5 Reasons Omnichannel Order Fulfilment Is About More Than Just Speed…
2021 was a year that moved the world of commerce towards digitalisation more than ever before as the pace of change (accelerated by the pandemic) forced retailers to adapt to changes in consumption, channel shifts and fluctuating customer expectations around speed and convenience.
As ecommerce continues to boom, it has focused retail brands on the task of online fulfilment, with the race to shorten click-to-customer cycle times arguably becoming the single greatest influence on the shape of future omnichannel offerings and processes.
And, while convenience and speed have certainly become driving factors over the last 24 months, as retailers looking to set themselves apart from the competition, other factors have also gained importance too.
CONSUMERS DEMAND SPEED, FLEXIBILITY AND CONTROL
Full visibility on shipments & control over how goods are delivered when and at what locations. It sounds like a business-to-business environment doesn’t it? But it’s not. As consumers are increasingly demanding this same level of visibility, this has rapidly become the de facto state of play for all brands, regardless of B2B or B2C labels.
Today, even before consumers make a decision to buy something, they want to know if there is enough stock available to fulfil their order, and they want to see when an order can be delivered to whichever location they desire.
Then, once the order is placed, they want to be able to stay in control by checking the order; adding or removing items; or having the option to change a delivery address or method without having to listen to terrible ‘hold music’ at a call centre for hours upon end.
Another factor that touches on both control and convenience is having a choice when it comes to delivery options. The pandemic showed us that customers like choices & brands need to offer them: be it home delivery, or at the office, at a parcel pick-up point, maybe to a physical store or even the curb outside that store.
Regardless of options, the root of the matter remains simple: retailers need to offer options to customers and have the agility and flexibility within their supply chains to accommodate these delivery demands.
THE CHALLENGES OF MATCHING CONSUMER EXPECTATIONS
Traditionally, retailers operated with batch driven processes in their warehouses. That worked great when you knew the demand to fulfil ahead of time. With the increasing demand for speed that shifting consumers expectations, batch driven processes are only part of the solution.
Fulfilment processes in the warehouse need to be flexible. Orders need to be fulfilled in real-time, taking into account last-minute changes from the customer while keeping a close eye on cut-off times.
A recent McKinsey survey of chief supply-chain officers found this pace is expected to continue to accelerate over the next two years, with roughly 75 percent of apparel, hard goods, and specialty retailers intending to build out network capabilities that offer two-day or faster delivery, and 42 percent aiming for one-day click-to-customer lead times by the end of 2022.
Over the last 18 months, a number of omnichannel retailers have made significant moves to enable their stores for fulfilment or pickup capabilities to ride this wave and there are clear benefits to using stores for omnichannel fulfilment; enabling greater overall inventory productivity, quicker speeds to customer, and avoiding the need for significant markdowns.
While these benefits can be multiple and meaningful, there are challenges that need to be considered too; making the need for a unified supply chain platform that powers omnichannel offerings, a must have for brands in 2022.
SUPPLY CHAINS THAT CAN BE MORE AGILE
In turbulent times, change is essential for business success, and there is one burning question on the lips of all supply chain chiefs: ‘are our current systems ready for the expectations of tomorrow’s customers?’
With the speed markets are moving right now, companies don’t have the time or luxury to wait for the next software release which is scheduled for some time next year to add omnichannel functionality to a system. And, in terms of system capabilities, brands have similarly high expectations when it comes to speed, as their customers do for goods.
Gartner expects that, by 2025, cloud-native platforms will serve as the foundation for more than 95% of new digital initiatives, a significant increase on the ‘less than 40%’ it reported in 2021. Many traditional organisations that struggle to build the necessary applications will be API-first or API-only, rendering traditional SaaS and custom applications ‘legacy systems’
Systems that are built on microservices are flexible and respond fast. Functionality can be updated or added to customer systems instantly by plugging in new services, almost like downloading a new app on your phone and using it a few minutes later – making for faster and (crucially) more agile supply chain capabilities.
BRAND VALUES LIKE SUSTAINABILITY MATTER
In 2022 it's not just about speed and agility though. Increasingly sustainability is becoming a driving factor too for brands. More and more, customers expect the brands they buy from to share their values and be committed to improving the planet.
And, at a time when there is a significant shift towards environmentally conscious brands, this is not something that should be ignored when considering the manifest benefits of omnichannel capabilities.
Whether it’s empowering consumers to make ‘greener’ buying decisions; creating smarter algorithms that allow organisations to reduce CO2 emissions by filling trucks more efficiently; partnering with carbon neutral brands like Google Cloud ; or simply designing products that place both people and planet at the front of mind, Manhattan Associates is as committed to helping our customers run their supply chains in more sustainable ways.
We must not lose sight of the fact that global commerce is vitally important to the livelihoods and well-being of billions of people around the globe, and although the inherent nature of the movement of goods can never be entirely ‘green’, we must acknowledge that this does not mean it cannot be more sustainable for our planet than it has been in the past.
SPEED DOESN’T GUARANTEE SUCCESS
Yes, speed is important, but it doesn’t naturally equate to success. Speed needs to be harnessed and controlled: just take Formula 1 as an example. While an F1 car may be superfast on a long straight, if there are tricky corners and tight chicanes, a vehicle with a lower top speed, but greater agility and handling may produce a faster lap.
When it comes to omnichannel retail fulfilment, a ‘reverse engineering’ approach is often the best way to tackle the challenge; starting at the end of the journey with the consumer and working back through the processes, to the very software architecture that underpins it all.
By doing it this way, when rapid consumer shifts occur, your supply chain network, systems and people will have strong IT foundations in place, enabling them to speed up, slow down and realign with minimal impact to any point in the fulfilment process, regardless of the channel.
For most retail supply-chain leaders, creating a faster fulfilment network is not surprisingly top of mind after the retail and supply chain disruption of the last 24 months. However, it is important to remember that improving the efficiency of a fulfilment-network is but one among a number of areas brands must master to remain competitive in the blended world of frictionless commerce.
21st Century retailers need to be prepared to sell through ‘owned’ moments on a phone at the kitchen table; in a physical store; or the manufacturing shop floor; in ‘paid’ moments on Amazon or through ‘earned’ moments on Instagram.
Removing friction from all parts of the buying and fulfilment journey is the retail panacea and brands that are able to achieve this will actively differentiate themselves from competitors with a winning combination of speed, agility, control, sustainability credentials and happy customers!