Over the past 20 years, how consumers interact and shop with companies has changed drastically. Before the rise of ecommerce in the late 2000s, many customers craved exceptional service at brick-and-mortar shops. However, the buying journey significantly shifted during the early and mid-2010s as more and more people sought a seamless shopping experience across platforms. Customers expected consistency across online stores, brick-and-mortar shops and mobile apps, so organizations responded with a new omnichannel fulfillment strategy.
In today's marketplace, 73% of retail consumers are omnichannel shoppers. Companies that haven't adopted an omnichannel fulfillment approach are missing out on opportunities to grow revenue and losing out to competitors. The following sections will offer a closer look at omnichannel fulfillment and how it can benefit organizations still using a multichannel strategy.
Unlike other types of fulfillment strategies, omnichannel fulfillment is a comprehensive process that integrates a variety of sales channels to fulfill customer orders, including:
Since the strategy's main objective is to deliver a seamless experience, consumers should have a consistent buying journey regardless of how they shop.
One of the key advantages of an omnichannel fulfillment strategy is the flexibility and convenience it offers customers. Instead of being limited to a single purchasing method, consumers can now choose when, where and how they receive their items, enhancing their overall shopping experience.
Your distribution network is the system of interconnected warehouses, transportation and logistics facilities that manage the storage and movement of goods. It supports omnichannel fulfillment by making inventory available across multiple sales channels, such as physical stores, ecommerce sites and marketplaces. This enables faster, more efficient order fulfillment and a seamless customer experience across all platforms.
A unique defining element of omnichannel fulfillment is how an organization manages its inventory. Since an omnichannel strategy aims to balance supply and demand while offering flexible and reliable delivery options, having the appropriate inventory management plan is crucial. For many organizations, this means managing SKUs through a centralized system that provides real-time visibility across multiple sales channels. This approach makes tracking stock levels in warehouses, stores and distribution centers easier and ensures accurate inventory levels.
One of the biggest perks of the centralized system is that it allows companies to optimize delivery by routing orders from the closest stock location. With the added shipping flexibility, customers receive their products quicker than waiting for an item to ship from a single location.
While omnichannel fulfillment is considered one of the best ways of managing inventory for multiple sales channels, some organizations still rely on a multichannel approach. Below is a closer look at how the two strategies compare on several key elements.
|
Characteristic |
Multichannel Fulfillment |
Omnichannel Fulfillment |
|
Efficiency |
Higher likelihood of overstocking or stockouts due to isolated inventory management |
Inventory is optimized across all channels, helping to reduce costs and shipping times |
|
Flexibility |
Limited flexibility for customers. E.g., separate return and pickup policies per channel |
Highly flexible model with customer options, such as:
|
|
Scalability |
More complex since each channel has its own infrastructure |
The unified system concept allows for easier scalability across all channels |
|
Customer experience |
With each channel operating independently, the experience can be inconsistent |
A focus is put on delivering a unified experience across all channels, including in-store, online, and mobile |
|
Data & systems |
Each channel often relies on a separate system, making it a challenge to communicate data in real-time |
Relies on fully integrated systems for real-time updates and streamlined processes |
|
Inventory management |
Inventory is typically siloed per channel, with separate stock for each sales platform |
Inventory is centralized and shared across all channels |
|
Order fulfillment |
Specific locations are designated to fill orders for each channel |
Orders can be fulfilled from any available location based on the shipping address |
Multichannel fulfillment might not provide the same flexibility as an omnichannel strategy, but it is still an effective way to manage a business. The approach is often simpler to set up and allows for channel-specific strategies and targeted marketing.
Many organizations view omnichannel fulfillment as the gold standard for organizations looking to create a seamless, customer-focused shopping experience across multiple channels. However, it does pose challenges with its complex implementation and data requirements.
Organizations with a multichannel fulfillment process may find it challenging to migrate to an omnichannel approach. Roadblocks, such as advanced technology requirements and high upfront costs, can be uphill battles when shifting strategies. One way to navigate the potential issues is to work with an experienced 3PL and omnichannel fulfillment provider. These partnerships make it easier to scale fulfillment across eCommerce, retail and wholesale distribution channels while improving the overall customer experience. Below are three additional benefits of working with an omnichannel fulfillment provider.
With consumers' added pressure to deliver an exceptional customer experience across all channels, organizations are being forced to adopt an omnichannel fulfillment strategy. While the benefits of transitioning to the new approach are clear, it can be challenging for companies with limited resources to fully commit to becoming omnichannel. One way businesses can remain competitive while moving away from multichannel fulfillment is with the help of an experienced omnichannel fulfillment provider.
With Cart.com, brands can create a seamless customer experience by utilizing our fulfillment services, order management system and warehouse management software to provide real-time inventory visibility. Contact us today to see how we're helping national brands grow through omnichannel fulfillment.