Your products are well merchandised, high quality and ready to meet shopper demand, but in the age of instant gratification, a good or bad approach to order fulfillment can make or break your company-level goals around shopper retention, satisfaction and ultimately loyalty.
We all know the cost to acquire a customer continues to jump – 222% over the last 8 years – and as a result, shopper retention and loyalty are a top priority for most retail leaders. Given that many shoppers hinge their brand loyalty on delivery options and experience, these priorities can't be achieved without a top-notch end-to-end purchasing experience, including fulfilling orders with flexibility, efficiency and clear communication to meet today’s shoppers’ increasingly high expectations.
A strong omnichannel fulfillment strategy is the key to delighting shoppers throughout their post-purchase journey, so they want to shop with you again and again. Let’s explore what omnichannel fulfillment means and how you can apply it to your logistics workflows.
What Is Omnichannel Fulfillment?
Omnichannel fulfillment is a strategy where purchases from any shopping channel (think mobile, web, store or marketplace) can be picked, packed and shipped from any fulfillment channel such as store, dark store or warehouse, all to improve the shopper experience and get them their purchase in the most efficient and convenient way possible. Unlike traditional order fulfillment, where each shopping channel has its own siloed approach to fulfillment, omnichannel fulfillment combines a unified & real-time understanding of product supply with the location of the customer to unlock more fulfillment options like buy online pick up in store (BOPIS), ship from store (SFS), dark stores, and many more.
For example, say a customer in Albuquerque, New Mexico buys a trendy handbag on your website. Traditional eCommerce fulfillment or warehouse fulfillment would mean that the order is shipped from the warehouse in Akron, Ohio and the shopper would receive their package within the standard shipping SLA – something like 5-7 business days from now.
With omnichannel fulfillment, all fulfillment channels automatically become options for this order, and this retailer happens to have a brick and mortar store in Phoenix, Arizona. Phoenix is too far for the shopper to BOPIS, but shipping the order from the store will get the item to the shopper days earlier and at a lower cost.
The shopper receives their bag days earlier and at a lower cost, exceeding their expectations 🎉.
How to Transition to Omnichannel Fulfillment?
Omnichannel fulfillment is certainly a buzzword across our industry, and it’s not difficult to be convinced that it’s important, in fact, most multi-channel retailers already have made it a key business priority. At the same time, most enterprise retailers’ logistics workflows are highly complex, rooted in legacy infrastructure and multiple stakeholders, so it can be tricky to find a clear path to getting there.
The key is defining and integrating a modern fulfillment orchestration layer across your fulfillment stack that unifies multiple fulfillment activities like inventory management, pick, pack, & ship, and customer communications across fulfillment channels.
The majority of Order Management Systems (OMS) today either lack intelligent fulfillment or offer fragmented options comprised of various point solutions. A well-designed and integrated fulfillment orchestration layer integrates seamlessly with any existing OMS via APIs to route orders to the best fulfillment channel for maximum efficiency and speed while optimizing your shipping costs and delivering an unparalleled customer experience.
This is best achieved with a combination of APIs, existing systems and user friendly apps and devices (we call these systems of engagement). There’s obviously a lot that goes into a fulfillment orchestration layer, and every retailer has pieces of it set up already, though often siloed by sales channel. To break it down, outlined below are the key work streams that need to be actioned to level-up your fulfillment orchestration layer to a modern, simplified and loyalty-driving approach that drives omnichannel fulfillment.
1. Unify Inventory Management
Launching an omnichannel fulfillment strategy requires a foundational shift to every retailer’s inventory management. Inventory management needs to transition from a world of silos and latency to a single, unified, easy to access system that tracks all of your inventory in real time.
At any given moment, all sales channels need a single source of truth for product availability in warehouses, fulfillment centers, store shelves or in transit. This means your inventory management system needs to connect to all of these channels, plus update in real-time to stay responsive to constant changes.
Finally, all your teams need easy access to this system. For example, the team monitoring supply and production needs to know how many orange hi-top sneakers are stock in every store just as much as the sales associate, advising a customer how to get their hands on an almost sold out pair of cashmere lined gloves. As a bonus, unlocking this single source of truth for inventory management enables staff to focus more of their time in other areas like proactively monitoring for errors and shipping delays vs. spending time understanding stock levels across siloed sales channels.
There are several paths to achieving this state for your inventory management, from ripping and replacing existing inventory management tech with a modern solution to connecting and upgrading existing systems, which is typically the most feasible option for leading enterprise retailers. Avoid building point to point integrations which require custom integration environments and increase the time and cost to integrate, and prioritize modern tools that offer the flexibility, speed and scale of APIs and webhooks.
2. Pick & Pack, Everywhere
Thanks to an upgraded inventory management system, there’s now a unified understanding of inventory levels across the entire business, so the next step is ensuring each fulfillment channel is equipped with the technology and team members it needs to activate the various fulfillment options available with omnichannel fulfillment.
For example, before omnichannel fulfillment, brick and mortar store technology and personnel only needed to be able to pick and pack purchases from the store itself, but in the world of omnichannel fulfillment, they need to be equipped to pick and pack orders from any sales channel across various pickup options, like curbside, BOPIS and ship from store. This may require new team members and new technology.
You may be wondering what to look for on the technology side. Our recommendation is to find a tool that can:
1.) Bring Data In. It’s paramount to be able to ingest information from other systems in the logistic journey, most importantly the order management system (OMS) and inventory management, all to improve overall manifest and fulfillment operations and efficiency. This can be achieved with a platform that has a robust set of APIs or pre-built integrations.
2.) Focus the Team. The tool you use for pick and pack across order fulfillment locations should drive efficiency and performance by helping team members prioritize what to focus on. We call this mirco-tasking. For example, an employee at a Boulder, Colorado store shouldn’t have to think about which order to pick and pack first, the platform should put the highest priority shipment or BOPIS order at the top of their task list. This employee also doesn’t need to see orders that need to be picked and packed at other store locations.
