In retail — as in so many industries — omni-channel is a baseline customer expectation. Once cutting-edge, now being able to offer consistent, personalized service across in-store, online and mobile buying experiences constitutes table stakes in the Digital Age, with a McKinsey report going so far as to say omni-channel is “a requirement for [retail] survival.”

Yet retailers are having trouble realizing the full potential of omni-channel fulfillment. Often, their existing systems — inventory management and fulfillment, third-party e-commerce and logistics platforms, marketing and customer service automations, and more — aren’t integrated and don’t communicate with each other. This lack of coordination and visibility leads to duplicate order entries and inventory shortages, which impact order fulfillment and the customer experience. And when the click-to-customer cycle is slowed, almost one-half of omni-channel customers will shop someplace where they can get their items delivered faster. For example, Amazon — as we all know — sets a high bar for order fulfillment, often able to deliver goods within a single day. Other retailers are following suit, with 75% of specialty supply chain retailers prioritizing two-day delivery, and 42% working toward same-day delivery. 

So, with survival on the line and competitiveness based on an accelerated click-to-customer cycle, what’s a retailer to do?  

Three steps to demand-driven omni-channel fulfillment optimization

Improving visibility, accelerating speed to market and optimizing omni-channel fulfillment requires retailers to transition to flexible and responsive omni-channel setups. Here, we outline three strategies that will set retailers on their way to fulfillment optimization — that is, efficiently managing and fulfilling customer orders across channels while minimizing costs and maximizing customer satisfaction. 

Strategy 1: Meet omni-channel customer demand in real time. Retailers use various technologies and systems to manage sales, fulfillment and distribution. Often, these systems are not connected or sharing data, resulting in inaccurate real-time inventory visibility, which in turn leads to suboptimal decision-making and stock-related issues. Using a unified system that provides a view of both e-commerce and physical store inventories in real time will allow retailers to see what items they have available and where those items are located (physical store, warehouse), so they can avoid stock issues. Ideally, a unified system will provide delivery and return details in one place, and is configurable with allocation rules to help route stock to the best location, season to season, in order to meet fluctuating demand. 

Strategy 2: Understand omni-channel complexity and adjust end-to-end fulfillment operations accordingly. Because omni-channel involves many moving parts (various channels, multiple network points receiving and storing information, dispersed inventory) retailers need to be strategic with their end-to-end planning, which requires optimized forecasting, inventory management and data flow. It’s imperative for data to be connected across channels and systems in order to make more informed decisions. This is where AI can help by automating data analysis such as sales history, customer behavior and significant events. It can quickly extract valuable insights, allowing retailers to make smart decisions fast. For inventory, AI can leverage factors like past forecast accuracy and lead times to define the best inventory levels at each network point. This allows retailers to manage inventory across all channels in order to meet customer demand more efficiently. 

Strategy 3: Capitalize on in-store for omni-channel fulfillment. Today’s customer expects their product faster than ever before, and traditional distribution centers just can’t facilitate those expectations. Increasingly, retailers are moving away from distribution centers and leveraging their own assets (that is, in-store excess space) to house extra products for omni-channel fulfillment. And data shows that in-store omni-channel fulfillment — connecting physical and online channels to deliver the exact product a customer wants, at their preferred POS and via their preferred delivery method — increases conversion by almost a full point vs. brands with no omni-channel offerings (3.73% vs. 2.90%). Omni-channel capabilities include ship-from-store, mobile checkout, curbside pickup, and buy-online-pick up-in store.  

In-store fulfillment is one area where a system leveraging data and AI can really shine. A unified system that uses internal and external data (e.g. historical sales numbers, peak shopping hours, real-time inventory, etc.) can understand when stores are at their busiest — whether that’s time of day or time of year — and make sure to adjust fulfillment away from the busiest stores during those times.    

In the Digital Age, as customer expectations rise and competition increases, retailers have limited opportunities to win and retain customers, and their success in doing so centers on how quickly they can meet their customers’ demands. Accelerating the click-to-customer experience is critical to achieving this. Omni-channel, demand-driven fulfillment using AI and automatic decision-making technologies will give retailers the edge they need to succeed in a very competitive landscape.

Frankie Mossman is chief commercial officer at Dropit.