Omnichannel: how to keep your logistical promise?
Published on 30 March 2018
Omnichannel retailing has without a doubt shaken things up when it comes to consumer demands. Customers today seek choices, extremely short delivery times and an excellent level of service. Within the context of cost reduction, how can we keep our promises to our customers and ensure their satisfaction? Let’s take a look at the challenges retailers face and the logistics solutions that can be put in place.
Omnichannel: ever-increasing consumer demands
Since the rise of the internet, consumers have undeniably become more demanding when it comes to their consumption habits. Their demands represent challenges for retailers who must adapt their logistics services in order to satisfy customer expectations.
Ensuring a large selection of products and services
Accustomed to having access to a variety of competing products, consumers today like to have the choice among various products. They also want personalized services that meet their needs.
The logistics challenge for retailers lies in obtaining product visibility and managing products in conjunction with suppliers. This is just as big a challenge for brick and mortar stores as it is for online shops and marketplaces that use drop shipping. We must be able to respond to customer demands with flexibility, an extensive product catalog and a wide supplier base all while limiting our overall inventory.
Rather than multiplying our points of storage which will drive up supply costs, we need to organize the merchandise flows between suppliers and end customers with the help of information systems. By using IS, retailers will be able to ensure products are available with the supplier or the distributor and deliver their promise on time with limited inventory.
Easily compare product prices and delivery times
With the internet, consumers have also grown accustomed to comparing products in store and online or even with other e-commerce sites. To meet these expectations, retailers today need to offer a large selection of products. If customers wish to receive their products quickly, they must be able to choose an express delivery option by paying more than for a traditional delivery method.
This is called on-demand marketing: to set ourselves apart from competitors, we now have to be able to offer a range of solutions that match the different needs of consumers in terms of products and delivery services. According to this strategy, retailers must be able to offer their products with transparency as early on as possible in the purchasing process.
Reap the benefits of an easy, quick and personalized buying experience
Today, consumers seek an optimal purchasing experience. They want to rest assured that they can easily return an item they don’t like at any step of the buying process.
Because of this demand, customer information takes on a particular importance for companies offering omnichannel sales services. Retailers must be able to track all product supply operations in order to inform customers in real time of available inventory, delivery times and places for their orders and possible return methods.
Retailers faced with challenges in logistics
Coupled with these consumer demands are just as many challenges for retailers when it comes to logistics: optimally managing inventory, offering customers a unique selection of products and controlling information flows.
Manage inventory on the entire distribution network
Spearheaded by leaders in e-commerce, a trend is gaining speed in which companies are developing various services in order to attract an increasing number of consumers. As such, customers who are used to these advantages have even stronger demands and want quicker deliveries at lower costs. Within this highly competitive context, retailers have no other choice but to optimize inventory management in their network in order to quickly delivery products and reduce supply costs.
On the same topic: Two must-follow indicators for a better manager inventory
Stand out among customers with customized services
In order to stand out from competitors, retailers also need to implement a very flexible system that allows them to offer innovative services for product supply and returns. That is exactly the added value service Zalando is offering its customers with its try-at-home service: “Try before you buy”. The company has given customers the option of paying for or returning orders within 3 weeks so they can make sure the products fit them before even being debited for their purchase.
Deliver your promise with the right information
A key element for retailers is to have control over their information flows so they can manage incidents and inform their customers in real time. This requires dispatching product inventory and tracking merchandise during the delivery process. In this way we can successfully keep our promises to our customers while ensuring reduced operational costs.
Logistics: Deliver your promises to customers with an OMS
In an omnichannel distribution model, it is fundamental to have real-time visibility on all inventory no matter where it is located (stores, warehouses, order preparation centers...). This overall view of available inventory to date must be updated on an ongoing basis and integrate returns and deliveries so that retailers can quickly respond to customer demands and inform them of product availability. If the product is not available immediately, e-commerce sites and shop assistants must be able to inform customers of the expected delivery date.
To meet these challenges to an omnichannel approach, the best technical solution by far is the Order Management System (OMS). This solution optimizes inventory dispatched within the distribution network and as such reduces costs by making products accessible on all sales channels. This is the best tool for keeping your commitment to your customers and improving your sales conversion rates.
Further reading: Optimize your omichannel sales processes with an OMS