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Growth calendar    Nov 16, 2021

What is omnichannel fulfillment?

Looking for omnichannel ecommerce definition? It’s a business model where a company offers various ways to fulfill customers’ orders via multiple channels.

“Omnichannel” and “fulfillment” are recently popular, often used and widely covered topics, that’s for sure. If you are a modern ecommerce, trying to stay up to date with trends, and in search of the best strategy to maximise your incomes and perfectly fulfilling customer orders, you may be familiar with those terms. It’s no longer an option only for big businesses and global brands. Also, smaller players can apply smart strategies to satisfy their customers. Anyhow, we find it all so important and interesting that we’ve decided to take a closer look at what omnichannel fulfillment is and give you a better view of what it can bring to you and your business.

What is omnichannel order fulfillment and how can it help grow your ecommerce?

What is omnichannel ecommerce? It’s a business model in which a company offers various ways to fulfill customers’ orders via multiple channels. It connects all company’s touchpoints: shops, website, social, email, mobile with a supply chain. A few decades ago, to buy a thing, you had to do nothing but put on your shoes and go to a brick and mortar store. Sometimes it was a seller, to ring the bell at your door, proposing the stuff they had to sell, not always something you’ve needed at that moment. Sales were rather a single-channel model, but once the internet hit households around the globe, it has changed. Also, typical stores have been given new forms – shopping malls, mobile stands, etc. It has all brought a sales process evolution, of which result is multi- and omnichannel sales. Nowadays, if you want to buy, for example, a pair of glasses, you can do this in many ways:

  • Select an optician, and go there by yourself, this is still a shopping way many consumers prefer,
  • Search perfect ones comfortably at home, online, and order them with delivery to a shop (BOPIS – Buy Online – Pick-up in Store),
  • Find glasses frames in some eShop and order them online.

With so many options, every customer will find the proper way to buy the goods they need, as they like the most. In the next paragraph we will cover the strategies of omnichannel from an ecommerce point of view, but let’s stay with the customer for the moment. Why it is so important to give your clients a wide choice of buying processes? Why should you put a focus on that? Why should you consider an omnichannel fulfillment, on top of a multi-channel one?

The answer is obvious and has a lot to do with one of the most important indicators of business success – customer satisfaction. The order must be fulfilled in the shortest time possible, at the lowest cost possible, meeting all customer’s needs and without any mistakes. It’s a huge challenge for logistics. In an omnichannel system, supported by dedicated software, the most convenient flow is being selected, to meet all the requirements. Uniting the channels allows them to reinforce and connect their strengths. By contrast, a multi-channel process has less flexible paths and often needs more time to fulfill the order.

digital-marketing

Omnichannel fulfillment strategies

As mentioned above, omnichannel fulfillment draws many lines in an order flow map. It’s driven by the optimisation of warehouses, their locations, inventory, delivery, customer preferences. The management of the orders allows such strategies as:

  • Store-to-customer,
  • Warehouse-to-store,
  • Store-to-store,
  • Warehouse-to-customer,
  • Customer-to-warehouse,
  • Warehouse-to-pickup location,
  • Customer-to-store,
  • Or any mix of the above.

In other words, omnichannel fulfillment has a lot to do with such approaches as:

  • Buy Online – Pick Up in Store (BOPIS),
  • 3PL outsourcing,
  • Dropshipping,
  • Pick Up points,
  • Self-managed fulfillment.

How to draw the map correctly to ensure an error-free, most convenient order fulfillment process for your customers? Which channels activate and how to connect them? A complex omnichannel fulfillment strategy involves many aspects and is a task that can consume a lot of time and effort of retailers. However, some companies that offer complex fulfillment services, that can help with an omnichannel strategy.

What is essential for starting successfully an omnichannel fulfillment for your business?

Many channels, one shop

If you start offering many sales channels, you must be sure they are somehow connected, represent one brand, do not disturb each other. If everything must be joined together seamlessly, you have to be sure all your operations, locations, systems work together perfectly and do not block any type of order.

Real-time tracking

An omnichannel solution is a very dynamic environment – orders and their specifications affect other components of the system. Stock levels, tracking delivery, returns – it’s impossible to manage it all without a system that gives you a real-time view of your sales. his might involve working with new partners like a 3PL that specializes in omnichannel fulfillment to help pick and pack orders and centralize your fulfillment operations.

Correct forecasting

Having few places where you store your goods, few channels through which your orders come, and customers that you want to satisfy, requires very good planning. Good means it’s flexible, transparent, covering different timelines. AI and predictive stocks are something that goes hand in hand with omnichannel fulfillment, as well as a modern fulfillment center.

Even more focus on the customer

Increase personalized services, create a high-level buying experience, analyze your customers to serve them with the solution each of them needs.

Linker Fulfillment Network. Chart showing omnichannel customers spendings.

Source: https://www.bloomreach.com/en/blog/2019/07/omnichannel-commerce-for-business.html

Benefits of omnichannel fulfillment in ecommerce

Omnichannel fulfillment is a trend that will develop in the future, no doubts. What are the biggest benefits ecommerce can expect by expanding its sales channels to Omni- ones?

Cost reduction

It refers the most to inventory cost, but not only. Scaling the business, expanding to new markets, launching new products often means for SKU, more orders, also more returns. If you rely on a classic one-line approach: factory – warehouse – customer you may face the problem with difficulty to manage your stock space, staffing, and other resources. Omnichannel allows you to synchronise the data, in a way you can shorten the sales cycle and save the costs of warehousing and other spendings.

Time reduction

A shorter cycle means also faster delivery, as the product is available and closer to your customer. It can be delivered in shorter times than usual package, which brings benefits for everyone.

Buyer satisfaction

This is the topic we started our consideration with. Customer satisfaction is a key thing to make your business grow, reach new goals, expand, and increase revenue. Well-designed omnichannel fulfillment will give your clients the best option possible to receive the product they need and will give you perfect management, avoiding mistakes, delays, and other problems.

Brand positivity

Multiple distribution channels, presence in various marketplaces, a classic-type stores build an image of a reliable company, that puts the customer first. Two companies may be selling the same product, but if one is more visible having different channels, has shorter delivery times, and many delivery options – it’s a big advantage for clients making their choice.

New customers

Offering new channels or new conditions of order fulfillment may open you the door to new customers, that couldn’t buy from you, or were choosing the service of your competition.

Summing up

Probably, omnichannel fulfillment is a halfway stop for future solutions, and we don’t know exactly what will be next, to provide even better service to customers and ensure business growth. But with no doubt it’s a great opportunity right now, followed by the biggest, most innovative companies. It also teaches flexibility for the future, so start your journey now and avoid empty or too full shelves, unsatisfied shoppers, and other problems in the future.

Content Marketing Specialist at Linker Cloud. A digital marketing expert with a demonstrated history of working in the IT industry.

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