The retail industry has changed forever. The advancement of technology, especially mobile devices, has ushered in a new era of how customers prefer to shop. A 2017 Harvard Business Review study found that 73% of people prefer to use multiple channels during their shopping journey, and this has since grown to more than 90%. All retailers must now have omnichannel fulfillment strategy in place to take advantage of ever-evolving consumer preferences, or they risk being left behind more digitally savvy brands.
If you’ve struggled to optimize your omnichannel operations, or you’re starting from scratch, there are numerous challenges you should be aware of so you can develop a successful omnichannel fulfillment strategy. A poorly executed omnichannel fulfillment strategy will do more harm than good if consumers become frustrated with a disjointed shopping experience and take their business elsewhere. Let’s take a look at how you can minimize these hurdles and implement solutions to attract consumers and increase sales across the board.
Buy Online, Pick up in Store (BOPIS)
A retail model that has been given new meaning during this period of social distancing, many consumers enjoy the freedom that BOPIS offers to purchase items online and not have to wait for their orders to be shipped. This omnichannel fulfillment strategy is ideal for encouraging customers to progress from exploring products to making a purchase. While searching for items in the comfort of homes, they can:
- View in-store inventory online on the product detail pages.
- Filter available product catalogs by store. If an item is sold out at one location, customers can have that product shipped to another store for pick-up.
- Access notifications about their orders, including when their items are ready for pick-up.
Challenges
Despite these retail benefits, some brands lack the right omnichannel fulfillment strategy to take advantage of this retail trend. Companies’ e-commerce systems aren’t designed to keep track of inventory at the store level. This situation often results in e-commerce platforms showing items out of stock, when they’re actually available in the store. Other businesses face hurdles because their e-commerce platforms don’t integrate with their point-of-sale (POS) systems.
Solutions
- Implement a Distributed Order Management system equipped with application programming interfaces (APIs). This capability will ensure your POS and Warehouse Management systems can be connected to provide real-time product inventory to online shoppers.
- Ensure retail associates have access to in-store apps to fulfill BOPIS orders.
- Launch BOPIS in select cities first by doing pilots at flagship stores; use those learnings and scale to other locations.
Stores as Fulfillment Centers
No one wants to wait an eternity to get their hands on an item after they’ve made a purchase. When retail is concerned, people desire their items today, not next week. Two-day shipping is nice, but you know what’s even better? One-day shipping. To accommodate shoppers’ demands, retailers can use their stores to serve as fulfillment centers and expedite shipping. This process also enables companies to sell more inventory at full price by shipping orders from stores directly to customers who purchase online.
Challenges
The main challenges with using retail stores as fulfillment centers vary between both operation and associate levels:
- Retailers must manage inventory to ensure online purchases don’t consume all in-store products to avoid compromising the in-person shopping experience.
- Some store associates may become unmotivated if they’re not credited for online the same way they’re compensated for in-store sales.
- Employees need a way to see how much inventory is available and how much is already promised to online shipments to avoid over-promising in-store customers.
- Companies lagging on the technology front often lack systems that can smartly route online orders to ensure service-level agreements (SLAs) are met and costs are minimized.
Solutions
Retailers can set their safety stock for their best-selling items to 2 to avoid selling out of their most popular products. When the in-store inventory for that item hits 2, a distributed order management (DOM) system will ensure the store stops fulfilling online orders until the stock is replenished.
- Incentivize store associates by crediting stores for the online orders they fulfill.
- Ensure store associates can use mobile apps to search for inventory they can promise to consumers, not simply view quantity on-hand. With these apps, store employees can offer walk-in customers alternate options like picking up items at a nearby store or shipping the products to their home instead of turning them away or, even worse, selling them an unavailable product.
- A DOM system utilizes a rule-based, order-routing engine to route orders to the nearest store or warehouse based on location and inventory availability. This tool reduces fulfillment time and cost and ensures SLAs are met.
- Ship products from stores that are selling better online and not as well in-store to fulfill orders. This strategy will enable your company to sell products at full price by having constant access to this popular inventory to fulfill orders.
In-Store Mobile Checkout & Endless Aisle
It can be daunting for shoppers when they turn the corner at a store and see a never-ending line, and their frustration instantly spikes. Luckily, retailers can ease customers’ pain by using a mobile POS solution to offer a more streamlined shopping experience to consumers. A mobile POS system enables store associates to gather data, answer questions, engage shoppers, and even check out customers on the spot so they don’t have to wait in long lines. With the right clienteling, associates can use a customer’s saved address from their online account, find their products nearby, and order these items on the mobile POS so the customers can be on their way.
An endless aisle concept is also ideal for enhancing the shopping experience. Let’s face it; not every store carries every size, color, or product model at every location. But by enabling customers to virtually browse items in-store, companies don’t lose out on these sales. Instead, consumers can order products that aren't in stock or sold in that particular store and have their items sent to their homes.
