Retail Trends

How to do omnichannel fulfillment well

2 min read

Omnichannel consumers today expect a superior experience when they interact with a retailer. Irrespective of which channel they use, they want the option to have orders delivered where they want and a time they choose.

Heightened expectations in terms of   flexible delivery and returns policies have become more and more important to consumers, making fulfillment a top priority for progressive retailers.

A 2016 report by Aberdeen Group says that the growth of end-customer fulfillment has increased by 45%.  It also says that 70% of retailers considered adopting more efficient warehouse and store-level processes as the most crucial in addressing profitability and reducing operating expenses.

In a new study by JD Associates, more than two thirds of the top 250 retailers said omnichannel fulfillment was an investment priority. On average, 29 percent of capital expenditures last year went to solutions like transportation and logistics, delivery options, order management, inventory visibility and returns management. However, according to the same study, only 19%  are currently fulfilling omnichannel demand profitably.

Leverage locations

Today’s omnichannel supply chain adds labor costs and process steps that can drive up operating if the whole system is not integrated properly.

In one way, large retailers have an advantage because they already have an established logistics infrastructure and distribution network in place.

However, instead of making routine bulk shipments to stores, retailers must leverage the stock in the store as well as in the distribution center to accommodate a larger number of individual (small) orders as cost-effectively as possible.

To lower last-mile costs, it is critical to ship to customers from the closest location to them, be it a store or a distribution center. Additional distribution centers can also lower the cost of shipping to stores and customers as needed.

Support multi-directional inventory flows

The ability to accept returns, put things back into the system and make them look brand new for resale is not so simple when you are talking about products of all sorts and sizes.

Before, returns would basically end up as markdowns. Real-time visibility of inventory across all stores and distribution centers makes it possible to manage orders and returns more efficiently.

Global athletic apparel company Lululemon has attributed its recent growth in revenue to their technological integration of inventory management and fulfillment.  While online sales represent only a fifth of the total revenue, the growth in online sales was accompanied by in-store sales as well.

To find out more about successful strategies for improving the range and reliability of  your fulfillment options, sign up for the Openbravo webinar, Innovative Logistics Strategies for Omnichannel Fulfillment

Thursday 15th of September at 11:30 CEST in English

Thursday 15th of September at 17:00 CEST in Spanish