Omnichannel fulfillment: The next big thing in e-commerce

October 24, 2021 1:28 PM

The success of omnichannel fulfillment rests on the efficiency of the inventory or warehouse management software

The next thing to consider for omnichannel fulfillment is how to conduct shipping from a physical store to the customer’s doorstep

By Saswat Samal

The buying behaviour of consumers has been changing ever since modern e-commerce came into existence about two decades ago. But what looked like a steadily changing ecosystem was suddenly thrown out of balance with the start of the covid pandemic. As country-wide lockdowns dwindled the footfall to physical stores, online sales witnessed a whopping 10x increase. Till now a lot of brands used to believe that Old Stock Merchandise (OSM) should be displayed on e-commerce websites while New Stock Merchandise (NSM) is fit for offline stores. But the past year’s shifting consumer trends and huge e-commerce adoption have shown us that customers are now shopping omnichannel. Brands have started to realise that the best way to get higher visibility on products and higher conversions is by having a unified inventory that is accessible through both online and offline channels. And that is the crux of omnichannel fulfillment.

What is omnichannel fulfillment?

Omnichannel fulfillment merges inventory across all selling channels like stores, virtual marketplaces, e-commerce websites, social media sites, and brand.coms and treats it as a single unit. Meaning, a brand can choose to fulfill an order placed on their online platform from their physical store anywhere in the world. By exposing 100% of their inventory to fulfill customer orders, brands can leverage their existing brick-and-mortar stores to offer much faster deliveries to their customers.

In the omnichannel fulfillment model, stores act as fulfillment centers. For example, if a brand used two warehouses to store and deliver e-commerce orders, it can now do so from all of its stores scattered across the country. Synchronising inventory and showcasing it throughout all channels simultaneously means better exposure and increased sales. It also means that stuck store revenue like unsold inventory can now get a fresh lease of life by being made available on the online marketplace.

Another major reason brands are looking toward omnichannel fulfillment is because it frees up the working capital. If a brand restricts its assortment of inventory to specific channels, it also blocks the financial resource that it can use in improving other aspects of its business. By making their inventory flexible and letting customers choose the sales channel, brands no longer need to strategise which items will sell better on which platforms.

What are the benefits of using omnichannel fulfillment?

Grocery and food delivery apps like Zomato, Grofers, Swiggy, BigBasket, etc., have set the gold standard for instant delivery. The Amazon effect too has normalised faster same-day and next-day deliveries. Given the rising customer expectations, omnichannel fulfillment seems like the need of the hour.

Since the omnichannel model turns local stores of the brand into fulfillment centers, a customer order from a nearby location can be directly delivered by the physical store instead of the central warehouse located in a different city. For instance, if a customer in Mumbai places an online order on the Zara website, he/she can receive the order directly from Zara’s Mumbai store. As a result, the order which could have otherwise taken five days to deliver will reach the customer within a single day because of the omnichannel approach.

Not only that, but sourcing orders from local stores of the brand also cut down on logistics and shipping costs. With omnichannel fulfillment, online and offline retailers do not need to employ large delivery fleet services for transportation. They can even choose to work with hyperlocal delivery courier providers to deliver orders efficiently at cheaper rates.

By displaying all their stock on offline and online platforms, brands give customers a larger selection of products to choose from. This enhances customer satisfaction and builds brand loyalty. As first responders in the logistics industry, we believe, that as omnichannel adoption increases, brands will start responding to customer needs by providing ROPIS (Reserve online, Pick-Up In-Store), BORIS (Buy Online Return In Store), and BOPIS (Buy Online Pick-Up In-Store) options. Mixing the online and offline retail experience will not only lower the rate of returns but also help brands tackle reverse logistics in a cost-effective manner.

Things to consider for an optimised omnichannel experience:

1) The success of omnichannel fulfillment rests on the efficiency of the inventory or warehouse management software a brand uses. Omnichannel is not a manual process. It is a heavily automated system that requires intelligent logistics software to sync order data, inventory, and customer information across all channels in a single unified platform. The logistics SaaS platform you choose should allow integrations with marketplaces, websites, Warehouse and Order Management Systems (WMS and OMS), etc.

2) The prerequisite to providing omnichannel fulfillment is transparency and communication between all channels. For this, brands must store inventory information from all sales channels and record inventory in real-time. Your logistics software can do this by collecting stock data into a centralized database which will allow free flow of information between all sales channels. The omnichannel system updates inventory within a couple of minutes. So there are no chances of receiving orders on items that are out of stock.

3) The next thing to consider for omnichannel fulfillment is how to conduct shipping from a physical store to the customer’s doorstep. Some retailers choose to train their own staff for better utilization of the available workforce. Others rely entirely on the assistance of hyperlocal delivery partners to manage shipping operations. You can choose one or a mix of both for your delivery operations. Alternatively, you can also opt for intelligent logistics software like that comes pre-integrated with numerous hyperlocal delivery carriers like Shadowfax, Dunzo, BlowHorn, etc. Since individually integrating with hyperlocal delivery providers is very difficult, partnering with SaaS platforms can seriously ease business operations so that you can start shipping without skipping a beat. Of course, this decision depends on the brand’s needs and its availability of resources.

4)The last thing brands should consider for an optimized omnichannel strategy is a robust order tracking mechanism. Order tracking is one of the most critical aspects of order fulfillment that directly affects customer satisfaction. Therefore, brands must pay careful attention to maintaining a transparent line of communication between customers and sellers so that orders can be tracked in real-time. Brands should keep in mind that between sourcing and delivering orders from nearby locations, the order tracking system should remain intact.

It goes without saying that tech enablement is the key to cracking omnichannel fulfillment. True inventory omnification coupled with API integrations with hyperlocal carriers is guaranteed to bring brands closer to customers. We live in the world of social commerce where buying and selling happen alongside conversations on platforms like WhatsApp and WeChat. Introducing omnichannel to your business opens doors to accessing these newer avenues and reaching a much wider audience. Today, your goal should not just be hitting higher sales in a particular channel but to allow your customers to buy naturally from the channel they are most comfortable with.

(The author is e-commerce expert, ClickPost. Views expressed are personal.)

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