How to succeed at omni-channel order fulfillment

Callie Hinman

Your approach to the customer experience may vary by sales channel. But when consumers are shopping, they aren’t usually actively considering which medium they’re using.

So whether a customer is engaging with your business in store, online, or on a mobile app, they expect the shopping experience to be seamless.

Part of creating a seamless customer experience is understanding how important it is to shoppers to have options. Consumers want the ability to place an order online or on an app and either pick up their items at a retail location or have them delivered directly to their home.

They especially want choices for shipping speed and delivery date. And if they decide they want to return something they purchased online, they want the option to do so at a local store.

This is why omni-channel order fulfillment is so crucial for retailers.

Here’s what you need to know about omni-channel order fulfillment and how to implement it in your company. 

The basics of omni-channel order fulfillment

Omni-channel order fulfillment involves much more than just distribution. It includes the entire order lifecycle, from when a shopper completes checkout to when their order is delivered.

More specifically, omni-channel order fulfillment encompasses the following:

  • Storing and managing inventory
  • Processing and managing orders
  • Picking merchandise
  • Printing shipping labels and packing slips
  • Packaging shipments
  • Delivering to destination (e.g., store, customer’s home, or pick-up locker)
  • Handling returns

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Examples of omni-channel order fulfillment

There are three main types of omni-channel fulfillment services: click-and-collect, ship-to-store, and ship-from-store.

Below is a breakdown of each.

Click-and-collect

With click-and-collect — also referred to as Buy Online, Pickup in Store (BOPIS) — retailers fulfill online orders from existing in-store inventory. The shopper then picks up their order at the brick-and-mortar store. It’s a popular option for consumers since they don’t have to pay for shipping and can usually get their items the same day. In fact, 57% of participants in iVend Retail’s 2016-2017 Shopper Survey Report have used click-and-collect services.

One of the advantages of click-and-collect is that it drives more in-store traffic, helping to maintain the relevancy of physical retail. And by bringing online shoppers into the store, you can encourage these customers to purchase additional items during pickup.

Click-and-collect can also help you attract and retain customers. As mentioned above, shoppers aren’t charged delivery fees and can get their orders sooner than they would via traditional delivery. This convenience and cost-savings is a major draw for consumers.

Ship-to-store

Ship-to-store is similar to click-and-collect in that online shoppers pick up their orders at a physical store. However, in the ship-to-store model, the order is not filled with in-store inventory. Instead, the merchandise is shipped from the company’s warehouse and delivered to the store. Retailers can also enable shoppers to receive their packages in third-party locations, such as the nearest post office.

Like click-and-collect, ship-to-store helps bring online shoppers to your brick-and-mortar locations, giving you opportunities to cross-sell. Furthermore, since you can deliver orders to locations other than your own stores, you can offer click-and-collect services to more shoppers.

Ship-from-store

In a ship-from-store model, retailers use their brick-and-mortar locations as additional fulfillment centers. When a customer makes a purchase online, the retailer ships their order directly from the store to the customer’s home. Solutions like Canada Post’s Ship from Store enables merchants to fulfill orders from the closest participating store that has the item on hand. Once the order is ready to be shipped, it is picked up in-store and delivered.

The advantage of ship-from-store is that you can offer faster shipping since your stores are usually located closer to a shopper’s home than your distribution centers. The ability to offer faster shipping can also increase online sales, as the majority of shoppers say shipping speed “greatly” impacts their buying decisions.

In addition, because implementing ship-from-store requires complete integration between brick-and-mortar stores and distribution centers, you can gain better insight into your overall inventory and shipping logistics. As a result, you can identify opportunities to decrease costs associated with order fulfillment.

In general, utilizing stores as pickup locations and distribution centers for online orders can help reduce your shipping costs. In turn, you can use these savings to offset the expense of offering free shipping. And for 90% of consumers, free shipping has the biggest influence on their decision to shop online more.

Implementing omni-channel order fulfillment

Executing omni-channel order fulfillment can be quite challenging. But after successful implementation, the ROI will certainly justify the stress.

The first step in implementing omni-channel order fulfillment is investing in the right technology. The legacy systems used by many retailers weren’t designed to handle cross-channel sales, inventory management, and order fulfillment. This means you’ll need to overhaul your shipping and logistics operations.

To be more specific, you’ll need to upgrade and integrate your e-commerce platform(s), in-store technology, shipping solutions, warehouse management systems, inventory management systems, and order management systems. And if you aren’t already using these platforms, you’ll need to implement them ASAP.

When you’re vetting new solutions, you’ll have plenty of product-specific questions. But there are a few topics you should bring up with every software vendor. Here are some examples:

  • How well does the solution integrate with your existing system? And will it play nice with any new platforms you plan to implement?
  • What does the implementation and integration process look like?
  • How user-friendly is the solution? How long will it take your team members to be totally comfortable using it?
  • Does the vendor provide customer support and ongoing training?
  • How often will you need to upgrade the software? And how will those upgrades be deployed?
  • How easy is it to scale this software as your business grows?

In addition to updating your existing software and investing in new solutions, you’ll need to establish open lines of communication between all involved parties. Because there are so many cooks in the kitchen, so to speak, effective omni-channel order fulfillment requires two things: synchronization and visibility.

All data regarding the location of merchandise and the status of orders must be consistent across locations and channels. And it must be available to all appropriate personnel throughout the organization. Additionally, this data needs to be accessible on-demand via a mobile device.

The takeaway

It may be challenging to execute, but omni-channel order fulfillment is a necessary part of a retailer’s customer acquisition and retention efforts. When a retailer provides multiple shipping and delivery options, it demonstrates a commitment to the customer experience. And willingness to accommodate the needs of shoppers is a great way to build customer loyalty. So if you want to bring customers in and encourage them to stick around, you need to embrace omni-channel.

Callie Hinman is the Content Marketer and Writer at ShipStation, a leading provider of shipping software for e-commerce fulfillment.

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