Omnichannel has become the preferred shopping method for most consumers. Commerce was trending toward omnichannel before 2020, but the pandemic lockdown measures spurred increased adoption by businesses and customers alike. Today, companies that aren’t using omnichannel sales and fulfillment are leaving money on the table.
Omnichannel fulfillment, also called omnifulfillment or omni-channel fulfillment, is the method by which a single business fulfills orders placed across a variety of sales channels. Those sales channels may include the brand’s ecommerce website, marketplaces like Amazon, and partner retail stores. Omnichannel fulfillment involves using the company’s own warehouse or a 3PL to receive, store, pick, pack, and ship orders to customers, whether those customers are consumers or other businesses. This flexibility allows companies to streamline fulfillment operations and grow sales by meeting customers at multiple points of sale.
Omnichannel fulfillment is often confused with multichannel fulfillment, but there is a significant difference between the two. Omnifulfillment refers to operations in which all sales are fulfilled through the same source, whether that’s a single warehouse or a network of warehouses operated under one umbrella. Under a multichannel fulfillment strategy, a company fulfills orders from various sales channels using siloed fulfillment centers that are dedicated to a given sales channel. In other words, retail purchase orders are fulfilled through one warehouse or fulfillment partner, while direct-to-consumer ecommerce orders are fulfilled by another—and these fulfillment centers do not share inventory.
Omnichannel fulfillment streamlines the fulfillment process to increase efficiency, lower costs, and deliver orders to the customer more quickly.
By bringing all orders under one warehouse roof, so to speak, companies can stay agile and keep up with ever-changing consumer preferences. It also simplifies inventory management and warehouse management, because the business isn’t keeping tabs on a different fulfillment channel for each type of sale. With omnichannel fulfillment, the company benefits from having a single source of truth when tracking stock levels, order status, and shipping efficiency.
Omnichannel fulfillment also reduces the time between customers ordering and receiving products. Thanks to ecommerce giants like Amazon, there is a growing demand for near-instant gratification—many consumers expect their ecommerce orders to arrive in three days or less. The companies that can provide that gratification fastest—without sacrificing quality or breaking the bank—can lead their markets.
Ultimately, omnichannel fulfillment is all about making order management and fulfillment easier and more efficient. In turn, the company may see healthier margins, happier customers, and more opportunities for growth.
When customers have more flexibility in how they connect with a brand, it improves their perception of that brand. Simply seeing the brand’s colors and logo in more places can foster a greater sense of trust, and brands that got their start online may have the opportunity to interact with customers in a more tactile way by expanding into retail channels, which is especially important in certain market verticals like apparel.
Today’s brands need to meet customers wherever they are, and expanding into additional sales channels may help lower customer acquisition costs. The brand may be introduced to consumers who wouldn’t have otherwise found them. Alternatively, customers who typically make a purchase through one channel—say, the ecommerce store—might be encouraged to stay loyal to the brand if they have other buying options. For example, consider a customer who typically buys razors online, but forgot to place an order and needs a fresh razor—stat. If they can buy their preferred brand at the local store instead of waiting three to five days for an order to arrive, they’re more likely to stick with the tried-and-true product instead of settling for a readily available alternative.
Omnichannel systems put more information in the hands of workers who need it by creating a central source of information. That valuable and detailed information helps them work more efficiently, potentially keeping a better handle on inventory levels, reorder points (ROPs), and economic order quantity (EOQ).
With the benefit of real-time reporting, companies can monitor critical operations information and adjust accordingly. Whether it’s placing an unexpected restock order or changing the company’s primary shipping method to increase efficiency, seeing the business’ performance metrics in real-time helps brands to stay at the top of their game.
Most ecommerce brands that move to an omnichannel fulfillment strategy are expanding into physical stores through partnerships with retailers. While these partnerships can significantly boost a company’s revenue, they come with their own unique challenges.
Some of the most commonly reported challenges of retail expansion are redefining company strategy, integrating online and offline channels, and determining how and where to prepare orders. These decisions take a considerable amount of time and effort on the part of the company, so it’s best to focus on one or two strategic retail partnerships to start.
As brands branch out into more sales channels, they’ll also need to contend with quickly evolving technologies, stock shortages, and demand planning. Before taking on retail partnerships, the company’s leadership should educate themselves on the unique demands of wholesale fulfillment and wholesale inventory management.
Looking to launch a retail partnership? Learn how to prepare your company and distribution strategy for wholesale orders.
Modern consumers want the ability to seamlessly move across sales channels depending on their needs and convenience. Omnichannel fulfillment improves the customer experience by allowing them to do exactly that, buying from the same brand through their ecommerce site one week and their local department store the next. Streamlining fulfillment across these channels keeps customers engaged while providing the brand with the whole picture across each point of sale.
Omnichannel fulfillment also empowers companies to deliver orders faster, which is a key consideration during the buying process for most consumers. Multiwarehousing strategy can play a key role here: a company with warehouses in California and New York can automatically route orders to the warehouse closest to the customer, reducing the number of shipping zones a package must travel through and expediting the shipping process.
If you’re looking for ways to make fulfillment more efficient and improve customer experience, Airhouse can help. Contact our fulfillment experts today to discuss omnichannel fulfillment solutions that fit your needs.
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