Omnichannel fulfillment: Definition, benefits, strategies
Retailers: prepare for the unexpected. See how omnichannel order fulfillment can help you adapt quickly to sudden market changes.
These days, what makes or breaks a good online shopping experience is order fulfillment. Deliveries that take more than four days, provide no updates or communication from the vendor, and no tracking options frustrate shoppers. The inability to choose delivery options like buy online pick up in store is another common frustration.
So, if you’re retailer, it’s highly likely that you’re grappling with the complexities of omnichannel fulfillment, rising logistics costs, and the need for accurate, unified reporting. But you may not want or be able to tackle these complex facets of fulfillment all at once.
Here’s where composable order management solutions come into play. These powerful tools provide retailers with flexibility and offer benefits in four key areas:
- Sourcing and allocation
- Omnichannel delivery models and analytics
- Intelligent returns
- Consolidated sales data and reporting
With composable order management, retailers can pick and choose capabilities to implement the strategy that’s tailored for their business. Let’s take a closer look.
Sourcing and allocation: All about speed
The amount of time consumers are willing to wait for a product delivery is shrinking – from 2.36 days in 2022 to 2.25 days last year. Clearly, speed is the name of the game.
In fact, 25% of customers are even willing to pay a premium for same-day delivery, according to a McKinsey & Company report.
Composable order management solutions can help meet these demands through intelligent sourcing and allocation algorithms, shortening delivery times to keep customers happy.
Composable order management + omnichannel delivery
In 2022, American shoppers spent a whopping $95 billion in BOPIS purchases. With more than 80% of retailers believing that physical stores will remain highly relevant in commerce, it’s clear that omnichannel fulfillment models are here to stay.
But omnichannel delivery comes with backend complexity. Composable order management solutions simplify this complexity, seamlessly orchestrating fragmented parties in the supply chain and various fulfillment locations, including a retailer’s physical store network.
The result? Retailers can achieve two- or even one-day deliveries and customers can select the delivery option that’s most convenient for them.
Intelligent returns: The secret to lower logistics costs
Since 2010, logistics costs have risen by around five percentage points, driven largely by the increasing complexity of e-commerce logistics. Currently, these costs represent 12% to 20% of e-commerce revenues, and this figure is set to rise, according to McKinsey & Company analysis.
A composable order management solution can help reduce these costs by:
- Intelligently managing returns
- Leveraging AI to help warehouse associates make better and faster decisions
- Track and maximizing key performance indicators, such as sell-through rates
- Automatically identifying emerging trends in customer returns
Making sense of the data deluge
As retailers expand their fulfillment networks to include more complex distribution nodes, the need for consolidated sales data and accurate, unified reporting becomes essential. Many retailers see their current systems as a technical liability here. But with a composable order management solution, you can turn this liability into an asset.
Bespoke analytics and tools help you make sense of your data, allowing you to test and adapt sophisticated omnichannel inventory strategies, sharing events to any other interested system.
An order management solution also serves as the “middle layer” between a backend ERP operations and a commerce frontend.
This helps retailers focus on seamless omnichannel orchestration that drives an effective sales experience, while all the revenue, margin, and cost tracking happens through out-of-the-box integration with the ERP in the backend.
Order out of chaos: Composable order management
In a commerce technology stack, composable order management helps boost customer satisfaction and profitability in today’s retail environment. It provides the flexibility brands need to simplify — step by step — the backend complexity that omnichannel order management creates, and eventually provides the speed and convenience customers expect when ordering or returning products.
By simplifying omnichannel fulfillment, speeding up delivery times, intelligently managing returns, and providing consolidated sales data and accurate reporting, retailers can streamline their operations and set their business up for continued success.
