Featured Image for The Supply Chain Challenges of Omnichannel

The Supply Chain Challenges of Omnichannel

In the current retail marketplace, customers expect to have the ability to make purchases from a particular store in-person or online with the same seamless buying experience. In others words, consumers want to buy on their terms. This is the definition of omnichannel. Omni_Channel_Analyst_grau1

Creating and running an ecommerce website is now a pretty simple process for companies of all sizes, so if you are a brick and mortar retailer getting “online” is easier than it has ever been. The challenge of omnichannel actually lies predominantly within the supply chain – with order fulfillment and inventory management being the areas most affected.

Omnichannel requires a supply chain process with full product visibility and flexibility to match these new customer expectations.

Consider the challenge of a customer attempting to order a product from an online store, only to get an “out of stock” message. Yet, the same retailer has plenty of that item in stock in a store or another warehouse that holds stock assigned for sale in stores. It is silos like these that separate brick and mortar channel’s inventory from other channels (such as ecommerce) and the lack of visibility across channels becomes the problem.

Technology and vendor partnerships that provide true inventory visibility is vital to retailers looking to fully integrate their ecommerce and in-store channels.

The questions retailers need to be quick to answer include when is it best to hold back stock for the ecommerce channel, or send it to stores? Or vise versa? Can stock be pulled from another channel’s inventory – and how will it be tracked?

There is no one approach to overcome these challenges that can serve as a road map for all retailers. Clearly however, the right approach must include technology that enables inventory to flow from one ”pool” and enable complete visibility throughout the supply chain.

The goal must be to find the right balance of agility to match the specific needs of a market versus efficiency by operating in a way that optimizes inventory management and logistics costs.

Returns management is another supply chain process affected by omnichannel. It’s importance has a lot to do with the the large impact returns have on the overall customer experience for any brand. It’s common today for consumers to purchase online, yet return products in store. This means the reverse logistics process retailers use for dealing with returns presents many of the same inventory management challenges of selling in the first place.

Omnichannel is not the future – it is the present. To remain competitive retailers must master the challenges this approach places on the supply chain.