. They have been very successful to date. We are looking forward to maintaining this positive trend and optimizing the efficient fulfillment customers’ online orders across our global network.