3.) Seamlessly Action More Workflows. Pick and pack isn’t the end of the logistics journey, so the platform of choice should easily integrate into other tools, like shipping providers, for seamless dispatch.
3. Integrate and Promote New Fulfillment Options
Now that you have a unified understanding of your inventory, and all fulfillment locations are set up to process any order fulfillment option under the sun, you’re ready to incorporate new and enhanced fulfillment options into your shopper journey across all sales channels. Each sales channel should reference your upgraded single source of truth for inventory management, plus each individual shopper’s shipping address in order to prioritize and promote the best delivery options.
Before we cover how to accomplish this, we want to highlight some less obvious but high impact approaches to incorporate delivery options into your shopper journey. We’ve learned that setting and meeting delivery expectations is of higher value to shoppers than super fast shipping, so there’s no need to wait until checkout to promote product availability and exciting new fulfillment options. This applies to your product detail pages, for example, “get it tomorrow,” for a SKU that’s available at a store near the shopper. It can also be incorporated into brick and mortar store shelves – consider adding a QR code. Lastly, consider launching a promotional marketing campaign via email, SMS, direct mail, in-store promotions or ecommerce site banners to promote your new order fulfillment options.
There are several ways to integrate new fulfillment options into each sales channel, but the most seamless approach is to integrate a modern shipping software into each point of sale. Look for one capable of connecting with your order management system and dynamically displaying 3-4 options for maximizing profit and meeting the needs of each shopper. For example, shoppers who are part of your loyalty program may get free shipping or the SKU was just returned at the shopper’s local store, so it’s instantly made available for in-store pickup or same-day delivery via Door Dash.
4. Increase Customer Communication
We’ve talked a lot about driving shopper loyalty as shoppers hinge their brand loyalty on the last mile experience, so a huge piece of this is communication.
In the world of eCommerce fulfillment, it’s already a best practice to send a series of branded post-purchase transactional emails or texts from order confirmation all the way to delivery or pickup confirmations, but with an omnichannel fulfillment strategy, BOPIS or Curbside post-purchase communications are added to the mix. These notifications are notorious for being siloed from other core eCommerce post-purchase communications because they’re powered by different systems that typically aren’t connected by default.
When scheming your omnichannel fulfillment-worthy communications strategy, look to be able to do two things:
1.) Maintain consistent and complete communications across all delivery channels. Whether the order is being picked up from a store, shipped from a warehouse or shipped from a store, branding and messaging of the communications should be consistent.
2.) Additionally, the shoppers now expect communications to dynamically update them regarding changes to the delivery plan originally agreed on. Surprisingly, communicating delays can actually create stronger customer loyalty in the long run, rather than leaving a customer in the dark about their expected delivery.
Accomplishing this is possible with a platform that has a universal understanding of activity at each fulfillment location and can take action on it. For example, the system should be set up to notify the user when an item is picked up from the warehouse, whether by a shipper or the shopper. A single shipping provider, email service provider (ESP) or a modern logistics platform that owns omnichannel fulfillment for your brand are options for making it happen.
Bringing It All Together
Above, the transition to omnichannel fulfillment is broken down into bite-sized workstreams, and knocking each of these out will be instrumental on the path to driving loyal, repeat shoppers and building your fulfillment orchestration layer. That said, we’d be remiss if we didn’t highlight a theme that carries throughout each of the workstreams: connectivity and efficiency.
To achieve connectivity and efficiency in your omnichannel fulfillment strategy, dozens of systems, individuals and teams must work from the same source truth and have varying levels of access to tools they need to get their job done. Prioritize solutions that offer and connect Systems of Record and modern Systems of Engagement. Systems of Record are foundational layers in a logistics stack, like inventory and contact management. Systems of Engagement are modern smartphone or tablet apps that enable team members to easily execute multiple logistics workflows, like scanning, taking pictures, packing and shipping, all from the same device. User friendly and multipurpose apps and devices like this are often missing layers in todays logistics stack, instead, pen and paper or legacy devices like bar code scanners are used.
The Advantages of PackageX
PackageX is the all-in-one modern Logistics Platform that digitizes, connects and simplifies inventory, fulfillment, shipping, delivery and receiving operations on a unified platform.
PackageX enables Omnichannel Fulfillment & the fulfillment orchestration layer through a suite of easy-to-use logistics mobile/web apps and developer-friendly APIs on a unified platform that can be used alone or integrated into existing applications.
PackageX Inventory keeps track of your products in real time across all points of sale. This single source of truth for real-time product availability can be accessed by any system, team member or device, at any time. And even accessible through any mobile device, which means you save on equipment costs and move away from pen and paper processes.
PackageX Fulfillment is a mobile application that enables team members to seamlessly pick, pack and ship orders across all fulfillment locations from warehouse to brick and mortar stores. Unlike other fulfillment tools which are less intuitive for on the ground team members, siloed by order fulfillment location and lack the ability to integrate with other tools, PackageX Fulfillment was built on top of the PackageX modern logistics platform to prioritize tasks, easily integrate with other systems and enable a unified approach to post-purchase communications.
The PackageX Shipping app and API generate package shipping labels dynamically based on product availability, package type, shipping speed, and shipping rates from a network of 100+ national carriers and local delivery services.
100+ B2B logistics and operations leaders use PackageX apps, APIs and webhooks in 44 countries and 214 cities to ship smarter, connect workflows, and gain visibility. Some notable names include TALG, Klim, San Diego Hat, On Running & Fabric.
Schedule a demo today to discover how PackageX can empower your eCommerce business with omnichannel fulfillment.
