A Look Ahead at Omnichannel Fulfillment
Carlos Castelan shares an article that looks forward at how omnichannel fulfillment continues to be an imperative for retailers.
Omnichannel fulfillment remains an imperative for retailers that are aiming to pick up market share in the coming years. Much has been made of consumers’ return to in-person shopping post-pandemic, but digital sales remain higher across retail than had been projected prior to 2020.
Delivering a consistent digital customer experience is critical for retailers to increase market share in a competitive environment where customers prioritize speed and convenience.
In high-frequency categories – such as grocery – reliable and cost-effective order fulfillment is foundational to winning with omnichannel customers, a high value segment. We often see omnichannel customers outspend strictly brick-and-mortar shoppers by almost 35-50% in the grocery channel.
In more discretionary, lower-frequency categories – such as apparel and luxury – a shift to faster service speeds to meet changing customer expectations is slowly underway.
Historically, this segment of retail has not felt the same urgency to increase order service speeds; but as customer expectations change and retailers pursue growth in a more challenging environment, there will be greater emphasis on fulfillment operations to increase sales.
With so many changes afoot, what might we see as it relates to retail fulfillment operations in the coming year or two?
Picking: High frequency retailers will pursue more automation solutions at order fulfillment sites
A consistent theme across retailers has been wage investment to recruit and retain store associates amidst a tight labor market with no relief in sight. Retailers, from Walmart to Kroger to Home Depot, have announced large-scale increases across their store employee base.
As a result of the labor market shortage – and related investments – the picking portion of the omnichannel fulfillment equation has increased for retailers.
So, how will they react?
As digital orders increase – along with wages – automation has been deployed to lower the cost to service each order.
For retailers with a high volume of orders and SKUs – such as grocers and general merchandise –fulfillment automation at locations with high digital order penetration (digital orders as a percentage of the store’s total sales) may be inevitable.
Key points include:
- Retailers with a high volume
- Retailers with lower volumes
- Delivery: Consolidation of same-day last-mile delivery
Read the full article, Omnichannel Fulfillment: Crystal Ball Edition, onTheNavioGroup.com.