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Omnichannel fulfillment: How retailers are optimizing for the holidays

The holidays are right around the corner and customer expectations have never been higher. How are retailers using omnichannel fulfillment to prepare for the 2018 holiday season?

Customer data is critical, especially in terms of Q4 planning. Retailers need to know what we buy, when we buy, and notably, where and how we buy. With one of the biggest shopping peaks right around the corner, all signs are pointing to a strong 2018 holiday season for retailers thanks to high consumer confidence and the continued rise of eCommerce.

But the rise of eCommerce is leading many industry watchers to the wrong conclusion. The retail store isn’t dead. Even as the rate of online shopping continues to increase in volume and spread across channels, we aren’t seeing a near-comparable decline of in-store visits. It’s not a zero-sum game. The relationship between online and in-store shopping has become more nuanced. Today, both eCommerce and brick-and-mortar are part of a more complicated, omnichannel purchasing landscape.

To meet the frenzy of holiday shopping, retailers are optimizing operations and omnichannel fulfillment, which means:

  1. Understanding how their customers are shopping and what options to provide, knowing where they are and on what channels they’re shopping
  2. Arming their retail associates—the front line of retail—with the right information to help customers
  3. Proactively managing inventory levels to support new shopping behaviors while also giving customer more delivery (or pick up) options

What does the relationship between online and in store shopping look like? Let’s look back at 2018, including a key prediction we made on this topic…

2018 in review

Last year, we predicted storefronts would make a comeback in 2018 as companies developed more sophisticated omnichannel strategies. From digitally native companies like Bonobos, Warby Parker, and Casper expanding their physical footprint, to retail giants like Walmart, Amazon, and Target launching new, buy-online-pick-up-in-store (BOPIS) options, it’s safe to say the physical store is still a crucial piece of logistics strategies.

With the option to buy everything online, why are we still seeing major investments in physical stores? Because, while a significant portion of sales have moved online, multichannel shopping has also been on the rise. Turns out, people like options.

More channels, more options

Multichannel, or omnichannel, shopping is when a customer utilizes more than one “channel” to complete a purchase. This includes using the store as a showroom to do research, and then purchasing the product online (hopefully from the retailer’s website and not a competitor’s), or browsing options online, but going to the store to make the purchase. In more recent years, omnichannel has also grown to include social channels, such as Instagram and Facebook, where you can buy something without even leaving the app.

In fact, according to a recent Neustar study, more than half (56%) of millennials shop in store at least once a week and 67% of them conduct research online before visiting a retail location.

This is a big deal. In 2019, millennials are expected to surpass baby boomers as the largest U.S. demographic—how they purchase goods is important.

To keep pace with today’s omnichannel shopping behaviors, retailers and brands need to evolve their logistics strategies, and that includes everything from the information sales associates have to the network in place to store inventory and fulfill orders.

On the front lines of omnichannel retail

It’s a good time to work in retail. This year, sales associates can demand more hours and retailers are obliging. However, being in retail during the holiday season is also hard work. It’s a critical role in the customer journey and it’s the busiest time of the year. Each year, the stakes get higher. Today’s consumer is more informed, more dynamic, and more demanding than ever before, making it even harder to win sales.

Whether consumers are shopping online, in-store, or most likely a combination of the two, customers want a consistent, convenient experience. On the front lines, retail associates are tasked with providing a seamless customer experience, even when they don’t have all the dots to connect. If they can’t provide the information or experience their shoppers are expecting, they can lose the sale.

For retail associates to do their job—especially in an omnichannel world—they need access to information. “Do you have this in the next size up?” “Does this come in black?” “Is it at a store nearby?” “Can I have it delivered?” These stops on the customer journey are intrinsically tied to inventory availability and what it takes to get your products to your customers.

Sales representatives must have a clear line of sight into inventory levelsーwhat’s in the store and online, what’s backordered, and when the next inbound shipment is due. Progressive retailers must consider their supply chain as part of their customer journey and arming their teams with the right information to facilitate a great customer experience.

Behind the scenes to make omnichannel fulfillment work

Retailers must be equally prepared behind the scenes to forecast demand and proactively manage inventory. Even with cutting-edge technology and sophisticated consumer data analysis, inventory forecasting can be murky territory.

In fact, typical in-store inventory accuracy is only 60%. Omnichannel fulfillment only further exacerbates an already-complicated process. For example, stores not only need to account for enough inventory to stock shelves and what they predict consumers will buy in store, they must also account for the volume of inventory sold through BOPIS or ship-from-store options. At the end of the day, you can’t land the sale if your product is out of stock. Stock-outs are even more dangerous in an omnichannel world because customers can swiftly find what they are looking for somewhere else, at the click of a button, sometimes before even leaving your store.

Giving customers options with omnichannel fulfillment

Customers that have options are happy. As consumers, we want to shop on the channel that’s most convenient, we want to receive our goods in a way that works with our schedules. Optimizing omnichannel fulfillment and meeting increasing customer expectations isn’t always easy, but the good news is emerging technology makes it possible to have greater visibility into inventory, move goods more easily, and provide real-time information to your sales associates and logistics leads. Ultimately, new logistics solutions allow retailers to provide customers with what they want most: options.

Additionally, distribution networks aren’t as static and siloed as they once were. BOPIS and ship-from-store provide an opportunity to meet heightened consumer delivery expectations and offer flexible delivery options. New on-demand transportation and fulfillment solutions bring true flexibility to a company’s logistics strategy and allow companies to maintain stock levels and meet delivery promises.

The pendulum will continue to swing. eCommerce may never eat brick-and-mortar retail completely. Instead, retailers and brands that prioritize the customer experience and figure out how to meet those expectations—physically and digitally—will not only meet Q4 demand, they’ll win loyal customers.