Omnichannel Fulfillment in E-Commerce

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In the last few years, the growth of e-commerce businesses has been exponential. The demands of customers from their online retailers have also changed rapidly. Omnichannel retail has come up as the new sensation in the e-commerce business. But it is more than just a buzzword.

Omnichannel Fulfillment

In this age when customers expect the entirety of their online shopping experience to be seamless and comfortable, omnichannel fulfillment is not just an afterthought, but instead a necessity. Especially with the rise of COVID-19, people are becoming more and more dependent on online retailers. 

In this article, we are specifically going to talk about omnichannel fulfillment, why all the brands suddenly seem to be adopting this method, and why it is beneficial for your business.

Omnichannel Fulfillment

What is Omnichannel Fulfillment?

In the traditional order fulfillment process, the online retailer usually only uses a single channel to fulfill the order and deliver the products to its customers. But omnichannel fulfillment is different. It refers to a fulfillment process that happens through multiple channels. The end goal of this process is to deliver the product to the customer. For this, the retailer may use fulfillment partners like 3PL or fulfillment centers. They can also use in-store fulfillment, dropshipping, and more methods.

In this fulfillment process, a lot of data about the products have to be constantly updated. This method is also beneficial for customers, as they usually have to wait for 2 to 5 business days to receive an order. But in omnichannel fulfillment, the retailer can identify the location of the customer and ship the product from a nearby store that has the necessary inventory. It makes the process of shipping and delivery much faster.

Omnichannel Fulfillment

What Does Omnichannel Fulfillment Look Like?

As we already explained, the difference between traditional and omnichannel fulfillment methods is that omnichannel gives both the retailer and the customer a lot more options. The traditional fulfillment process is one-way.

Suppose you are using a 3PL partner or a fulfillment center. In that case, the process usually consists of sending your inventory to the warehouse. The warehouse collects and packs the items when they are ordered. The items are sent to a local store location, and then finally delivered to the customers.

But in an omnichannel fulfillment process, the warehouse-to-store-to-customer is only one channel. The products can be shipped directly to the customer from the warehouse, and directly from the manufacturer to the customer as well. Other options include local stores delivering directly to customers, or customers picking up their own orders from local stores.

The return process is also much easier, as the customer can send the product back to the warehouse or the store. 

Omnichannel Fulfillment

Omnichannel Fulfillment: Meeting Customer Expectations

Omnichannel fulfillment has been on the rise for the last few years. It is one of the smoothest and fastest ways to deliver products to customers. The new age of online shoppers expect their products to reach them fast. Some even pay extra delivery charges for next-day shipping. But if the warehouse where inventory is kept is far away from the delivery location, this might not be possible.

But, through omnichannel fulfillment, companies can ensure faster delivery times that match the customers’ expectations through their many different channels. They can ship from a local store or local center. Customers can even order online and pick up the item in-store. It is truly a method that combines the online and the offline in a seamless process that makes the customers happy.

E-commerce online shopper purchasing from an online store | Locad

The Importance of Omnichannel During COVID-19

As we all know, the number of consumers who shop online increased drastically amid the COVID-19 pandemic. People worldwide were under lockdown and were forced to find new means of shopping, as they could not go to physical stores. This came with a drastic shift in online retail, as they now had to tend to more customers.

Even though omnichannel fulfillment was not an alien concept before the pandemic, it became even more popular after the lockdowns. People needed their orders delivered to their houses fast, and one of the best ways to make that happen is through omnichannel retailing. Standard fulfillment and shipping take 2-5 business days – but through omnichannel fulfillment, the sellers could cut down this fulfillment time by a lot. This meant being able to deliver groceries, medicine, and other essential items to the customers within a day or two of placing the order. Customers were also able to buy the products online and then pick them up from the stores, or curbside as per their wishes.

As we can see, even though the strict lockdowns have subsided, people are still shopping online. That is why e-commerce business owners are still using omnichannel fulfillment to satisfy the needs of their customers, and also to stay relevant and profit in this rapidly-changing world.

Omnichannel Fulfillment

Breaking Down Silos Between Channels

There has always been an invisible wall between physical and online businesses. Some people prefer online shopping, while others prefer going to stores to buy their things. But omnichannel fulfillment is a great way to break down these silos between different channels and help businesses work as a single entity over all platforms.

Many large companies have always been selling their products both online and offline. But omnichannel fulfillment is much more than that. It is blurring the boundaries between online and in-store. It enables people to order something online and then go to a physical store to pick it up. If it’s an item highly in demand, they can still order it online and avoid the rush of a physical store. It also enables companies to deliver necessary items to the customers faster and more efficiently.

Omnichannel fulfillment is not just about selling to both the online and offline customer base. But it is about merging these two together to create a more extensive and happier customer base.

Shipping from the Warehouse

There are many options for shipment when it comes to omnichannel fulfillment. One of these ways is the traditional shipping method that many e-commerce businesses already use – shipping from a warehouse. A lot of companies store their inventory in a warehouse space. Then when a customer makes an order with their online store, the warehouse fulfillment service packs and ships the product to a local facility close to the customer’s location. Then the facility allocates a delivery executive, who delivers the item to the customer. This is the traditional shipping method used in omnichannel fulfillment as well.

Shipping from the Manufacturer

Shipping to the customer directly from the manufacturer is also known as dropshipping. In this method of shipment, instead of keeping an inventory and renting storage facilities, the business can opt for the item to be shipped to the customer directly from the manufacturer.

Even though this method has some cons, it saves a lot of inventory costs, especially if the items are really large or heavy. Although not very commonly used, this method of shipment is present in omnichannel fulfillment processes. Some companies ship their products to customers directly from the manufacturers to cut back on inventory costs.

