Powerful Reactions: Omnichannel Responds Well in a Crisis

omnichannelBy February, omnichannel retailers were responding to the Coronavirus (COVID-19) pandemic, closing stores and factories in China, and reallocating inventory to still-active markets to mitigate the pandemic’s initial impact. Changes of this magnitude and nature do not come easily for most retailers, but those with truly integrated omnichannel systems can see, project demand for and shift inventory with relative ease, just one of the many ways omnichannel retailers can respond to a global pandemic or any number of disruptions that global supply chains may encounter.

When faced with major supply chain disruptions, organizational responses tend to fall into one of three categories: immediately reacting to the disruption, recovering or rebuilding a supply chain, and planning for the future. While supply chain disruptions can be and often are limited to a specific geography or industry, nearly all retailers around the globe, even the most prepared, had to react to the Coronavirus pandemic. Some simply closed their doors or shifted ad spend to support e-commerce efforts, but omnichannel organizations had many more options available to them to initially react and look ahead to recovery and preparation modes.

  1. React

As global retailers with operations in Asia first felt the impact of Coronavirus on their supply chains, those with the capabilities and foresight to do so reacted quickly to reallocate inventory geographically among stores and distribution centers. The inventory visibility, demand forecasting and advanced fulfillment capabilities afforded by their tight omnichannel technology integration empowered them to support e-commerce and active stores by swiftly initiating:

  • Ship-to-store from distribution centers or other stores
  • Ship-from-store to support rising e-commerce sales
  • Online order pickup in stores or curbside
  • Advanced parcel transportation management that includes:
    • Parcel consolidation to control costs with fewer shipments and border crossings
    • Mode shopping to find effective alternatives as mass flight cancellations began
    • Automated carrier and rate shopping
    • Cross-border compliance and documentation

Not only were omnichannel retailers able to respond more nimbly; they also raised the bar for responding to disruptions as a wide world of retailers watched. Other global retailers have taken note of the inherent advantages of an omnichannel model, what it did for others during this pandemic and what it could do for them when they encounter the next disruption. Many that found themselves handcuffed in pandemic-stricken markets now better understand the importance of being able to leverage offline inventory to support e-commerce and make other on-the-fly adjustments, perfect motivation to better prepare for future disruptions.

  1. Recover

Whether or not retailers could immediately respond to supply chain disruptions to lessen their impact with such measures as global inventory reallocation, they at least had to consider the future. In recovery mode, retailers begin working to overcome disruptions and re-establish their supply chain projects and activities, all to climb back to their position prior to the pandemic wreaking havoc. Facing this pandemic, retailers must also consider the very short preparation window that lies ahead for peak season 2020, the advantages of completing system upgrades and required maintenance now, and more.

  1. Prepare

What happens when the next crisis strikes? Those that merely recover their previous operational capabilities can expect another roller coaster ride over which they have very little control. Some have decided to make good use of this downtime by going further to embrace critical preparations for omnichannel, planning to go to whatever lengths necessary to ensure a more powerful and swift response when confronted with the next disruption.

Crises come in many forms, and these newly motivated retailers seek to elevate their operations and better insulate their organizations. In this case, we face a global pandemic, but crises can take the form of weather events, significant industry evolution (the Amazon effect, for example), government-driven change (Brexit, for example), trade wars and tariffs, and more. With many retailers currently experiencing some downtime and reduced demands, they not only look to the immediate future to prepare for the looming peak season; some have begun taking steps to lay an omnichannel foundation.

Some retailers have begun to embrace the cloud to decrease supply chain risk, for example. A digitized supply chain, most easily established via cloud solutions, can help retailers predict and anticipate risk while improving transparency and coordination across the supply chain. Digitized supply chains are faster, more accurate and more flexible than other supply chains, and each is anchored by a single system of record or source of truth for the organization, often a warehouse management system.

Others have prioritized improving tracking and transparency. Visibility, transparency, tracking and proactive problem solving empower retailers to provide heightened customer service. They use these capabilities to improve customer service by pre-empting delivery delays and communicating real-time information to customers.

With an eye on how quickly the world in which we operate can change, more retailers have also come to realize the benefits of a dynamic, multi-carrier approach to order fulfillment and parcel shipping. Rate shopping, for example, has become more important than ever as surcharges increase.

Using fulfillment analytics to improve the process for critical decision making has also gained steam in the wake of this pandemic. Some retailers who have not prioritized the use of real-time analytics in the past have opened their eyes to the benefits as of late. Having the ability to analyze e-commerce fulfillment data and unlock insights can transform fulfillment and slash costs by identifying problems, their root causes and opportunities to improve.

Today’s preparations empower tomorrow’s omnichannel responses

Retailers all over the world have suffered in 2020. Many were less prepared than they could’ve been to leverage omnichannel capabilities to lessen the impact of this pandemic. While omnichannel retailers were able to respond swiftly and nimbly, others had to sit by passively. Now, looking to emulate the examples of others, many are laying the omnichannel groundwork to give their organizations more and better options going forward.

omnichannelKen Fleming is president of Logistyx Technologies, the leader in Transportation Management for parcel shipping. Since the mid-1990s, Ken has led successful launches of many new technologies and services, including supply chain management, e-commerce, SaaS, and enterprise software and systems integration solutions. Ken can be reached at ken.fleming@logistyx.com.

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