Last year retailers everywhere in every niche, B2B and B2C, had to either learn how to do Ecommerce and In-Store Fulfillment for the first time or learn to do it much better on a bigger scale than ever before. What businesses did to engage with customers on the front end – evolving their offerings into a multichannel or omnichannel presence – was not always matched by the evolution required in the back end for fulfillment.
Given that it has been about thirty years since technology allowed for orders from customers to reach fulfillment facilities on the same day, customers now derive the lion’s share of the their “satisfaction” from your ability to pick, pack and ship your items quickly. Transparency of information is a key element of that, because if your product doesn’t indicate a status of “shipped” within 24-48 hours of placing your order, then you are already falling behind what is considered “standard” for consumers who are now used to tracking their orders from within your facility and right to their front doors.
What is “Omnichannel”?
Omnichannel is a term that sounds no different than “multichannel”, but while the latter is exactly what it sounds like – “multiple channels” – that may be operating independently, the “omnichannel” experience is one where every channel (or touchpoint) offline or online are integrated to make the most immersive and personalized experience possible. Consumer retailers like REI, for example, connect the experience for their customers using their membership system, so that experiences online or in-store are seamless for the customer.
It means that you can return online items to your local store, order online and get it delivered to your home, or delivered to your local store after it gets shipped from another store that had the item you couldn’t find locally. “In-store fulfillment” became a trending term in the industry in 2020, but it is not a new thing for top retailers.
All of these things seem “normal” now to customers who are used to shopping wherever they are, whenever they want.
But most business still are not set up to engage their customers that way, and their fulfillment operations are even less equipped to handle the level of sophistication seen at some of the top retailers.
What it Takes to Master Omnichannel Fulfillment
One aspect that is important in this model is to recognize the role of your fulfillment center as a “service”. Being out of sight of your frontline and headquarter employees often means the role of your DC staff is overlooked or not nurtured in the same way as a the culture in the retail space is, but as noted above, they might have a bigger impact on your customer’s satisfaction levels.
On the fulfillment side of things, the list of processes and “services” your DC needs to learn and master to ensure your Ecommerce and In-store Fulfillment operations can meet expectations including some basic ones that will sound familiar:
- Picking Processes – you will need to pick both cases for your traditional distribution and single item orders to go directly to your customers. AND, some businesses will also need to pick single-item orders for customers that will go to retail locations to be picked up by the customer.
- Stores as Picking “Zones” – the line above should make it clear what you need to do in your warehouse, but for retailers, your STORES now become a picking location as well if you are willing to ship between them or from them for your customers.
- The Many Roles for Software – there is a LOT of work that is required of your software to make this work. If you are not using WMS, POS and other systems that are expandable with the additional modules and integrations, you might want to start looking for your future system.
- Inventory – visibility matters. Can your system show you what is in all your warehouses and stores, what is en route from a manufacturer, what is spoken for and what is available, etc? It’s surprising how many systems still haven’t mastered the complex series of counters and statuses needed to provide real-time information to customer and sales reps.
- Shipping – it’s important you have relationships with multiple shipping companies, and software that can optimize for the best option based on your priorities (i.e. speed vs. price).
- Packing – if you are new to the direct-to-customer side of business you’ll have already learned that you will need all kinds of boxes and bags of different sizes. Your packing teams should not have to guess what size box you need for a specific order, their packing list should tell them based on a calculation the software makes using the dimensions of each product going into the box.
- Dimensioning – One additional device that would come in handy is a dimensioning scale. Having all of the single-item products weighed and dimensioned and in your database will feed both your packing AND shipping modules to optimize them and ensure your shipping costs are not excessive because of oversized packaging or inaccurate “guesstimates” of package weight.
- Returns Processing – The speedy processing of Returns is another major aspect of making Ecommerce and In-store fulfillment work. Consumer returns need to be processed quickly – opened, checked for quality, redirected to their destination – and returned to stock, repair/refurbish or disposal (or return to manufacturer for credit). In this area, software is less important than strong, well thought-out policy and the specialized training required of a high-performing returns team to determine the proper status to assign to the incoming returns. The "Reverse Logistics" of your facility are now as important as the outbound process.
Omnichannel is Not “Be Everywhere”
Finally, it’s good to remember that evolving into an omnichannel business does not mean you need to be EVERYWHERE. It just means that the channels you DO choose to engage in are supported by systems and processes that keep them all linked together to maximize the experience for the customer. And more than ever, a growing share of how that satisfaction is achieved is going to fall on the distribution center and its infrastructure – the software and the equipment that contributes to the speed, accuracy and efficiency that customers now expect.
If your business is engaging with your customers in 3 channels but they are not linked and integrated to meet current standards, then investing in that integration and optimization in your back end is a higher priority than adding more channels. The potential return you will get by prioritizing your “omni” strategy will be much higher.
