Blog Posts How the Order Fulfillment Process Can Make or Break Your Omnichannel Strategy
Omnichannel businesses integrate multiple marketing channels to create a seamless shopping experience. Delivering that experience, however, requires a well-defined order fulfillment strategy.
Order fulfillment refers to the logistics taking place from point of sale to customer.
Whether you’re a local business adding online sales, a specialty brand adding subscription services, or a growing corporation adding product placement in stores nationwide—order fulfillment is about to get complicated. Make sure you are set up in four key areas, and you can continue to watch your business grow.
Benefits of Omnichannel Fulfillment
Buyers and consumers are, in a way, already omnichannel themselves. People weave digital and physical spaces together every day, and switch from email to social to the web without even thinking about it. And omnichannel fulfillment strategy keeps your brand relevant and accessible. Consider:
● Brands with strong omnichannel customer engagement retain about 89% of their customers. (Brands that do not, retain about 33%.)
● 87% of shoppers want a more seamless shopping experience.
● 70% of U.S shoppers have used the buy online, pick up in store option.
Expanding ordering and distribution channels creates better engagement, boosts customer loyalty, and drives revenue.
But how do you know if an omnichannel strategy is right for your business? Ask yourself a few questions:
● Are your customers and prospects online?
● Is your competition in more spaces (web, email, social, retailers, etc.) than you are?
● Has your audience asked about your absence on a channel (no online ordering, no social presence, not available in stores, etc.)?
● Has your audience complained about your inaccessibility?
● Is interest in your product or service expanding beyond your current service area?
● Could your product or service benefit people beyond your current service area?
● Is your business running smoothly?
If most of your answers were Yes, then it might be a good time to expand into an omnichannel strategy. Fulfilling customer needs in omnichannel business, however, means efficiently handling warehousing, customer orders, packaging, and shipping.
Warehousing in an Omnichannel Business
More channels means more business opportunities, which often means more inventory. Expanding inventory requires expanding storage and distribution space. As business grows beyond your current service area, you may also need to consider adding warehouse spaces nearer to new markets. Those spaces will then need to be networked to keep inventory and shipment information consistent and accurate.
Start by making sure that you’ve optimized the space you have. It’s easy for a familiar warehouse space to get disorganized and untidy, which wastes valuable square footage. Before you expand, make sure you’ve maxed out your current space:
● Clean it out and make sure you’re not storing anything you don’t really need.
● “Tunnel the rack” by adding storage over cross aisles. (Just be sure to include netting or a pallet deck so nothing falls to the floor.)
● Add racking to docking areas for the storage of pallets and packaging materials.
● Make sure racks are the right size for your products. If packaged products are 5 feet tall, then shelves don’t need to be 7 feet apart.
You can also work with a private contractor who specializes in warehouse design. A completely new layout may open up all kinds of space you didn’t have before.
When it is finally time to expand, you have three options:
1. Rent shared warehousing space. Renting can be a good option if you don’t want to maintain the space, or if you might not need it long-term.
2. Build a new warehouse. If you need exclusive space, or can’t find any to rent where you need it, you might choose to build a new space for yourself. You’ll get to design it for your specific needs, but you’ll also need to maintain it.
3. Work with a 3PL partner. An experienced logistics company can take all the guesswork out of establishing a new space. They may have space for you to use in your desired market, or they should be able to build one out for you.
A successful omnichannel business starts in its warehousing and distribution space. Make sure they are well organized, efficiently run, and networked with good warehouse management software systems to keep orders coming and going smoothly.
Receiving Omnichannel Purchase Orders
Expanding to an omnichannel strategy will mean that orders start coming in from several different channels. Make sure your software and systems have the capacity to receive and centralize orders from every channel (phone calls, websites, mobile platforms, local stores, sales reps, etc.).
That program should also, then, be able to keep inventory accurate and up-to-date across every platform. If a customer orders the last of a produce over the phone, it needs to disappear from the website, for example.
If your systems don’t have that kind of capacity, you can either upgrade or work with a 3PL partner who has the software and technology ready to go. If you are keeping all of your logistics functions in-house, it makes sense to invest in a good order fulfillment platform for your company. If you are outsourcing other services—like warehousing and/or transportation—it can save time and a big initial investment of resources, to work with your provider’s existing systems.
Packaging Omnichannel Orders
Once your sales start taking off, your current packaging system may need an upgrade. Can your systems handle different packaging requests from retailers? If you’re expanding to a subscription service, how many customer packages can you create in a timely fashion? Will your existing packaging systems scale up? If so, how much will they scale? 10%? 25%?
Know your limit so you can plan to make adjustments as you reach it. Don’t get taken by surprise. As you add one new channel at a time, keep a close eye on your packaging capacity.
Options for expanding your packaging capabilities are similar to receiving customer orders: you can DIY or you can work with a pro.
Expanding your own packaging systems will require new build-outs, more staff, and increased packaging inventory. For a small, initial expansion this can be a good option, rather than scaling all the way up to a logistics partner.
The more you expand, however, the more you will start to see the value in working with an experienced 3PL company. A good partner will be able to design a system that fits your unique needs, and take care of as many different types of packaging and styles of kitting that your customers demand.
Omnichannel Transportation Considerations
All of those new orders are, finally, going to put new strains on your shipping systems. Look at your current processes and, again, ask yourself how much they will scale up. You might be able to handle a little more with your current setup, but how much more? Don’t let your limit catch you by surprise.
When you’re ready to expand your shipping and transportation services, there are four ways to do it:
1. Use commercial/consumer systems like FedEx or UPS. These will help you scale to an extent, but they become much less efficient around holidays and may not be available on weekends.
2. Hire independent truck drivers. Experienced and flexible, you don’t owe them benefits, but they’re not the most cost-effective option.
3. Expanding your own fleet is a big investment (both initially for trucks, and ongoing for staff, fuel, and maintenance), but if your business growth can sustain it, a private fleet provides all the flexibility and control you will need.
4. Partner with an experienced logistics provider who has a private fleet, and good brokerage relationships. A good 3PL company will already have the resources you need to get product to market on time, and you can scale usage up and down as needed.
Transportation is the last big piece of the omnichannel puzzle. As your business gets set to expand, make sure you have wheels on the ground everywhere you will need them.
Omnichannel Strategies Need Flawless Order Fulfillment
As technology continues to pervade daily life, consumers and buyers increasingly expect a seamless brand experience from the store to the sales rep to the website and social media channels. Omnichannel business strategies make that experience possible.
But each step along the order fulfillment chain—from warehousing, to receiving customer orders, to packaging, to delivery and transportation—has the power to make or break your omnichannel business strategy.
As your business expands, make sure the entire chain is running smoothly and is poised for growth. Develop a strategy today for expanding your capabilities tomorrow, so you can put those plans into place as soon as they are needed.