Shipping from 3PL or Fulfillment Center

This is one of the most popular fulfillment methods when it comes to small e-commerce businesses. Many of these businesses hire a third-party logistics (3PL) fulfillment company to take over the logistics and fulfillment part of their business. These companies keep inventory, pick, pack, and ship items to designated locations. They also handle the delivery part of the process.

3PL is also beneficial in omnichannel fulfillment. Especially if you are a new or small company, you might not have the required workforce, connections, or technology for omnichannel fulfillment. But through a 3PL partner, you will be able to oversee and manage all these channels and your inventory. You can also find the channels that may need improvements.

Ship from the Store

One of the perks of omnichannel fulfillment is in-store pickup. But that is different from shipping from the store. Omnichannel fulfillment enables you to ship to the customer through a store that is located near the place where the product is to be delivered. This saves a lot of time, as the local store will deliver much faster. This is also why omnichannel fulfillment became such a popular method of retailing.

Omnichannel Fulfillment

Challenges with Omnichannel Fulfillment

Even though omnichannel fulfillment is a great way to broaden the scope of your business ventures, it is not only made up of benefits. New businesses have to face some challenges and risks when they are moving into an omnichannel fulfillment system.

1. Since there are so many channels through which a business can ship their orders to their customers in an omnichannel fulfillment processes, they can sometimes lose track of their inventory. This can be pretty harmful to the business if they promise fast delivery and cannot follow through. That is why it is better to hire an expert 3PL company that will be able to keep track of all of your channels and inventory.

2. Sometimes, companies that use omnichannel fulfillment promise to do next-day delivery but cannot keep it. This can hurt the company’s image, and even stop customers from doing business with them. Companies need to have the right technologies that can provide the customer with a detailed view of the whereabouts of their products, and let them know if there is going to be a delay in the delivery time.

3. One of the main problems of omnichannel fulfillment is the return process. If the customer is not happy with the product or it is damaged and wants to return it, they want the process to be as seamless as the delivery. But that is not always possible. There are many delays in the return process due to various reasons. Companies need to make the return process as smooth for the customer as possible. This way, they can ensure a good brand image with the help of their customer service, even if the customer wants a replacement of the product. 

Omnichannel Fulfillment

Benefits of Omnichannel Fulfillment

Omnichannel fulfillment presents online retailers with a unique opportunity to reach customers through many different channels, enabling them to cover a broader customer base.

When it comes to omnichannel fulfillment, there are many benefits for retailers, such as the following:

Customer Satisfaction

One of the main qualities of modern customers is that they prefer faster deliveries over other factors. Omnichannel fulfillment enables sellers to reach customers in very little time. Another perk is that customers can also opt for in-store pickup if the store is close to where they live. In the digital age, where everything is getting faster, being able to deliver products to your customers in a short time will make them happy. It would give birth to a more loyal customer base, who will come back to your store repeatedly.

Accurate Reports

If you use a 3PL fulfillment company for your business and for omnichannel fulfillment, they will keep an eye on all of your channels and inventory. They have modern technology to keep track of everything. This will provide you with accurate reports and accounts of all of your channels, and also help you find the ones that could use improvements.

Improvement in Your Brand Image

All the businesses that have strong brand images have one thing in common: their customers’ trust. Customer loyalty builds up when they see they can access your products in multiple ways, be it through online browsing or in-store pickup. This availability helps you build your brand as a trustworthy one. Omnichannel fulfillment is the only way to build this level of brand image and satisfy your customers by giving them multiple options to access your products.

Increased Efficiency

Omnichannel fulfillment is excellent for business, as it connects all the channels in a single process. This helps increase the efficiency of shipment and delivery and builds up the accuracy in delivering the items to customers. It makes for a seamless system that enables your customers to receive products faster, while making it easier for you to deliver to them.

Omnichannel Fulfillment

Omnichannel Fulfillment: Strategies

Integrating an omnichannel fulfillment method into your online business can prove to be a complicated process. That is why you will need a proper strategy moving forward. If you want to reach a broader customer base through multiple channels and platforms, many 3PL fulfillment companies can help you with it. You will need connections and software to manage and keep track of your inventory. Otherwise, your products might get lost.

A trusted 3PL partner will not only act as your inventory and storage space, but they will also deliver products and keep track of all other channels in your sales chain.

Conclusion

Omnichannel fulfillment is not a new method, but it’s undoubtedly taking the world of e-commerce by storm. If you are a new business that wants to expand its customer base, maybe it is time to think about omnichannel fulfillment. The transition can be difficult, but if executed well, this can expand the horizons of your business like never before. You can also consider a 3PL partner for omnichannel fulfillment, so you will not have to put all your workforce and efforts into the logistics of your selling.

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FAQs

Omnichannel fulfillment in e-commerce refers to a fulfillment process that combines a lot of channels and uses the most convenient one to ensure the fastest delivery to the customer. This could happen through a warehouse-to-customer shipment, a store-to-customer shipment, or a manufacturer-to-customer shipment. The possibilities are plenty in omnichannel fulfillment.

In retail, fulfillment simply means the process through which an item is picked, packed, shipped, and delivered to a customer after the business receives an order.

Omnichannel delivery or distribution is a strategy through which business owners combine multiple channels together to perform a seamless shipment and delivery to their customers.

Some of the possible challenges of omnichannel fulfillment are difficult return processes, being unable to keep track of inventory, or not being able to deliver on time. All these problems can be avoided if the proper precautions are taken.

Omnichannel fulfillment is quickly becoming the most popular form of fulfillment for e-commerce companies. Especially during the COVID-19 pandemic when in-person contact was limited, fast deliveries helped a lot of people. For a company to survive in the competitive market of today, they need to adopt this fulfillment method.

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