Multi-channel selling is here to stay – and fast and accurate multi-channel fulfillment is critical to your competitive advantage. (In other news, snow is cold.)
What’s less apparent is how to make outstanding fulfillment possible without spreading your inventory or budget too thin.
Amware’s VP of Solutions, Duncan Thomas, has some ideas on that topic, which he shared during a recent Q&A session.
What’s a multi-channel, or omni-channel, sales strategy?
At its heart, multi-channel selling is about expanding your company’s presence beyond a simple web or brick-and-mortar store to make it as easy as possible for customers to find, order and receive your product – regardless of sales channel.
What does the typical multi-channel merchant look like?
It’s any business that sells through more than one any one of these channels:
- Brick-and-mortar retail stores
- A company-run eCommerce website
- Online marketplaces, like Amazon, that sell many suppliers’ goods
- Direct selling via reps/consultants
Is multi-channel selling a sound strategy?
It’s a non-negotiable one. As the old saying goes, the customer is always right. And what today’s customer wants is the opportunity to shop for and receive product via a wide variety of methods and locations.
Amware wrote an eBook about multi-channel fulfillment recently that suggested some companies were struggling mightily with product fulfillment for a multi-channel sales strategy. Why is that the case?
Too often companies make the mistake of fulfilling orders for different sales channels with separate distribution structures and strategies. As a result, they wind up with everything from too much inventory and warehousing space to too many truck runs and redundant management structures. Sure, eCommerce fulfillment is different from retail store replenishment. But it’s all the same inventory.
So what’s the antidote?
Smart companies take a more integrated approach to multi-channel fulfillment – including maintaining one master inventory supply instead of having separate inventory for each channel.
When companies maintain a single inventory pool for multi-channel fulfillment, they can use the same labor pool, systems and facilities for all of orders, regardless of each order’s origin and requirements. In the long run, this enables them to minimize facility, labor and transportation costs.
Is it really possible to house every sales channel’s inventory together? After all, B2B and B2C sales channels tend to have very different storage and handling demands.
That’s certainly true. A bulk warehouse does require a lot of racking built for pallets and cases; forklift trucks to move those units; large spaces for receiving and staging outbound freight; and docks for loading and unloading trucks. That’s a far cry from the layout at a fulfillment center, where there needs to be lots of space for picking single items into totes or carts; facilities and software for preparing small package shipments; and, often, conveyors and other automation systems.
But here’s the kicker: There’s no rule that says you can’t house all of those kinds of equipment, processes and activities within the same facility. In fact, most companies already do.
What are some tangible ways that companies can make such a multi-channel, fully integrated warehousing arrangement work?
Many companies opt to create an actual, physical separation (i.e. walls or barriers) between the various portions of their multi-channel warehouses that serve different sales channels so there’s absolutely no room for confusion.
Others like to use a more process-driven approach that establishes three separate working regions within each facility: one for B2B bulk order filling, one for B2C each-picking, and one for the receiving and replenishment area that houses most of the inventory and that supports both of the other areas. As forecasts or orders are received, items are retrieved from the receiving and replenishment area and moved to one of the other two regions as needed so that they can be handled, processed and ultimately shipped out the door per each channel’s highly detailed (and distinct) specifications.
Shifting gears a bit, a big part of the growing multi-channel movement is giving customers multiple pick-up and delivery options, including allowing them to pick their goods up at local stores. Is there a way for companies without a brick-and-mortar presence to offer something comparable?
Although companies may not be able to make their multi-channel fulfillment centers look as eye-catching as retail locations, there’s no reason why these centers can’t be used for customer pick-up. It’s already happening in heavy goods fulfillment. And many people expect it to be the wave of the future for other product genres, too.
The only caveat is, you’ll need to ensure that your facilities have a clean, well-marked and safe pick-up area for customers as well as adequate personnel on hand to greet and assist them. It also means that for best results, these centers will need to operate during the hours or days of the week that are most convenient for customers.
Why is it so important to manage inventory for multiple channels using a single system?
Using multiple systems to maintain inventory is a recipe for inefficiency and frustration. Unless companies have a clear, unified and real-time view of how much total inventory they have and where it is, their various locations will tend to carry more inventory than they need to for fear of having a delivery disruption. Plus, they’ll find themselves scrambling to move stock from place to place – and increasing their freight and labor costs simply because supply and demand hasn’t been properly synced.
What capabilities should that single system have?
The system needs to be able to integrate with popular eCommerce platforms like Magento and Shopify, even if those aren’t platforms a company is currently using (because there’s every chance they might use them in the future, and allowing for scalability and future growth are key).
It also needs to be able to provide visibility across the entire order cycle, not just the warehousing portion.
And, if part of a company’s multi-channel strategy includes selling consumer goods through retail chains or online marketplaces, it also should offer EDI capabilities and processes to automate and foolproof efforts to comply with retail routing guides. Many of these retailers’ guides are quite complex – with hefty chargeback penalties for non-compliance – so such capabilities could wind up being worth their weight in gold.
Any final thoughts to share on fulfillment with the multi-channel marketers out there?
When looking for multi-channel distribution, find a partner with experience handling many different types and sizes of products and fulfilling orders to different end users. A B2C fulfillment company may not understand the complexities of retail distribution and B2B-focused 3PL may not have the know-how and processes to handle high-volume consumer fulfillment. A total integrated solution is the key.