By Ken Fleming, Eyefreight
In an era where Amazon’s two-day shipping reigns, customer demand has skyrocketed, and expectations for rapid order fulfillment have put retailers on the defense, there’s never been a better time to be a consumer. With countless options for purchase and fulfillment, retailers who have long sought more efficient ways to distribute goods are turning to cloud-based transportation management systems (TMS) to more easily offer a complete omnichannel fulfillment strategy.
According to the ARC Advisory Group, e-Commerce has grown 51% over the past five years. Unfortunately, the same ARC survey showed that just 60% of respondents currently use a TMS for omnichannel fulfillment, representing a large number of retailers being bogged down by time-consuming manual processes that make omnichannel fulfillment far more difficult, and likely reducing customer satisfaction and losing business as a result.
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Omnichannel distribution introduces a number of logistical scenarios:
- Online order directly to buyers’ homes;
- Online order sent to retail store for in-store pickup;
- In-store purchase, out-of-stock “rain-check” — delivery to store or directly to buyers’ homes;
- Online order through e-Commerce distributor channel (i.e. Amazon); and
- Order fulfilled directly to buyer’s home via a retailer or a vendor’s logistics infrastructure.
This list doesn’t even touch on returns and exchanges; so it’s hard to understand how any omnichannel retailer would still consider using spreadsheets to track and manage all these moving pieces.
Increasingly, retailers turn to a TMS (a Level 5 TMS if they do business internationally) to manage a growing list of complex and time-consuming distribution challenges. Differing rules, workflows and technology must work together seamlessly to successfully distribute in an omnichannel fashion, with the entire process breaking down if one link in the chain is weak. Every warehouse, distribution center and retail location must become a component of a single, tightly integrated inventory.
For consumers, an omnichannel option like in-store pickup is invaluable. In a recent study, Forrester Research found that 42% of online shoppers have used click-and-collect. Unfortunately evident over the holiday season, a full 60% of “click-and-collect” orders placed on Cyber Monday ran into problems like lack of inventory in the store or incorrect item supplied at the pickup counter — key visibility issues that throw a wrench into any omnichannel distribution strategy.
Fortunately, retailers increasingly use automated cloud technology to determine the most efficient distribution, by introducing visibility into inventory status and item location. This provides a more complete picture of the supply chain and answers the bell when retailers ask, “Should I ship from the warehouse 300 miles away, or locate my customer and let them know their item is on the shelf 10 miles away?”
Ultimately, the execution of a solid omnichannel strategy through a TMS comes down to a retailer’s readiness upon implementation — making a thorough assessment of who, what, where, why and how logistics are managed today. When executed poorly, customers take their business elsewhere.
As e-Commerce continues its breakneck growth and the likes of Amazon keep pushing the boundaries of fulfillment, a TMS provides a lifeline for retailers who want to compete.
Ken Fleming is CEO at Eyefreight, a provider of transportation management system technology. Since the mid-1990s, Fleming has led the successful launches of many new technologies and services, including supply chain management, e-Commerce, SaaS and enterprise software and systems integration solutions. As CEO, Fleming manages Eyefreight to ensure it meets strategic, operational and revenue goals while holding true to the company’s tenets of innovation, customer service and sustainability. Since joining Eyefreight, he has helped grow revenues 10-fold. Ken can be reached at [email protected].