From offline to online Information Santiago Gallino – Tuck School of Business Toni Moreno – Kellogg School of Management January 2017 July 2013 – LBS – London, UK

Learning Modules 1. Demand forecasting 2. Inventory Decisions 3. Assortment Planning 4. Pricing Decisions 5. The omnichannel customer 6. Fulfilling omnichannel demand 7. Omnichannel journeys 8. Supporting an omnichannel strategy

M7.2 Providing Online Information 1 The online and the offline stores allow retailers to provide information. Traditionally retailers have focus on how the information provided in one store affected that store Today there are a number of examples that show how Retailers expand the they delivery information options Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

Information Delivered M7.2 Introduction 1 Fulfillment Offline Online Offline Information Delivered Online Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 BOPS 2 We are going to focus on different omni channel implementations and the relevance of information sharing in this context. Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 BOPS 2 Buy online Pick up in the store. Tell the story Why the company did this? What were the implementation challenges? What was the company expectation? This is information availability not on the product characteristics Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

7% 1% 6% 13% M7.2 BOPS 3 Results Implications online sales cart abandonment store sales 6% store traffic 13% Implications Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 BOPS 3 Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 BOPS 3 ROPO behavior has a different impact depending on your ownership structure Commodities Exclusive Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 Ship to Store 4 Explain the program Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 Ship to Store 4 Explain the implications Concentrated Dispersed 15 6 11 4 3 5 2 7 1 Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 Ship to Store 5 Explain the results STS increased sales dispersion Increase in dispersion generated from the shifting of sales high-demand to medium-demand products. Interpretation: STS affected the tradeoff between accessibility and preference Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 Ship to Store 5 Explain the implications Discuss the long tail Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face

M7.2 Closing 7 Simple things like sharing inventory availability can have a big impact Sharing location of items in the store Reducing phantom stock outs Sharing information on the staff available in the store Hair dressers Specialty Stores This implementations can be challenging Which information is good to share? Sometimes is hard to predict This things can be tested Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face