Twenty years ago, consumers in any industry had only a handful of options when it came to shopping.You could order by mail, over the phone, or simply shop in person. And those options were typically mutually exclusive. No one went to a store just to call in an order. That was unheard of.
Thanks to the miniature computers we all carry around in our pockets and purses, we consumers can now take advantage of a variety of options when it comes to making a purchase. Customer expectations have changed and so are the ways orders are being fulfilled and distributed in all industries.
It’s good news for consumers. But is it bad news for vendors? Not necessarily.
Customers today want a seamless shopping experience regardless of where the shopping is taking place—on a computer or mobile device, by telephone, or in a store. Vendors outfitted with a robust omni-channel distribution approach are well-equipped to deliver customer satisfaction, but they must give salespeople the tools to make the sales process as smooth as possible.
Maida Napolitano is a business consultant who works with companies that specialize in supply chain, logistics, and distribution. She says an omni-channel distribution system—one that relies on an inventory management system spanning the entire supply chain—is critical in today’s marketplace.
[It] gives managers a leg up in achieving real-time visibility—and in some cases might actually save the sale. Rather than having a customer walk away because she can’t find an item, today’s sales associate may be equipped with a handheld mobile device to help her find it in any of the other stores. Some stores have even set up kiosks for customers themselves to check inventory, purchase the items, and have it shipped directly to their homes.
The fulfillment and distribution challenge of an omni-channel approach requires a vendor to have the agility to ship from anywhere, regardless of where the purchase was made. As a result, stores are transforming themselves into small fulfillment centers that can support the shipping expectations of customers who want to receive their product as quickly and cost-effectively as possible, said Kevin Hume, a principal with supply chain consulting firm Tompkins International.
That means brick-and-mortar stores aren’t dying. However, store inventory is being accounted for differently thanks to the omni-channel approach. Large retailers have to decide which stores receive a higher volume of certain items anticipated to be in highest demand through e-commerce sales, Hume explained.
How well companies handle the fulfillment and distribution of their orders—no matter where they come from—has serious ramifications for the success of the business. Supply chain and distribution experts Maha Muzumdar and Anijay Zinzuwadia studied three of the most dynamic industry sectors in the global economy (manufacturing, technology, and retail) and discovered they all struggle with order management and fulfillment.
The increase in demand volatility coupled with an explosion of delivery channels, more complex global supply chains, and ever-rising expectations of customers and end consumers, means perfecting order management and fulfillment is incredibly challenging.
Key to that challenge is customers. Fulfillment and distribution comes down to a promise made to customers.
The true driver of omni-channel customer experience is inventory availability and the ability to fulfill orders on time and through the appropriate channel. Retailers face a two-fold challenge in their quest to achieve omni-channel success. First, they need to do a better job of empowering their customers, who clearly want to dictate the customer experience. And second, a technology gap hinders omni-channel operations. Too many retailers lack adequate resources to meet their customer demands.
A successful business needs loyal customers, and nothing frustrates a customer more than not being able to locate the product he or she needs. The fewer bumps a customer experiences along the way, the more loyal the customer. Companies with solid omni-channel approaches and efficient distribution systems understand this and embrace technology that allows them to deliver on their promises.