Omni-Channel Fulfillment: Strategies for Success

Globe-trottingTwo weeks ago, I wrote an article about my now just released market study on omni-channel fulfillment technology. The study incorporates transportation management, warehouse management, distributed order management, inventory management / store replenishment, and demand planning. In the article, I outlined the key growth drivers for omni-channel fulfillment technology. These included the growth of e-commerce, the fact that technology is getting better, the need to meet customer expectations, and the proliferation of cloud solutions.

Today, I want to take a closer look at what I’ve outlined as the key strategies for success in the omni-channel fulfillment market. These strategies serve as a guide for both practitioners and software suppliers to continue to grow in the market, and evolve to meet the changing nature of business to consumer commerce.

Support E-Commerce and the Omni-Channel Paradigm

The current omni-channel retail paradigm shift, driven in large part by the surge in e-commerce, is arguably the most significant supply chain management trend in the last decade. Brick and mortar retail sales have been relatively flat while e-commerce sales are growing at double-digit annual rates. The e-commerce trend is stimulating interest in technology to streamline and modernize order fulfillment.

Invest in Fulfillment Technology

While the above paragraph noted advanced interest in omni-channel fulfillment technologies, the investment is not where it needs to be. There are many important technologies that are simply under-utilized, including TMS, DOM, and demand planning. These technologies allow companies to become more efficient for allocating inventory to stores, warehouses, and DC’s, efficiently, reliably, and cost effectively move freight from origin to destination, and capture all information in the order management process across all relevant channels.

Continue to Innovate

Innovation is crucial for expanding the current footprint of omni-channel fulfillment. While ARC has outlined the five key applications for executing seamless fulfillment, companies need to continue to look at new technologies and innovations. This is especially true for the last mile. Crowdsourced options for delivery are a cost-effective manner for home delivery, yet these solutions are still in the infancy stage. Many companies are waiting to see how these companies pan out, but more emphasis needs to be placed on making bold moves with high reward potential.  This indicates there are a lot of white spaces out there that can be filled by suppliers. This can be accomplished by new solutions or acquisitions.

Target High-Growth Markets

The omni-channel fulfillment market is forecast to grow at an impressive pace, reaching over $3.7 billion by the year 2020. To help fuel this growth, companies need to target high-growth markets. From a high-growth market perspective, ARC advises companies to look at the Tier 2 market. While the majority of the largest players are actively targeting the Tier 1 market, there are more and more smaller companies venturing into the omni-channel world. This second tier of customers will continue to claim its share of the market, and provides an excellent area of growth for suppliers.

Conclusion

The new omni-channel paradigm is not going away; in fact, omni-channel commerce is set to continue to grow. Practitioners and software suppliers alike need to establish and follow a roadmap for success, or they will run the risk of getting left behind. This roadmap includes supporting the changing nature of the e-commerce and omni-channel paradigm. To do so, they must invest in technology; they need to make solutions more accessible, robust, and easier to use. Suppliers must continue to innovate to meet the demand of their customers, who in turn, must also innovate to meet the demand of their customers (the end consumer). Targeting high growth markets, such as tier 2 and tier 3 retailers, is a recipe for success. The ease of entry into the e-commerce marketplace has increased the number of companies selling online. Even smaller companies will need the appropriate software applications to seamlessly fulfill customer orders. These markets will become more important as time goes on.

Comments

  1. Great article. RateLinx has many large retailers as clients that are counting on RateLinx to deliver to the bottom line. Most of the retail customers have over 1,500+ stores. We are doing so much in this area.

Leave a Reply

Your email address will not be published. Required fields are marked *