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Using Advanced Analytics to Fulfill Online Orders: An Inside Look at ALDO Group's Approach

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To thrive in a hyper-competitive market, retailers are turning to advanced analytics and optimization to drive their ship-from-store effectiveness.

Marc Chretien, Sr. Director of eCommerce Operations at ALDO Group, shares his thoughts on their approach, challenges with traditional omnichannel fulfillment, and positive business benefits of advanced analytics.

Published in: Retail
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Using Advanced Analytics to Fulfill Online Orders: An Inside Look at ALDO Group's Approach

  1. 1. Using Advanced Analytics to Fulfill Online Orders An Inside Look at ALDO Group’s Approach
  2. 2. Welcome! © 2018 Celect, Inc. All Rights Reserved.2 Marc Chretien Sr. Dir of eCommerce Operations Todd Harris Director of Marketing
  3. 3. Background • Celect helps retailers understand the location specific demand for a product • Patented advanced analytics and optimization technology • Top 50 Technology Innovation out of MIT Artificial Intelligence Lab © 2018 Celect, Inc. All Rights Reserved.3
  4. 4. “The New Retail” 4 mobile Purchase Made home store Concept courtesy of Coresight Research, “18 Retail Trends for ‘18: Preparing for Another Year of Change” Fulfilled From DC vendor store elsewhere? home Delivered To store
  5. 5. Order Fulfillment Challenges • Growing ways to get product to customers ‒ Ship from store and buy online pickup in store • Enormous strains on inventories and demand forecasting ‒ Resulting in excess inventory costs, transportation costs, and unnecessary markdowns • Consumers expect everything in stock, all the time © 2018 Celect, Inc. All Rights Reserved.5 THE “LAST MILE” SUPPLY CHAIN CHALLENGE
  6. 6. What we’ll cover today 1. Challenges and opportunities when fulfilling online orders from stores 2. How and why advanced analytics plays a major role 3. Where Celect fits in the bigger picture at ALDO Group 4. ROI and business impact of Fulfillment Optimization 5. Audience questions! © 2018 Celect, Inc. All Rights Reserved.6
  7. 7. © 2018 Celect, Inc. All Rights Reserved.7 Tell us a bit about ALDO Group and your role.Q Marc Chretien Sr. Dir of eCommerce Operations
  8. 8. © 2018 Celect, Inc. All Rights Reserved.8 What was the particular challenge you were faced with as it relates to fulfilling online orders? What are the unique issues that made it difficult? Q
  9. 9. Online Order Fulfillment Example © 2018 Celect, Inc. All Rights Reserved.9 Store 4 Store 1 Store 3 Store 2 ONLINE ORDER RECEIVED -- HOUSTON, TX
  10. 10. Online Order Fulfillment Example How an OMS would handle an order © 2018 Celect, Inc. All Rights Reserved.10 Rule 1 – Complete Order ✔ Rule 1 – Complete Order ✔ ❌ Rule 1 – Complete Order Store 1 Store 2 Store 4 ✔Rule 2 (tiebreaker) – Closer to customer Rule 2 (tiebreaker) – Closer to customer Rule 1 – Complete Order ✔ ❌ Rule 2 (tiebreaker) – Closer to customer Store 3 ONLINE ORDER RECEIVED -- HOUSTON, TX
  11. 11. Online Order Fulfillment Example With Celect Fulfillment Optimization © 2017 Celect, Inc. All Rights Reserved.11 Store 1 Store 3 Store 4 Consider all stores, the potential benefits of each – in real-time, for every order Store 2 Incurs Split Shipment Close to Customer High in-store demand Low chance of pick-decline Lowest in-store demand No Split Shipment Low chance of pick-decline Far from Customer No Split Shipment Close to Customer High in-store demand Moderate chance of pick-decline No Split Shipment Low in-store demand Moderate chance of pick-decline Far from Customer ONLINE ORDER RECEIVED -- HOUSTON, TX
  12. 12. © 2018 Celect, Inc. All Rights Reserved.12 Regarding analytics in particular, what role do advanced analytics play at ALDO Group in terms of driving success? Q
  13. 13. © 2018 Celect, Inc. All Rights Reserved.13 What was it that prompted you to look at advanced analytics solutions for fulfillment? What attracted you to Celect Fulfillment Optimization? Q
  14. 14. © 2018 Celect, Inc. All Rights Reserved.14 What was the evaluation process like? Where did you start? How long did it take? Q
  15. 15. © 2018 Celect, Inc. All Rights Reserved.15 Where does Celect fit in your business? How does it integrate with your existing systems? Q
  16. 16. Baseline Fulfillment with OMS © 2018 Celect, Inc. All Rights Reserved.16 ALL DIGITAL ORDERS SUBMIT TO OMS OMS RULES & FULFILLMENT SHIP FROM STORE OR DC OMS
  17. 17. Optimized Fulfillment & Localized Demand Prediction Integrated with OMS © 2018 Celect, Inc. All Rights Reserved.17 ALL DIGITAL ORDERS SUBMIT TO OMS FULFILLMENT OPTIMIZATION SHIP FROM STORE OR DC • Increased conversions • Fewer markdowns • Higher margins OMS
  18. 18. © 2018 Celect, Inc. All Rights Reserved.18 Can you share any of the successes you have had so far in terms of ROI and business impact? Q
  19. 19. AUDIENCE QUESTIONS: 1. What challenges did you face with store teams on adopting fulfillment from store? 2. How many stores are fulfilling orders? What is the % of order fulfillment from DC versus stores? 3. What do you recommend - supplying online orders from store directly or a separate warehouse. © 2018 Celect, Inc. All Rights Reserved.19
  20. 20. 3 KEY TAKEAWAYS: 1. You most likely have inventory challenges 2. Yes, you need store operations alignment 3. Advanced analytics is the right play © 2018 Celect, Inc. All Rights Reserved.20
  21. 21. NOW WHAT? © 2018 Celect, Inc. All Rights Reserved.21 Learn more about Fulfillment Optimization https://www.celect.com/fulfillment-optimization Book a 15-minute evaluation with a specialist: https://drift.me/evanc

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