Omnichannel Fulfillment: How It Happens
You’re here because you might be asking the questions:
- How does it all start?
- How does omnichannel fulfillment come about?
- What does it look like?
- What happens in omnichannel fulfillment when it comes about?
Let’s cut to the chase and get on with it!
How omnichannel fulfillment comes about (the steps):
1. Jane has an idea
2. Jane starts selling online (becomes retailer)
3. Jane opens up chain of outlets alongside online store (becomes multichannel retailer)
4. Jane integrates offline and online stores (becomes omnichannel retailer)
5. Jane, as an omnichannel retailer, adopts omnichannel fulfillment. What happens?
(Later…) What happens when omnichannel fulfillment comes about (real-life scenario):
It all starts with an idea.
Step 1: Jane has an idea
One fine day, sleepy Jane was perched on her windowside sofa, watching the birds chirp while sipping her favourite beverage, coffee. “Mmm…,” she sighed as she wrapped her stiff cold hands around her brewing hot mug. All too swiftly, an idea popped into her head and she muttered to herself, “Hey, why don’t I start selling illustrated boutique coffee mugs?”
Step 2: Jane starts selling online (becomes retailer)
And so it began, Jane opened up her own mug boutique online, called it Jugz and became an online retailer.
Crowds poured in. Soon, Jane found herself fulfilling thousands of orders every month.
Step 3: Jane opens up chain of outlets alongside online store, (becomes multichannel retailer)
With a promising profitable outlook for Jugz, Jane started selling multichannel via both online and offline channels.
She opened up a brick and mortar store in a mall in the heart of the city, continuing to sell online while operating her physical store. Her brick and mortar store saw success so she scaled up and opened a chain of 4 outlets in total. She became a ‘multichannel retailer.’
But poor Jane was not happy. Her brand Jugz started receiving 1-star Google reviews from froth-mouthed disgruntled customers. Why?
- An enthusiastic customer saw a pink mug on Jugz.com she loved that stated “20 items in stock.”
- Excited, she drove to Jugz nearest mall outlet to get her hands on one.
- As soon as she reaches the store, Jane tells her the item is out of stock and that “20 items in stock” only indicated stock levels for Jugz online store.
- Feeling misled and upset, the customer leaves a poor Google review of her experience.
In a nutshell, Jane’s customers get treated to the idea that Jugz offline and online channels function as separate entities. The complexities of multichannel retail and fulfillment can stymie business growth for retailers.
*Note: In multichannel retail, sales channels are not yet integrated.
Step 4: Jane integrates offline and online stores (becomes omnichannel retailer)
Months go by. Jane’s business is not running as smoothly as she envisioned the day she sipped her coffee by the windowside.
To streamline operations, she decides to integrate her offline and online channels and becomes an ‘omnichannel retailer.’ (Notice the word “integrate”)
Her brand starts attracting more 5-star Google reviews. What changed?
(Omnichannel proves to be an improved situation from multichannel:)
- An enthusiastic customer sees a brown cat-illustrated mug on Jugz online that states “3 items in stock.”
- He rushes to the closest Jugz outlet and finds there is stock for him.
- He leaves satisfied with his experience.
- This change is attributed to unified inventory management thanks to omnichannel fulfillment.
Contrasted to before, Jane’s customers get treated to the idea that Jugz offline and online channels are one and the same.
*Note: In omnichannel retail, offline and online sales channels are integrated.
Recap of steps 1-4:
Step 5: Jane, as an omnichannel retailer, adopts omnichannel fulfillment. What happens?
Omnichannel fulfillment simplifies operations for Jane.
In this case, it was omnichannel fulfillment that enabled omnichannel retail for Jane’s coffee boutique.
A little sidetrack: What exactly is omnichannel fulfillment?
*Note: Omnichannel fulfillment simply means the process from which Jane’s customers place an order (offline or online) to the time it gets delivered to their doorstep, all using integration softwares that sync orders and real-time updates into a single viewing portal.
Omnichannel Fulfillment: What Happens When It Happens
Omnichannel fulfillment is a combination of solutions and technologies that streamline fulfillment processes into one management tool.
