Providing an Omni-Channel shopping experience (meaning the consumer is connected and tracked across all shopping channels, including those online and in person) for customers and clients is increasingly becoming the norm for businesses of all sizes. Customers have increasing expectations that their orders can be shipped to their homes or picked up at brick and mortar locations in a traceable, transparent fashion that integrates seamlessly with online ordering applications. Omni-Channel customers expect the best prices available and are becoming increasingly critical of how a given company’s supply chain operate even though they’ll never see the nuances of such a system.
This represents an enormous challenge to wholesalers and retailers who are becoming inundated with supply chain service requests when they may not be equipped to field with the old tools they have available. British wholesalers and retailers, for example, have seen online sales grow as much as 16% in 2014. Storefront delivery of online orders or “Bespoke” packages, as the Briticism goes, are increasingly becoming the norm. Within the next couple years online orders will represent the majority of sales in England. As such, the combination of processes, automation, and technologies (both insourced and outsourced) that support Omni-Channel shopping experiences are becoming increasingly important to businesses. Thankfully, smart supply chain integration is making these new models available at better costs than previous models.
|Fulfillment Model Guidelines|
|Daily Ordered Volume (packages)||Process, MHE Automation, and Technology|
|1 to 500||Mainly Manual|
|500 to 1000||System Directed Workflow|
|1000 to 2000||Workflow, Islands of Automation|
|2000 to 4000||Integrated Automation & Technology|
|greater than 4000||Automated Workflows|
If your business doesn’t yet offer Omni-Channel shopping, it may now be time to re-think your services and upgrade to a fulfillment model.
One of our clients at SupplyChainGroup – a wildly successful urban store pick-up – has 1100 packages daily, which is putting pressure on their space and manual processes and they simply cannot process anymore in this location. That’s the kind of supply chain success that we like to see. What we are learning is that time starved, Omni-Channel shoppers expect more from retailers, but they also buy more.
Keys to Omni-Channel fulfillment:
Time is not your friend. Yes, you will want to pack and ship or hold for pickup whenever possible within a day. Then deliver the package in the most cost effective manner that meets customer expectations. Today 2-3 day Amazon is becoming standard with a push toward 1 day taking shape for some items. Note that compared to store delivery, parcel carriers have their own schedules that need to be considered.
Inventory must exist somewhere near in the supply chain. Systems have to allocate and reserve inventory for customer orders and then be able to distribute the order through a cost effective delivery method for execution.
New fulfillment processes and methods need infrastructure. The processes and methods used to pick, pack, and ship small orders has to be very efficient. These are different systems and methods from those used for replenishing store stock.
Store operations activities are changing. Some stores can now be thought of almost as forward DC’s. With growing volumes it can be both inefficient and disruptive to simply pull store personnel from the sales floor to fulfill orders as well as returns.
Shipping cost effectively is critical. Some businesses are able to offset actual costs by charging shipping and handling fees. However, savvy customers consider this cost in their purchase decision. Updating network locations, improving packaging, and renegotiating carrier contracts may all need to come in to play.
Contact the SupplyChainGroup for a No Cost Benchmark Analysis
If this all seems like a lot to manage for your business this holiday season, don’t worry. The SupplyChainGroup is here to help. Call us today at (303) 746-2648 for a No Cost Benchmark Analysis and we can begin making Omni-Channel shopping experiences a reality for your customers.