Challenges
Unfortunately, some retailers cannot always fulfill orders easily in this fashion because they:
- Lack real-time inventory visibility to identify items in stock at other stores.
- Don’t have access to customers’ previous shipping details from online orders, resulting in a longer mobile checkout.
Solutions
- Enable your sales associates to use mobile apps to look up product catalogs that aren’t available in-store to accommodate customers’ orders.
- Offer real-time inventory status of nearby stores, enabling customers to pick up items right away and not wait for shipping.
- Ensure associates have a full view of their customer profiles so they can take orders on the spot without asking the customer to fill in their information again.
Buy Online, Return in Store
As online retail giants Amazon and Kohl’s have proven, consumers are demanding ways to buy online and return in store, which is mutually beneficial to shoppers and businesses. For customers, they maintain the freedom to shop in their homes and receive refunds instantly, there are no return fees, and they can even exchange their items for another product. For companies, receive more foot traffic and increase their brick-and-mortar sales opportunities while people are in-store. Retailers can also easily save the sale by exchanging items when customers receive the wrong size or color.
Challenges
However, there are certainly challenges to this retail model from a business standpoint. Store associates don’t want to be constantly accepting returns because this will hurt their stores’ key performance indicators (KPIs). For example, time spent processing returns takes away from associates’ ability to sell or assist customers.
If a retailer lacks integration with an e-commerce platform and a POS system, employees can’t easily access online order histories to process these returns. This issue prolongs the return process, leading to frustrated shoppers who want to be on their way but must wait until this information is confirmed. If you make customers wait too long, they can easily turn to one of your competitors.
As a part omnichannel fulfillment strategy, there’s another aspect of the buy online, return in store model. If the items returned aren’t always part of the store’s regular assortment, it can be difficult to resell the products. Your business will be left with inventory you can’t sell, harming your bottom line.
Solutions
- Restructure your KPIs so that taking an online return doesn’t hurt in-store metrics.
- Integrate your online and POS systems so associates can find online orders and process returns efficiently.
- Prioritize shipping items that were returned to a store from an online order.
Mobile Commerce
Mobile devices have become an extension of people’s hands. In the retail world, phones are a key tool when researching products while in-store. A 2019 survey conducted by Kelton Global discovered that 69% of people would rather refer to their mobile devices for product reviews in-store than ask a retail associate, while 53% of respondents use their mobile device to find promotions rather than seek help from an employee.
In the mobile age, speed is the name of the game. Retailers must have websites that load quickly (3 seconds or less is ideal) to ensure customers don’t abandon their search, or they may lose out on a sale. Retailers need to develop their websites with a mobile user interface in mind, include location settings to find nearby stores, allow customers to search for products by scanning in-store items, and check out through their smartphones.
To have a successful mobile commerce strategy, retailers must have: 1) high-speed mobile-first websites 2) self-checkouts using mobile sites in-store, and 3) store associates who use mobile devices to complete in-store orders or facilitate online pick-ups.
Challenges
Mobile commerce has made life easy and convenient for customers, but the same can’t be said for retailers. Businesses with a monolithic eCommerce system will likely struggle to achieve that sub-second page load time. These companies may simply lack the time and investment to equip their brands and associates with the right mobile commerce tools to support shoppers’ preferences. Inexperienced sales associates have not been trained to work on omnichannel fulfillment strategy experiences and may also require further education to use new technology.
Less tech-savvy shoppers may also require some guidance to understand all that mobile commerce has to offer. However, some retailers fail to provide the necessary steps for shoppers to follow in-store on how they can use their mobile devices to perform self-checkouts.
Companies often fail to implement mobile technologies that engage consumers and boost efficiency. For example, without a complete mobile POS solution, retailers cannot streamline the checkout process and enable store associates to spend more time helping in-store customers.
Solutions
- Upgrade the technology stack by implementing an API-first headless commerce platform and progressive web applications (PWAs). Unlike monolithic eCommerce systems, headless commerce separates common business logics by using APIs and connects to multiple customer touchpoints or channels to cover all customers’ buying preferences. PWAs, which are built on common web technologies such as HTML, CSS, and JavaScript, will ensure web pages achieve sub-second load times.
- Train sales associates on how to use the latest mobile technology. By enabling customers to use mobile commerce in-store to expedite the checkout process, associates can devote more time to servicing customers behind the register. It’s a win-win.
- Display proper signage around your stores to educate customers how to search for products through their mobile devices and use their phones to complete checkouts.
- Select a Software-as-a-Service (SaaS) solution that integrates with your existing site to avoid having to create merchandising promotions for each site (mobile and desktop).
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Despite all of the potential hurdles that come with a successful omnichannel fulfillment strategy, there are best-in-class solutions to address all of these problems with a single platform. Whether you started as a traditional brick-and-mortar retailer, or you’re a digital native that’s found success online, learn how we can support every aspect of your omnichannel transformation.
Request a consultation with our omnichannel experts to learn how we can optimize your omnichannel fulfillment strategy.
