Merchandise Fulfillment: Adapting to Serve Multiple Sales Channels

July 19, 2016 by Amware Fulfillment

Whether you’re running a business-to-consumer (B2C) merchandise fulfillment operation that’s delivering goods to consumers or a business-to-business (B2B) operation that ships pallets of goods to other companies, a solid multi-channel fulfillment approach can set you apart from your competitors, improve your own margins, and keep your customers happy.

multi_516.pngTo succeed in the omni-channel environment, companies must meet and exceed customer expectations by supporting them regardless of the channel, according to Retail TouchPoints’ Revising The Supply Chain For An Omnichannel Era. “But successfully aligning inventory management, order delivery and fulfillment with customer demands requires agility and flexibility across the entire supply chain.”

For example, outdoor retailer Cabela’s has successfully optimized its supply chain operations to more effectively compete in an omni-channel world. The retailer currently has a complex business consisting of 20 destination stores and three distribution centers that house more than 300,000 SKUs from 5,000-plus vendors.

In order to optimize people, systems, and capital to meet the needs of its customers, Cabela’s uses a warehouse management, replenishment, and assortment planning platform that allows it to better manage stock in DCs and stores to meet customer expectations.

Fulfillment Infrastructure Often Not Optimized for Multi-Channel

But not all retailers are moving as quickly to respond to the omni-channel challenge. About 55% of retailers continue to have dedicated fulfillment facilities for each sales channel, and only 25% of these retailers are launching initiatives to combine these facilities in order to serve both channels more cost-effectively and optimize their working capital investments (HRC Advisory’s 2015 Supply Chain Transportation Study).

So, while market demand has gone fully multi-channel, back-end fulfillment operations have not – and that leads to overspending in space, inventory, labor and transportation.  We write about it in our eBook “Mastering Multi-Channel Fulfillment.”

Best Practices for Merchandise Fulfillment

“Regardless of the consumer promise, a successful multichannel strategy requires best-in-class merchandise fulfillment enablers for competitive differentiation,” writes Michael Hu in Best practices in strategic multichannel fulfillment. He outlines three core fulfillment-related processes that leading firms are using:

  • Define customer strategy and fulfillment solution simultaneously (and iteratively). Focus on creating a two-way, iterative process in which the customer promise informs the fulfillment solution (and vice versa).
  • Harness flexible, “no-regrets” fulfillment-solution activation. Incorporate built-in flexibility that allows for the evolution of key dimensions (e.g., target customers, products, speed, etc.).
  • Use metrics and incentives aligned with multichannel fulfillment. While new in-store roles can help deliver better fulfillment across channels, they can also take away from the in-store service experience. As a result, incentives need to reflect these shifts and encourage the right behaviors.

(Read the complete report and all recommendations here.)

Is Your Fulfillment Solution Truly Multi-Channel?

Retailers are adapting quickly to serve the buying needs of American consumers. But warehousing and fulfillment infrastructures are not keeping pace with new marketing and merchandising strategies. 

To succeed, keep the merchandise fulfillment warehouse at the center of your business as you hone your company’s fulfillment strategy and follow the best practices set forth by today’s leading firms.

Mastering Multi-Channel Fulfillment  Multiple sales channels should not require redundant inventory, warehouses,  and information systems. Download our free white paper.