As Supply chains are reeling under increasing pressure from competition, omni-channel consumer expectations and the likes of Amazon (employing disruptive technologies), companies are trying to re-align and focus on the immediate challenges. One of the prime forces that all Retailers have talked about at the 2014 NRF is the planning of the omni channel strategy and its successful execution. This Blog digs deeper into the omni channel fulfillment aspect of that strategy
Research by IBM5 reveals that the five most important omni-channel capabilities are:
While the key success factors are just touching the very high level, it becomes important to understand the extent of “seamlessness” in omni-channel shopping experience is envisioned by the leaders.
All of these steps above are just a part of the overall retailer- omni-channel strategy but needs to be empowered via Omni-channel marketing and fulfillment strategies.
OMS cornerstone in omni-channel
Looking at the benchmarking research report on ‘Omni-Channel Fulfillment and the Future of Retail Supply Chain’ it is very clear that back then (March 2011) it was the deep seated nature of the supply chain issues impacting fulfillment. Inventory and order management systems (OMS) arent’ integrated across channels and the supply chains were never designed for omni-channel fulfillment6.
This is fast changing now. During 2011 – 2014, many OMS vendors have geared up their functionality to provide the functionality and we are increasingly seeing retailers use the seamlessness to their advantage. Today’s OMS powerhouses are equipping the e-tailers with functionality to not only be seamless but also have ways to rid them of late-season-distress due to too much inventory toward end of the season, avoid out-of-stocks during mid-season-promos, avoid Peak-season by optimizing all fulfillment options. The recent deluge of OMS vendor acquisitions by e-commerce giants (IBM, Netsuite, hybris, Ecommera, Demandware and others) again strengthen the need for strong OMS capabilities for e-Commerce.
Increased mobile fulfillment devices
Renewed focus on the supply chain has then brought attention to significant changes in fulfillment that will now come from the growing use of mobile devices. The 2012 Retail Vision Survey showed that in the next five years the most dramatic shift will be in the in-store pickup of goods ordered on mobile devices. This is an option predicted to virtually double by 2017.
DC operations continuous improvement
The Retailer Distribution operations will need re-imagine their changing role in the supply chain. DC now also has the responsibility to predict the velocity of a SKU whereas that used to come from the storefront. With Direct to Consumer and drop ship strategies, there is little cushion remaining for the DC operations.
Shipping costs reduction and optimizing on Freight
It is known that “72% of the TOP 50 US online retailers offer either ‘free shipping’ or free shipping with an order threshold, the pressure is on the holdouts to reduce or eliminate the shipping costs in order to maintain the competitive relevance” 7.
Forging the omni-commerce logistics strategy
while firming up the omni-commerce logistics strategy, one should note that the major models being utilized to date by many retailers including National Fulfillment Centre, Regional Fulfillment Centres, Ship From Distibution Centre, Ship From All Stores, Regional Hub Stores, Pick Up Centres and/or Lockerboxes, Drop Ship From Vendors will NOT be a one size fits all.
So, this requires the retailer and experts to perform a complete analysis of the business and come up with a sophisticated omni-commerce network strategy model after weighing in on the advantages, disadvantages keeping in mind the true North direction envisioned by the CXOs.
In Summary, it is clear from the article that the Bottom Line is:
The customer wants WHAT they want, WHEN they want it, WHERE they want it and at the PRICE they want it. And if the retailer or E-tailer doesn’t have it, they better get it to the consumer soon, or they’ll buy it from Amazon (or their likes) who will very soon with NO shipping fee.
Retailers are doing everything they can in their power to enhance and optimize their end-to-end processes and what is worth noting is that it is the fulfillment strategy and tailored strategy that leads to business excellence and customer retention.
If you feel that your company could benefit from an assessment and/or consultation from Newmine’s omni-channel pros, please get in touch with Mark by clicking here.