November 04, 2016 Industry news
We’ve kick-started an industry discussion on how much it costs to serve omnichannel apparel shoppers as we launched our whitepaper ‘Where did your profitability go?’
Alongside our research partners LCP Consulting and Cranfield School of Management, our cost-to-serve research was launched at an industry briefing to 30 retail professionals with a lively discussion. Our expert panel consisted of:
- Richard Wilding OBE, Full Professor & Chair of Supply Chain Strategy, Cranfield School of Management
- Stuart Higgins, Retail Partner, LCP Consulting
- Terry Murphy, Director, National Distribution Centre Operations, John Lewis
- Simon Ratcliffe, Sourcing and Supply Chain Director, Fat Face
- Jacky Broomhead, Market Development Manager - Apparel, GS1 UK
The panel tussled with some of the key issues raised in the cost-to-serve whitepaper. Throughout the evening they discussed:
- How to balance the service levels the customer wants (expects) and the operational costs?
- At what level do businesses need to set their commercial and operational agendas?
- How much cost data do retailers need to make informed decisions?
- What are the biggest drivers behind the cost-to-serve?
The range of views put forward from the panellist’s showed that when it comes to cost-to-serve there isn’t one single silver bullet. But one of the clear themes from the evening was the importance of customer intimacy in the decision-making processes. How do your customers perceive you? Are you differentiating yourself on product or service? What’s possible in your own commercial reality?
I think we’re in for a period of excitement. Customer intimacy is going to grow and there’s going to be a broader spectrum of choices and that’s going to make the market very interesting. But, if you really want to make a good profit your cost-to-serve is going to be critical.”
Simon Ratcliffe, Sourcing and Supply Chain Director, Fat Face
Understanding your cost-to-serve is a vital first step in being able to answer these questions with confidence – and to drive sustainable profits.
For more information about cost-to-serve check out the full findings of our whitepaper and try your own costs in our ready reckoner tool.