Global Retail Expansion: How to get your inventory and distribution strategy right
Published on 14 Jul 2023
Expanding internationally makes sense if you want to take advantage of new growth possibilities, but it also brings challenges, especially when it comes to stock availability and fulfillment. Risk management, careful planning, and using what you learn in one market to improve your performance in another are all important parts of successful global growth. To do this, retailers need to be able to try goods in new markets, control product offerings based on regional preferences and laws, support different distribution strategies, and change fulfillment logic based on what the local market needs.
A robust and adaptable distribution strategy becomes paramount for retailers looking to establish a strong international presence. By tailoring distribution approaches to each market's unique requirements, retailers can ensure efficient and cost-effective stock availability, streamlined fulfillment processes, and enhanced customer satisfaction across borders. Implementing a comprehensive distribution strategy enables retailers to seize opportunities in new markets, optimize supply chain operations, and strategically align their offerings with regional demands. As retailers navigate the complexities of global expansion, an effective distribution strategy serves as a key enabler for sustained success and growth in diverse international markets.
A global order management system, like Fluent Order Management, meets all of these needs and more. How it works is as follows:
1. Separating items in a virtual inventory
With virtual inventory, stores can combine and divide their stock in new ways, making it a valuable tool for distribution channels marketing. Retailers can utilize inventory rules, buffers, and exclusions to create virtual pools of merchandise, allowing for strategic management of product availability. This feature enables retailers to choose which inventory pool is available for sale in certain areas or through specific sales channels, tailoring their distribution strategy to target different markets effectively. By leveraging virtual inventory and distribution channels marketing, retailers can better prioritize their stock, optimize product allocation, and enhance their overall supply chain efficiency. This level of flexibility and control enables retailers to respond promptly to changing market demands, maximize sales opportunities, and improve customer satisfaction, ultimately driving growth and success in the competitive retail landscape.
Putting things to the test in a new market
Let's say a store that already sells in Country A wants to sell in Country B. Using Fluent Order Management and its distribution strategy features, they can set up a "Virtual Catalog" for the new area that only includes a subset of goods or certain categories for testing, ensuring a strategic approach to entering the new market. The sales channel in Country B can only view the regional catalog, whether they test through their own regional online store or a marketplace, streamlining the browsing and purchasing process for local customers.
Moreover, stores can set different backup stock levels or safety stock levels for that area, customizing inventory management to meet the unique demands and challenges of the new market. By employing Fluent Order Management's distribution strategy capabilities, retailers can establish a strong presence in Country B while efficiently managing product offerings and inventory, ultimately leading to successful expansion and growth in the international market.
Controlling what products are sold in certain areas
After testing goes well, the store might be able to sell their whole collection in the new area. Some goods, however, might not be able to be shipped internationally. With Fluent Order Management's virtual catalogs, retailers can leave out certain groups or items from their regional catalog, allowing for a strategic distribution strategy. This flexibility goes as far as taking into account the qualities of the goods, giving you full control over what products are sold in which regions.
For example, items that are easily broken or have high shipping costs can be left out, ensuring efficient and cost-effective distribution in specific areas. Also, alcohol and tobacco can be left out if they are banned or heavily regulated in the new area, complying with local laws and regulations. Implementing an intelligent distribution strategy through virtual catalogs with Fluent Order Management allows retailers to optimize product offerings, streamline fulfillment processes, and cater to regional preferences and restrictions effectively. By leveraging such advanced features, retailers can successfully navigate the complexities of international markets, maximizing opportunities for growth and success in diverse regions.
2. Workflows and templates for delivery logic that can be changed
Fluent Order Management was made to be flexible and fit your business's specific needs, especially when it comes to delivery logic. This ability to change is especially important for global businesses.
Change the theory for sourcing based on the country
Every country has its own unique traits, ways of getting things to people, and most important things to get. Because of this, you might want to change the source logic for each country. For example, when you get an order, you might have to decide where to ship it from:
- Center for distribution inside the country
- Regional hub delivery center
- Store in the countryside
- Distribution center in the country where the company is based
There may also be other things to think about, such as reducing split shipments, figuring out how much space the store has for online sales, making sure there are enough shipping materials, and being able to handle customs paperwork if needed, all of which are crucial considerations for an effective distribution channels marketing strategy. Ensuring seamless and efficient order fulfillment across various sales channels requires careful planning and execution, taking into account inventory allocation, shipping logistics, and compliance with international regulations.
By incorporating these aspects into their distribution channels marketing approach, retailers can streamline operations, minimize shipping costs, and enhance customer satisfaction through timely and hassle-free deliveries. A well-optimized distribution channels marketing strategy empowers retailers to meet the demands of omnichannel selling while staying competitive in today's rapidly evolving retail landscape.
Order management that works well
Even though, at the most basic level, an order is processed, shipped, or made available for pick-up, those of us who are familiar with e-commerce know that the process is made up of several steps. The distribution marketing process comes into play during each of these steps, influencing the order orchestration method in each country and meeting different requirements for effective and localized distribution strategies. From order processing to shipping and fulfillment, retailers need to consider various distribution marketing factors, such as regional preferences, logistics capabilities, and customer expectations, to ensure seamless and efficient operations in each market.
By tailoring their distribution marketing approach to the unique needs of different countries, retailers can optimize the order fulfillment process, enhance delivery timelines, and offer a superior customer experience that drives customer loyalty and business growth. Emphasizing distribution marketing in the e-commerce ecosystem allows retailers to stay competitive, expand their international presence, and adapt to the evolving demands of the global market.
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