Mastering omnichannel: A complete guide to retail and fulfilment

Retail is no longer limited to ‘just instore’ or ‘just online’. As customer expectations about service delivery grow, stores are increasingly providing their customers with more ways to buy. Enter omnichannel retail: A strategy in which retailers can cater to diverse (and changing) customer expectations.

But more sales channels equal more dispatch channels – and more potential for things to go wrong during fulfilment. The answer to streamlining fulfilment across multiple channels comes down to a strong omnichannel fulfilment strategy.

In this article, we’re going to tackle everything omnichannel. We’ll look at omnichannel retail and why it matters for your customers, as well as omnichannel fulfilment and how you can switch your operating model to both meet customer expectations and operate more efficiently.

Table of contents

• What is omnichannel retail?
• What is omnichannel fulfilment?
• Types of omnichannel fulfilment strategies
• A real-life omnichannel example: Toyworld Australia
• How to manage an omnichannel fulfilment strategy
• Take the first step in your omnichannel fulfilment strategy

What is omnichannel retail?

Omnichannel retail (or omnichannel commerce) is a multi-channel approach to sales that gives customers a seamless purchasing experience regardless of how they purchase. The ability to sell across multiple channels also lets retailers increase their reach more than just operating a retail store or online selling via a website.

Using an omnichannel approach, customers can buy online via their laptop or mobile device, shop via an online marketplace like Amazon or eBay, or walk into a brick-and-mortar store. Regardless of the method, the experience – and the result – is the same.

Here are some of the reasons an omnichannel retail strategy delivers:

• Omnichannel consumers spend more – One study found that omnichannel retail consumers spend on average 4% more in-store and 10% more online compared to solo channel consumers.
• Gen Z and Millennials like omnichannel – The younger generations show the highest levels of omnichannel retail behaviour, with 83% making purchases in store after viewing them online, and 81% viewing in store and then purchasing online.
• Omnichannel customers are more loyal – A study from Harvard Business Review found that customers who interacted with a business on multiple channels visited a retail store 23% more often over a 6-month period.
  
  

With so many purchasing options available, fulfilment processes need to be fail-proof. Retailers need to ensure that all possible ways to purchase give their customers the best experience, and a big part of that comes down to fulfilment.

What is omnichannel fulfilment?

Omnichannel fulfilment is a strategy where businesses use more than one sales channel to fulfil and distribute orders to customers.

For example, fulfilment channels in an omnichannel sales environment could include in-store product pickups, click & collect, and delivery (with multiple delivery options available depending on the courier company you use, like overnight, same-day, evening express or standard).

With so many delivery options available depending on how your customer has placed their order, you need to make sure the right product is found, allocated and delivered to the right customer as seamlessly as possible. This is where the “fulfilment” part of the equation becomes important.

Types of omnichannel fulfilment strategies

Omnichannel retailers need to manage orders that come in from multiple angles effectively and efficiently. Three popular strategies include instore fulfilment, warehouses and 3PL (third-party logistics) fulfilment.

Typically, omnichannel fulfilment involves a mixture of different strategies. For example, you may find it easiest to use both a central warehouse and your store network.

In-store fulfilment

If you operate brick-and-mortar stores, you might like to keep stock in store until it needs to be shipped. This can be a useful fulfilment method if you’re a smaller business just getting into online retail, or if your products are small and easy to store (and therefore easy to ship). This is also commonly known as a ship from store model.

Warehouse fulfilment

If you want to manage your own fulfilment, operating out of a warehouse could be the answer. In this scenario it’s important to stay on top of your inventory so a warehouse management system (WMS) is ideal.

3PL fulfilment

A third-party logistics (3PL) provider is an outsourced link between the retailer and the customer that manages inventory and shipping for you, so you can focus on your customers and other parts of the business. Your customers place an order with you and a 3PL fulfils that order on your behalf.

A note

What works for one business may not work for another. As you’ll see in the example below, every business is different, and this often means coming up with a fulfilment strategy that works for the needs of your particular operation.

With a franchise model to contend with, the team decided to do something radical: Implement an omnichannel fulfilment strategy and use their store network to fulfill online orders. While this meant needing to get different store owners on the same page, the result was worth it.

Using Starshipit for shipping automation and stockinstore for general omnichannel solutions, Toyworld was able to connect their eCommerce and physical stores and transform their business with an omnichannel fulfilment strategy using ship from store and click and collect.

How to manage an omnichannel fulfilment strategy

While having multiple sales channels is useful for customers, it can get problematic for retailers. This is where you need to consider how your shipping and fulfilment technology setup can enable you to succeed at omnichannel.

There are several key considerations:

Get everyone on the same page

As we saw with Toyworld, breaking down the silos across your business units (like retail and online) is an important part of omnichannel success. After all, consider the customer experience if it’s difficult to move between the retail and online arms of your business.

WMS, IMS and eCommerce platforms

For an omnichannel fulfilment strategy to really perform, you’ll need either a warehouse management system (WMS), inventory management system (IMS) or eCommerce platform that can report SKU counts and the status of orders in real-time. This means you can determine whether a store or warehouse will be the best option for fulfilling and order. Tracking helps you to synchronise inventory across your different channels.

Shipping automation

Shipping automation, or a centralised piece of shipping software, is another important link in the omnichannel chain. This is a platform that sits between your eCommerce systems/warehouse management system and manages everything to do with fulfilment. For example, assigning couriers to online orders, generating shipping labels and more. Importantly, it’s also needs to be able to write-back to your WMS, IMS or eCommerce platform.

Starshipit makes it easy to stay across orders that have been ordered via multiple channels. Child account functionality lets retailers set up accounts for multiple locations then link them back to an overall ‘parent’ account, so operators in separate locations can manage their own fulfilment under the overall umbrella of the retailer.

Take the first step in your omnichannel fulfilment strategy

There’s a lot to consider with omnichannel, both when it comes to omnichannel retail and omnichannel fulfilment. No matter the approach your business takes, the right technology has a large part to play in whether an omnichannel strategy will be successful.

While you’ll likely need to consider a few different platforms (including IMS, WMS and eCommerce), make sure the fulfilment part of the equation is solid with a shipping automation platform like Starshipit. Starshipit works with all the major platforms out of the box, and integrates with leading global couriers including FedEx, DHL, Australia Post, NZ Post and more. Plus, time-saving automations and features help to streamline shipping from start to finish.

Get in touch with one of our friendly team to learn more, or try Starshipit for yourself, free for 30 days.