How to Jump Start Your Store Fixture Supply Chain

Leading retailers are using today’s uncertain environment to jump start their store fixture supply chain. Are you? Those who capitalize on the massive shifts in today’s retail environment to improve their store fixture operations will gain a competitive advantage. Don’t be left behind.

What Does Best-in-Class Consolidation Look Like?

In simplified terms, retail fixture consolidation takes all of the furniture, fixtures and equipment needed for store projects and organizes, warehouses and sends those items according to detailed timelines. The alternative to consolidation is a direct-to-store model in which the retailer manages store projects by coordinating with multiple vendors to send every fixture and component to multiple store locations, often dealing with go-backs, delivery damages and shortages, incorrect purchase orders, schedule changes, installation errors and follow-up calls.

As many manufacturers do not currently have capacity to produce or send products, retailers are facing significant supply chain upheaval. To mitigate these challenges, retailers who are ordering inventory now and already use a strong consolidation system have reduced their risk by having all inventory on-hand in a warehouse, ready to ship when activity picks up again. Those retailers looking to streamline their store projects further may wish to contract with one provider who combines consolidation with installation and merchandising services. With that model, retailers can achieve total store project accountability by having a single point of contact. According to Neal Cheek, Director of In-Store Services at Store Opening Solutions, a Marmon/Berkshire Hathaway Company, “By working with one partner for both consolidation and installation, the retailer has a single point of contact that is able to deal with any situation that may arise – often without even involving the retailer.”

Why Now Is the Time to Consider Consolidation

Business leaders realize the impressive ROI benefits a consolidation model offers, but the effort to re-engineer their processes and financial models to support the change usually gives them pause. However, current store closures and major disruptions in supply chain related to the global pandemic do present unique opportunities. This uncontrollable disruption offers the catalyst business leaders need to jump-start a significant overhaul. In fact, retailers could start directing their vendors to divert product to a third-party warehouse today to be better prepared for a shift to consolidation.

With a consolidation partner who uses best practices, retailers can eliminate uncertainty and experience very important bottom-line benefits – increased profitability, better accountability and efficiency and faster speed to market.

1. Increased Profitability

Transportation Savings + Loss and Damage Reduction + Fewer Installation Go-Backs = Overall savings of 20% Retailers using a direct-to-store supply chain model typically use the LTL (less than truckload) network, which is a shipping method rife with excess overhead. By switching to a consolidation model, retailers can ship full truckloads of fixtures in bulk directly to one warehouse. At that warehouse, the fixtures are inspected, tracked and then re-palletized with everything needed for a single store project. Everything is then shipped again in a full truckload to the final destination. Another concern with a direct-to-store model and the LTL network is that these methods rely on multiple pick-ups and drop-offs, which means multiple forklifts touch the product before it reaches its destination. With every touch comes another opportunity for product to be damaged or go missing. A conservative assumption is 52 pallets per store multiplied by eight touches, equaling 416 risk points. These risk points can result in missing and damaged fixtures, which means the retailer must spend time and money dealing with replacing these items.

In addition, when needed items do not arrive at the store site, or show up damaged, the installation teams are unable to complete their work on time – decreasing store project profitability. Dealing with missing items and go-backs also adds administrative burden to the retailer.

2. Better Accountability and Efficiency

With a consolidation model, retailers can gain more control of and more visibility into their everyday store fixture scenarios. For example, a retailer currently using a direct-to-store model is coordinating with multiple vendors to provide everything from shelving to peg hooks. With so many different vendors, it can be difficult to know where any one item is at a given time.

Consolidation offers an alternative to dealing with multiple vendors by funneling all fixtures and components to one source – the consolidator. The retailer then has a single point of contact for all questions, which eliminates phone calls and headaches for the retailer.

According to a project manager at a large retailer, “I come into work Monday morning and I don’t have to worry that I have five store remodel projects going because I know my consolidator will handle everything. They bring extraordinary value to what I do.”

3. Faster Speed to Market

While market uncertainties seem likely to persist, businesses must be ready to capitalize on the opportunities associated with re-opening the economy whenever that may happen. Speed to market will matter – and those with a solid store fixture supply chain in place will win that race.

According to Goss, consolidation gives retailers a great deal of flexibility. “When their inventory is already in the warehouse where it has been inspected, picked and packed, then that retailer can turn the switch on very quickly,” Goss said. “On the other hand, if a retailer is dealing with a number of different vendors, then coordination may be difficult. Those vendors may not be able to react quickly enough or have long lead times.”

Learn more by visiting Store Opening Solutions and downloading their whitepaper.