Retailers have continued to redesign their networks to keep up with the rise of consumer’s demand and changing shopping behaviors. The right model for distributing high-volume goods is one of the key factors in the retail industry. With pressure on the industry to adapt rising, finding the quickest and most cost-effective way to keep retail products moving is very important.
Strategies for retail moving – pool distribution
So far, modern pool distribution is one of the most used strategies. In the upcoming years, store-level competition will grow. That will bring new challenges to the specialty retailers in their attempt to enhance the customer shopping experience.
That will also put pressure on the logistics processes that help keep store shelves stocked and replenished, as well as those that ensure merchandise arrives on-time, particularly during peak shopping seasons.
Intensifying e-commerce pressure and the changing face of America’s malls are giving pool distribution strategy some new aspects. Pool distribution represents a unique way of sharing a common network of logistics services providers to manage the flow of goods from DCs/suppliers to the backrooms of numerous geographically dispersed stores – to substantially lower costs and increase delivery frequency.
The benefits of pool distribution
Nowadays, consumer expectations have evolved. And the mere benefits of delivery speed and cost-savings are not the only reason why pool distribution is good for retailers. There is also in-stock inventory, which includes in-store and online, precise fulfillment times, more frequent returns and flexible delivery options.
The ultimate goal for the retailer is not to have inventory in its distribution center, but to get it on the shelf. Therefore, in addition to the transportation and distribution cost-savings, this model greatly reduces transit time and streamlines delivery to the store.
Having merchandise at-the-ready ensures more timely replenishment when stores need it, and helps minimize the likelihood of out-of-stocks. That prevents your customers from eroding their loyalty or turning them towards your competition.
Imagine having five separate less than truckload (LTL) deliveries to a mall in one day. But now, instead of five separate trucks, those retailers share a single delivery where each store gets serviced as one stop. The volume of goods moving through a dedicated transportation network is higher in that lane so the stores can be replenished more often. Results are the lower cost of LTL along with the higher speed of parcels.
Variety of innovative ways to use pool distribution
In order to compete with e-commerce retailers, who are able to be more responsive to shopper’s needs, pool distribution is used in a variety of innovative ways. For instance, retailers who use pool distribution have complete visibility into where merchandise is at a moment’s notice.
Modern pool retailers also have greater insight into replenishment lead times which is helping them to optimize in-store inventory management and replenishment programs. One of those retailers, Five Below, discussed its use of pool distribution in high-volume markets at last year’s Descartes Evolution.
The company explained how to achieve greater transparency and flexibility in managing inventory coming into its stores, and helping the company make better use of backrooms. Other companies, such as Caleres Inc., strategically use pool points themselves as inventory storage locations for fast-moving, peak season and/or promotional inventory.
Specialty retailers to meet the demands of modern-day consumers
From the clothing on the shelves to the shipments consumers get in stores, at work or at home, everything is touched by logistics. And, logistics is no longer a backroom function, it’s front and center as part of the brand experience.
And nowadays, specialty retailers need to ensure they are transforming to meet the demands of modern day consumers. Especially, since we live in a time when malls are becoming more of an experience, and exciting e-commerce companies are opening their first stores.A strategy used to optimize how, when and where inventory is received while freeing up employees to interact with consumers and close sales are the biggest benefit given by the pool distribution. That way, retailers are doing their job no matter who sets up shop next door.