Optimizing Fulfillment: From Any Store to Any Customer

9/23/2014
A hot topic among retailers, customers and logistics professionals alike for years, omnichannel fulfillment is finally here. Whether shopping in person, buying online and picking up in store, or having merchandise sent directly to them, customers expect access to the same inventory.

Smart apparel retailers can blend the "I want it now" tug from customers with their own "I want inventory reduced from this particular store" perspectives to create win-win situations that move products efficiently along every sales channel. 

While online retailers without a brick-and-mortar presence rely on constructing regional warehouses near population centers to serve customers quickly, traditional retailers can tap into existing networks of stores to act as "mini-warehouses" and fulfill web orders directly from available inventories. This allows products to be sent from locations that are closer to customers, reducing shipping costs and expediting transit times.

This is vital to apparel retailers because fulfilling omnichannel orders directly from store shelves keeps inventory on display and out of warehouses and stockrooms; that opens it up to sale from e-commerce channels and brick-and-mortar customers at the same time. It also reduces barriers to thriving in the online space. For all but the largest e-commerce exclusive online-only retailers, maintaining a network of warehouses has become a hurdle to efficient e-commerce fulfillment — so much so that many retailers are abandoning this approach and moving to store-level fulfillment.

Multiple channel visibility
Apparel demand is highly affected by factors such as seasonality and trends, and rapid inventory turnover helps retailers ensure there is always room to replace SKUs with the newest items that consumers want most. Omnichannel fulfillment speeds up product churn by opening the market for each item, making it available on every channel, at the same time. Inventory that is available on every channel simultaneously moves off shelves more quickly, keeping it off clearance racks and creating space for the most popular inventory.

This type of availability also helps to streamline fulfillment regardless of which sales channel a sale takes place on. The prevalence of computers and mobile devices has quickly blurred the lines between these channels, turning the traditional sales funnel into a complex web of touchpoints across multiple channels where customers can enter and exit at any time. Many navigate this complicated web several times over using different entry and exit points before converting, and the journey is often unpredictable.

In today's omnichannel environment, it should not matter to the retailer which channel an order originates from; it should be fulfilled from whichever pool of inventory makes the most sense. The biggest question to answer is, "which store is best suited to fulfill this order?" For physical purchases, the answer is obvious, but there are many possibilities for online orders.

Optimizing fulfillment paths
Many retailers prioritize fulfillment by location because it typically makes the most sense to send orders from the closest store in order to minimize transit times and shipping costs. This is one parameter that can be used when choosing the most ideal shipping location, yet it may not always be the best. For example, what if a particular item is extremely popular on the west coast, but a location in Ohio has a glut of it in inventory? In this case, it may make sense to fulfill orders from Ohio until that inventory is reduced to acceptable levels.

Integrated retail management platforms are capable of determining which location is best suited to fulfill each order by prioritizing a list of parameters selected by the retailer. The software automatically routes each order to whichever location best achieves the overall operational strategy. Examples of parameters might include geolocation, available inventory quantity, or sell-through rates. 

Because the selection is based on a number of parameters, alternate stores are easily selected. If an employee at the chosen location is unable to fulfill the order for whatever reason, the system can re-route that order to the next best store. The parameters that dictate selection criteria can also be amended and updated as changes in season or strategy occur.

Every store is a shipping center
Retailers with multiple locations in each market often select only one store per area to fulfill online orders, but it is possible to make every store a shipping center. Shipping today has become a simplified process and retail systems can automatically route orders, calculate shipping, and print package labels. Any location with an available terminal and employee has the capability to fulfill online, mobile and phone orders. Every retailer, large or small, is now equally equipped to fulfill orders from every channel, from every store.

Modern consumers expect and demand fast and efficient merchandise fulfillment regardless of the channel they use to convert, and retailers must review their operations in response. Technology has leveled the playing field to allow retailers large and small the ability to streamline fulfillment based on both customers and inventory.

This is no longer a competitive advantage: it is necessary for survival.


Ian Goldman, president and CEO of Celerant Technology, is an expert software engineer and entrepreneurial enthusiast with an extensive knowledge of point of sale systems, CRM and inventory management.

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