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Fat Face: Three ways multichannel retailing affects a business

Fat Face infrastructure director Simon Ratcliffe warned attendees at the Drapers Operation Forum in London that multichannel retailing can “dilute” profits if the wrong approach is taken.

Simon ratcliffe fat face 1

Simon ratcliffe fat face 1

Multichannel and geography retailing increases a retailer’s choices in supply chain design

This might involve adapting the design of a warehouse to fit multichannel offerings. As Fat Face has recently expanded its distribution operations with a new facility in Havant, Portsmouth, Ratcliffe highlighted the importance of factoring in product preparation as an example.

He said: “Fundamentally, one online dispatch might take up 60% more space than [a] retail dispatch because of a packing bench. The key is how to handle difference by channel, and square footage is a big part of that.”

Ratcliffe said supply chain design “will change over time”, adding that “flexibility in changing this is critical”.

Business strategies and operating models may be fundamentally affected by multichannel

Ratcliffe said businesses that do not believe this are “in for a shock”, adding: “You can destroy previously profitable channels if you don’t have a dynamic model.”

He advised that businesses expanding to new territories should ask themselves how they can differentiate their offering, and to tread carefully if simply putting their UK customer offering in a new geography and channel.

Multichannel can also profoundly change the customer and financial decision-making process

Planning and execution decisions inevitably demand new organisational capabilities that will have an impact on IT, supply chain and merchandising, said Ratcliffe.

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