The Opportunity and Challenges of Omnichannel

The omnichannel experience

Consumers can purchase seamlessly and consistently across several platforms thanks to an omni-channel retail strategy that spans multiple channels and devices. It is imperative that your supply chain facilitates a pleasant customer experience regardless of where and how customers contact with your brand to make this plan a reality.

An omnichannel strategy guarantees that the proper inventory is located near each type of customer, for each channel so that customers have a smooth purchase or delivery experience, without sacrificing profit by overpaying on warehousing and distribution costs.

Omnichannel distribution definition

Omnichannel is a multichannel approach to sales that aims to provide customers with a seamless purchasing experience, whether they’re shopping online from a desktop or mobile device, by telephone, or in a brick-and-mortar store. Stock levels, transportation logistics, and demand forecasting must be in sync across all sales channels in order to avoid a distribution network plagued by late delivery, empty shelves, and unsold.

As part of an omnichannel strategy, distribution, promotion and communication channels are integrated from the back end.

Opportunity for omnichannel companies

“As a tech company, we see more retailers becoming omni-channel brands and using e-commerce as their major conduit to the market.”

Bernard Hor, CEO of Hatio

While supply chains are tough and impossible to comprehend in and of themselves, omnichannel commerce necessitate an even more complex supply chain. Each channel’s demand will differ; therefore, you’ll need to adjust your supply chain. Factors such as age and location affect how and where people purchase. For example, a product that is popular with millennials may do well on your online branded store, but you may see a significant uptick in sales once you begin selling it on Instagram. If you open up multiple channels at once with anticipating demand, you’ll risk running into stockouts.

Your omnichannel network may necessitate some additional planning, but you’ll enjoy some huge benefits in the long run.

In order to reap the rewards of an omnichannel approach, however, you must be prepared to face the difficulties it presents.

Challenges of omnichannel distribution

Lack of inventory visibility: Inventory scattered across various delivery facilities and retail locations is difficult to follow when products are flying off the shelves (as they frequently do during the holidays). Next-day delivery requires a well-oiled order fulfilment system and clear visibility into inventory. Product efficiency and cost effectiveness can only be measured using the correct metrics as it moves through the distribution network

Manual inventory management processes: Processes relying on paper for manual inventory management are more prone to human error than computerised systems. Automated inventory management solutions such as RFID tagging, barcode scanning, and other modern systems are necessary instead of relying on the possibility of human error.

Disconnected supply chain: It’s like a genuine chain; if every link is disconnected, it’s not strong. Communication breaks down and weakens the supply chain when different warehouses and distribution hubs utilise different systems.

Wrong third-party logistics provider: When it comes to inventory optimization and omnichannel delivery, working with the wrong third-party logistics supplier might be disastrous. The best 3PLs know which metrics to use and how to measure them in order to continuously improve their service. It can also be a crucial component of a successful and well-functioning distribution network.

Omnichannel distribution checklist

The major objective is to simplify your supply chain and create a uniform experience for both your customers and your team. Here are the things to consider for:

  • Effective, full-service 3PLs
  • Optimised inventory positioning
  • An Inventory Management System
  • An Omni-channel Order Management System
  • Optimised freight and parcel routes

In addition, these goods will help you save money and provide you the flexibility to enter new markets and begin selling via new channels quickly. The benefits are numerous, including increased supply chain visibility with streamlined inventory, more fulfilment choices to reach more customers, a seamless shopping experience with better customer service, fewer returns, and more possibilities to engage customers and drive sales.