Mastering Fulfillment in an Omnichannel World

8/20/2014
Due to the adoption and success of mobile shopping, consumer expectations have changed when it comes to engagement in retail environments. Today, retailers must allow their shoppers the option to shop anytime, online and in-store, while maintaining consistency throughout the entire shopping experience.

In a recent survey by eBay Enterprise, it was found that 77 percent of consumers expect retailers to provide a consistent experience both for their in-store and online channels. This demand from shoppers to maintain a seamless omnichannel brand experience also is changing their expectations when it comes to product fulfillment and inventory visibility.

Shoppers want options - whether it's the ability to order online and pick up the item from the store on their way home or to have it shipped to their individual location. If it happens that shoppers are looking for in-store pickup, they will want the ability to ensure the product is in stock at their chosen store and that it will be ready when they arrive at the store.

As for fulfillment, standard expected delivery time domestically has shortened down to a window of two to three days. With more shopping channels than ever, it has become a greater challenge to manage omnichannel distribution considering consumers' heightened expectations. Retailers are looking for solutions that will give them chain-wide inventory visibility and allow them to optimize how they can fulfill orders. 

The role of supply chains has greatly evolved in two ways due to this modern, complex omnichannel environment. The first is the visibility and ubiquity of inventory. Not all retailers have the ability to tie all their product back to a single source of inventory. Whether there is product in store or at a drop-ship vendor, having a single view on inventory has changed.

The other aspect is the advent of regional fulfillment. Some retailers have fulfillment centers on both the East and West Coast in order to complete a high percentage of their ground orders within a two- to three-day time period. There is competitive pressure for retailers to plan their inventory from two or three locations to deliver this consumer experience; however, we're still seeing many challenges with retailers' ability to execute this.

Operating more than one fulfillment center means understanding how much of your customer base is on the West Coast and what the product allocation should be for each fulfillment center to optimize your shipping and speed of delivery.  Fulfilling from multiple locations can also result in split-shipments with multiple packages being sent to a shopper, which is more costly for the retailer and is not the best consumer experience.

Additionally, when it comes to inventory planning and the allocation of product in an omnichannel environment, retailers are struggling to optimize. Loss of sales can be overwhelming from product being out of stock at individual retail locations or at centralized distribution centers. Retailers that embrace omnichannel distribution are able to go beyond a centralized distribution center and offer products available across the chain.

Solutions such as ship-from-store enable retailers to increase their sales by capturing opportunities that otherwise would have been lost. Making more inventory available to shoppers and providing convenience  greatly impacts a consumer's loyalty to a brand. Gone are the days of "out of stock," "back-ordered" or "I love that dress, but they don't have my size." 

In order to achieve full unified visibility, a combination of ship-from-store and regional fulfillment will optimize fulfillment and sales and provide the best consumer experience. With commerce turning to an on-demand model due to mobile ubiquity, universal access to online stores has created more real-time expectations. Consumers want everything to be faster and to have choices. If the product is not in the store, they want to be able to have it delivered to their home; if they need to speak with customer service and a representative is not available, they want to be able to immediately send a question via chat. Retailers that are not embracing this omnichannel evolution will lose sales.


Tom Barone is head of omnichannel operations North America for eBay Enterprise.
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