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Making Sense of Omnichannel Fulfillment

Posted by Amanda Nadile on Jul 15, 2021

Like a fish without water or a bird without feathers, it’s hard to imagine a retail brand succeeding today without an omnichannel fulfillment strategy. 

Put simply, omnichannel fulfillment means facilitating orders according to the customer’s wishes. They can go to the store and shop. Buy online and pick up in-store (BOPIS). Have it shipped to their home or anywhere else they’d like. The supply chain becomes completely transparent. There are no business siloes, and data about customers, merchandise, and even issues are used to improve fulfillment practices. 

Your customers want what they want, when they want it. In fact, 66% say multiple fulfillment options influence their decision to convert. As an example, Home Depot and Lowe’s have changed the fulfillment game in home improvement by unifying digital and physical. Customers have the ability to quickly find where a particular item is in a large store by checking the website, which also lets them know how many are in stock. They can pick up in-store as well as use pick-up lockers, curbside delivery, and home shipments — whichever is most convenient.

Thanks to advances in cloud technology, smaller retail brands have also been able to offer a range of fulfillment options. For instance in Q4 of 2020, NewStore customer and premium hat brand Goorin Brothers saw 60% of web orders shipped from stores. Due to the “Amazon Effect,” consumers have high fulfillment expectations and those brands that aren’t paying attention are likely losing out to the competition.  

Order and Inventory Management Lead the Way

At the core of omnichannel fulfillment is an effective order management system (OMS). It orchestrates order routing, directing the fastest, most cost-efficient path to move merchandise from a store, factory, or distribution center to the customer’s fulfillment preference. Ideally, it also paints a picture of an order’s lifecycle with a real-time status update that is visible on any device. 

An omnichannel OMS also makes it easier to manage inventory. Rather than a giant central distribution center transporting products to stores in a region, stock is held in smaller warehouses and stores and shipped to homes nearby or picked up. This approach also allows retail brands to nimbly adjust to sudden changes in demand, quickly shifting inventory between warehouses and stores to reduce out-of-stock problems and sell at full price. 

Ship-from-store at Decathlon USA.

Giving Consumers Choices

When a shopper is looking for something to buy, they often start the process on their computer or mobile device. Even in the discovery phase, they’re considering how to get the product in their hands. The fulfillment options besides the traditional “look through the aisles for it” include:

Customer Benefits of Omnichannel Fulfillment

For shoppers, omnichannel fulfillment gives them freedom of choice. They can go to the store and shop the aisle the “old school” way. Buy online and pick up in-store. Have it shipped to their home or business, or perhaps pay a premium and have it shipped same-day.

The heart of the omnichannel philosophy is the data it generates about the customer and the merchandise they’re buying. This is critical to the customer experience. Even more, it ensures the brand is aware of their preferences and presents them with products they’re likely to be interested in and that have fulfillment options that suit their needs.

Keys to Easy Omnichannel Fulfillment

A Powerful OMS: Omnichannel will only be as good as your OMS. Is it easy to use? Can it help you make strategic business decisions? A good system is collecting orders from various channels and determining item-level routing for each one based on location, inventory availability, fulfillment capacity, and more. 

Efficient Pick, Pack & Ship: In-store employees in an omnichannel operation must know that they’re serving not only customers in-store but those online as well. Like warehouse staff, they need to know how to quickly fill a ship-from-store or BOPIS order. Making sure these tasks are prioritized as much as helping the in-store shopper will go a long way toward boosting customer satisfaction scores. 

Making Pickup Easy: People like BOPIS but they don’t like to wait. Having trained staff with easy-to-use solutions for pickups, plus clear signage directing customers to the pickup location, is the ideal. If that’s not feasible, this is where the convenience of pickup lockers can help. 

Challenges and Opportunities

Omnichannel fulfillment is both a challenge and an opportunity. Expanding your fulfillment channels requires your organization to stretch and go beyond its boundaries. You need to push the envelope to get products to consumers quickly and economically. The opportunities, however, are that doing so will increase customer loyalty and lifetime value. It’s worth the more dollars-per-sale and the healthier bottom line if you get it right.

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