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The Pros and Cons of Omni-Channel Retail Logistics

Posted by Kristen Melendez on Tue, Aug 06, 2013 @ 09:00 AM

Omni-channel retail logistics

There’s a lot of good to be had from omni-channel distribution, but it also comes with a lot of challenges. As businesses move to make the customer experience seamless across the storefront, web, and mobile apps, many are learning that there’s a lot more that goes into a satisfying customer experience than they may have thought. Fulfilling orders based on location is a great idea, and gets the item to a customer more quickly, but fulfillment like that requires a lot of logistics. There are pros and cons to omni-channel distribution, but there are ways to make the most of it.

The Upside

Customers today want to interact with a business in any way imaginable. They want to visit the actual stores, they want to browse special web-only sales, and they want an app on their phone that will help them find items that they may like. Making customer interaction across these platforms as smooth as possible means the customer is going to have a great experience with a store. Omni-channel distribution means you can:

  • Fulfill orders based on where the customer is located. If there’s a store located near him or her, packing and shipping the item from there makes more sense than shipping across the country and taking twice the time.
  • Sell more items. When customers are happy with their experience with you, and you’re giving them as many outlets as possible to purchase things from you, they’re likely to buy more—especially if the store gives them special sales and offers only available through specific platforms.
  • Be more efficient. Items often have to be marked down to low prices to make way for new styles or updated technology. Omni-channel distribution lets you move more products without necessarily moving everything to a clearance rack. Someone somewhere wants the item and is willing to pay for it, and fulfilling from stores lets retailers get more inventory into the hands of customers.

The Downside

Omni-channel distribution, as great as it is, is complicated. It requires that a large number of people in a lot of different places all be on the same page. A few of these things are necessary for omni-channel distribution to be efficient, and while they may seem like drawbacks, they’ll help to create the best experience for customers. Think of these as an investment.

  • A dedicated fulfillment employee. If a retailer is fulfilling orders from a store, drawing the sales team away from customers who are in the store shopping doesn’t help for a great experience. Each store should have one employee (or rotating) whose sole job is to fulfill online orders.
  • Special in-store items. E-commerce fulfillment works on every level, but there’s still something to be said for shoppers who make snap decisions on items when they’re in the store. If they can buy something that isn’t available online, they may buy other items along with it.
  • Software. There’s no more efficient way to communicate e-commerce sales across a network of stores than good software. Phones and fax machines just aren’t efficient. The right technology allows retailers to fulfill orders very efficiently. 
Benefits of Outsourcing E-commerce Fulfillment and Returns Case Study

Topics: Supply Chain, Store Fulfillment, Shipping, Pooled Distribution, Retail, 3PL