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How the Reality of Omni-Channel is Changing Transportation

A world where consumers want the freedom to shop and buy through a variety of channels while receiving the same brand experience and rapid, no-cost delivery, challenges retailers and logistics providers to come up with new and cost-effective solutions.

Amazon has been a phenomenal catalyst in the market, driving many companies to rethink how they sell to and service customers and how they manage inventory and transportation, says Tom Nightingale, president of Genco's logistics business. "The bottom line is that the consumer is in charge," he says. "With the omnipotence of cell phones and computers and high-speed internet access, consumers have many more choices and everyone in the supply chain is trying to figure out how to respond to these conditions."

Clearly this new environment requires very fast delivery capabilities, he says. "Our society wants instant gratification and that often means they want products the next day. People want quicker and cheaper and that is what it takes to be competitive against some of the giant big-box retailers that have such amazing cost advantages." A problem for retailers and logistics providers is that consumers are getting hooked on free shipping, he says. "But shipping is never really free; it is baked into the price somewhere."

Today the average consumer has the same kind of visibility into the marketplace that used to be available only to procurement or purchasing specialists, "who had books of suppliers as big as their desks," he says. "Having this power in the hands of the consumer forces retailers and e-commerce providers to be that much sharper in how they price things, how they go to market and how they keep transport costs to an absolute minimum."

And it is power and not just choice that today's consumers hold, says Nightingale. "Think of the prevalence and impact of line reviews. If a consumer has a bad experience, he can immediately share it with the world."

In a nutshell, the key to success in an omni-channel environment is simple, says Nightingale: "Regardless of which channel consumers choose, you have to give them the same customer experience at every possible touch point."

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