With omnichannel fulfillment, Jane witnesses a 360° upgrade for Jugz in:
Centralised inventory management
= Unified inventory for all Jugz channels.
When customers place an order via on-site or in-store, Jane views updates in the centralised inventory system. With that level of entry to the system, Jane has the power to access inventory across her storage units and decide which unit to mobilise stock from in order to expedite shipping lead time and please customers. Additionally, Jane maintains only one inventory for her offline and online stores conjointly.
The omnichannel inventory management system provides practical inventory insights for Jane. She can engage stock demand, inventory turnover, and demand forecast to:
- Discover Jugz’s high-turnover SKUs
- Measure stock levels needed for said SKUs
- Allocate inventory across her outlets, warehouses, and distribution centres
Furthermore, omnichannel fulfillment helps resolve out-of-stock situations. If an item is out of stock at Jane’s retail outlets, customers can order online and have that item shipped to their homes. Vice versa, if an item is out of stock online, Jane fulfills the customer’s order from her brick and mortar store.
The bonus of having a centralised inventory management? The knowledge is useful for Jane to test new product ideas, engage customers’ preferences, and implement new strategies.
= Direct integration with eCommerce marketplaces.
Furthermore, omnichannel fulfillment integrates eCommerce marketplaces like Lazada, Shopify, Shopee, WooCommerce, Magento, brand.com, as well as brick and mortar stores to streamline operations such as order processing into a unified platform as we mentioned earlier.
Although Jane’s current online channel is Jugz.com, she can leverage omnichannel marketplace integration as soon as she expands her online market.
= Efficient order processes for all channels.
When Jugz receives an order, that order’s life cycle, from the moment it is placed to the time it is completed, is directly updated into the management software so Jane can review, refer, and make changes anytime. This boosts Jugz’s order accuracy and order efficiency to prevent investment losses.
= Real-time updates, insights, and reports.
Another integral part of omnichannel fulfillment is its data integration.
For example, Jane can interact with Customer #2638’s cross-reference data anytime to discover his site interactions, in-store purchases, product preferences, buying pattern, and even his predictive behaviour. Such insights enable Jane to interpret and interconnect various key data points to indicate, establish, and execute better long-term business decisions and developments.
Holistic customer experience
= Consistent brand experience across all channels.
Subsequently, customers gain a holistic brand experience from Jugz. Omnichannel operations capture their engagement with the brand as a whole and not as distinct channels. Rather than being perceived as multiple brands, (like macchiato on-site and cappuccino in-store) Jugz is viewed as a single brand and reinforces a stronger brand image. Whether a customer chooses to browse at a Jugz physical outlet or on Jugz.com, he experiences the same brand feel.
= Full visibility of transportation to mobilise transportation assets.
Lastly, the omnichannel transportation management system allows customers’ diverse shipping preferences to take place.
Jane partners with multiple shipping couriers to meet the distinct demands of her customers.
Some of Jugz customers might want to:
- Order online and pick up at store
- Order online and pick up at a convenient location
- Order at the store and get it delivered to their home
This is made possible with omnichannel fulfillment.
Furthermore, it equips Jane with the ability to mobilise shipping from various locations.
For instance, orders can be shipped from any of these locations to the customer:
- Brick and mortar store
- 3PL or fulfillment centre
In some cases, fulfillment partners like SnT Global provide collection points for customers to pick up their items.
In summary, omnichannel fulfillment encourages Jane’s to scale her business because omnichannel fulfillment software and technologies support and bolster the growth of a brand.
SnT Global Logistics is a world-class omnichannel fulfillment provider of 17+ years experience with a pioneer status from MIDA. It has a total of 8 warehouses across Malaysia and Singapore and works closely with partners to enhance its market presence across ASEAN.
To date, SnT Global Logistics has partnered with both B2B and B2C omnichannel retailers from industries including information and communication technology (ICT), fast moving consumer goods (FMCG), retail, eCommerce, consumer electronics, fashion, cosmetics and skincare.
Get in touch via WhatsApp at +012 302 8381 or submit your request here.