May 30, 2008, 12:00 AM

Keeping Order

(Page 3 of 3)

Technology systems can`t do it all, of course. Golfsmith, for example, continues to adjust how it processes orders routed to stores for shipment. For now, its order management system forwards online and contact center orders to drop-ship suppliers as well as some Golfsmith stores, where the inventory receiving manager checks an online log each morning for direct-to-consumer orders that his staff will pick from store inventory, pack and ship.

But Golfsmith faces a constant challenge in keeping things running smoothly, Corey says. A headquarters team of store operations and logistics managers routinely reviews order and inventory levels throughout the company as well as at each store, and adjusts the flow of orders to ensure that orders are properly allocated according to each store`s available inventory and overall level of activity. "We have rules to distribute orders in a logical way, but we constantly upgrade these rules," Corey says. "We don`t want to over-burden any one store, especially a new store breaking in a new staff."

Further refinements are coming. "We have to figure out what is the right model going forward," Corey adds. "Should we have every store ship products, or one super hub store per regional market? The more places we have shipping product, the more chances for errors and a bad customer experience."

Winning over the CEO

In addition to directly matching online orders with products shipped from stores, Golfsmith uses its integrated order management and fulfillment system to look at broader order and fulfillment trends. It has determined, for example, that its web site and e-mail campaigns have influenced a significant number of store sales.

"If the number of orders through our web site is up 18%, but only 12% shipped from our warehouse or a drop shipper, we know that the stores accounted for the other 6% of sales," Corey says. "I can tell senior management about the actual impact of the web channel, so we`ll invest in the channel the way we should."

The more successes retailers report from using cross-channel order management and fulfillment, the more retailers will invest in a web-centered multi-channel environment, Lobaugh says. Deloitte figures that, in addition to the average 7% of multi-channel sales processed online, the web influences an average of 20% of offline sales. "That 27% will approach 50% by 2012," Lobaugh says, "so retail CEOs will become even more interested in investing in cross-channel retailing."

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