A road map for omnichannel fulfillment

Advancing your omnichannel retail strategy

As the first COVID-19 holiday season approaches, a retailer’s success will depend on their ability to leverage a variety of fulfillment options as consumers are choosing to shop from home rather than visit stores in-person. Now is the time for retailers to assess their omnichannel fulfillment strategies.

Preparing for holiday shopping: Omnichannel retail trends

This holiday shopping season will look very different compared to years prior. Many companies have suffered disruption due to the pandemic and are adapting to a new normal created by consumer preferences and safety protocols. This is driving increased in-store and online shopping integration, so that the path toward purchase—and fulfillment—is not based on satisfaction in one channel over another, but rather on safety, convenience, and flexibility.

One approach legacy brick-and-mortar retailers have taken is using retail locations for omnichannel fulfillment, taking advantage of local store inventory while minimizing shipping costs.

Thirty two percent of retailers currently allow customers to buy items online and pick them up in-store, while 75% enable in-store returns of online merchandise. A recent survey found 76% of retailers use store inventory to fill online orders, and 86% plan to implement “order online/pick up in-store” within the next year.

While the attractiveness of using stores as fulfillment centers is clear, there are a host of issues, ranging from inventory availability to systemic inflexibility within physical stores. Though an important first step, this is not the end goal on the path to omnichannel fulfillment.

A road map for omni-channel fulfillment

Prepare for challenges and risks in your omnichannel retail strategy

Some of the greatest challenges retailers face as they implement omnichannel fulfillment include managing inventory and stock, optimizing the packages-per-order ratio, leveraging technology to enhance customer experience and satisfaction, and, most importantly, minimizing impact on human capital.

How can retailers strategize and execute omnichannel fulfillment effectively?

As retailers recover from the disruption caused by the pandemic, they are adapting to the increase in fulfillment volume from stores, due to a large increase in online sales, store fulfillment, pick up in-store, and curbside. This requires them to convert backrooms into fulfillment floors while managing higher-than-normal inventory on the store floor due to shutdowns

However, many retailers with small backrooms could use closed stores’ assets as local fulfillment centers (dark stores), enabling a rapid increase in their omnichannel fulfillment capacity. This could also provide opportunities to automate fulfillment functions with stackable and other automated picking and packing technologies designed for a relatively small footprint, maximizing space utilization and labor productivity while reducing fulfillment costs.

So what does this all mean?

The current environment is a challenge for retailers who have had to pivot as consumers favor convenience.

Addressing the desires of the omnichannel consumer through in-store fulfillment is a necessary step toward the next stage of the retail experience. It revolves around an ecosystem of products, services, and the networks of all partners to seamlessly meet customer needs.

To reach this next phase, retailers must take a holistic approach toward every aspect of omnichannel fulfillment: merchandise, technology, store operations, and supply chain. Doing so requires a road map for microfulfillment and automation at the store level, integrating technology, material handling solutions, and process discipline into a multivariant solution. The introduction of smaller, smarter, and integrated solutions is the long-term key to omnichannel fulfillment.

The need for urgency in your omnichannel retail strategy

As you prepare for the holiday season, the pandemic is already resurging in many parts of the country and world, adding further complexity to preparing your omnichannel retail strategy. This demands greater urgency in establishing infrastructure and positioning your supply chain to be able to react to changing market conditions, minimizing impact on your bottom line by leveraging inventory and assets across your network.

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