Why Omnichannel Fulfillment Matters

Jul 18, 2013 2:30 PM  By

fulfillment-shipping-300Shopping habits, shopping devices, and shopping locations are interchangeable in the customer’s eyes, which is why it’s more important than ever for merchants to offer a wide variety of omnichannel fulfillment options, according to Bill Toney, senior vice president, Omnichannel Solutions at VendorNet.

Toney, who discussed omnichannel fulfillment during the 2013 Operations Summit, said in his presentation that 84% of consumers prefer a combination of in-store and online purchases, 63% prefer to buy online but with the option to return in store, and 43% prefer to buy online and pickup in store.

“The shopping channel continually changes. Consumers can go from shopping online, to using a mobile device to showroom for research. And it’s because of that that the ability to connect your entire supply to the customer is critical,” Toney said.

That is where omnichannel fulfillment comes in. While there are a variety of order fulfillment options out there, for retailers who are new to the game, the main focus should be ship-from-store, associate ordering systems in-store, and in-store pick up, Toney said.

The benefit of the ship-from-store option, according to Toney, is that since it is similar to opening a mini distribution center on a localized level, it opens up your inventory and decreases out-of-stock items online and in-store.

Retailers like Nordstrom and Toys ‘R’ Us have been offering ship-from-store to customers but one in particular who appears to be mastering the art of ship-from-store is Macys, which recently announced plans to see a total of 500 stores double as fulfillment centers by the end of 2013. According to Macys, these distribution centers drive incremental sales, increase inventory turn and improve gross margin.

The associate ordering systems, also known as AOS, can include devices such as kiosks or tablets inside a brick-and-mortar store. According to Toney, these types of devices can let an in-store customer search and order products offered online that might not be available in a physical store. This move, he said, will not only keep the customer in-store, but will also secure a sale and reduce the risk of the shopper going to your competitor.

In-store pick up, Toney said, could be a tricky art to master, because if your in-store inventory is not accurate, it could be detrimental to customer satisfaction. But much like the AOS fulfillment option, in-store pick up does get your customer inside the store and increases your chances of an upsell and impulse purchases.

Retailers who get into omnichannel fulfillment, Toney said, can expect to see a boost in conversion rates anywhere between 2% and 20%. But by offering various fulfillment options to your customer it will most definitely boost your customer satisfaction rates and could help increase long term customer value.