Consumers are shopping in more locations than ever these days, with millions of purchases coming from multi-channel retailers. Now that online sales are no longer limited to an e-commerce website, how can retailers streamline their fulfillment processes to cope?
By Charles Brewer, CEO DHL eCommerce.
Multi-channel, omni-channel – what’s the difference? We bandy around these buzzwords but what do they really mean? Multi-channel and omni-channel might sound the same but they’re really two different things. “Multi” means “many” and “omni” means “all.”
Omni-channel provides a seamless shopping experience across brick-and-mortar stores and a variety of digital channels. It puts the consumer at the center and allows them to purchase from any of these interconnected channels. It also anticipates the consumer’s shopping preferences and prompts them along their ‘shopping journey’ to ensure a seamless experience for the consumer.
Multi-channel retailing also allows consumers to purchase products through various channels – from brick-and-mortar stores to websites and e-commerce platforms to social media. But instead of the consumer, it puts the product at the center, and provides consumers with many different – but separate – ways of interacting with it.
Multi-channel in action
How does it work exactly? Imagine you’re buying a new bike. You probably start by going to a bike shop website and checking what’s available in the price range you’re looking for. You want to receive further offers so you register and provide your email address and details. Then you decide to check various online marketplaces to see if the prices are better and if there’s more choice.
Many different channels, each with separate purchasing opportunities that give consumers a variety of ways to interact with a product.
Meanwhile on Facebook you’re now being served advertisements for the bike you’re interested in with the option to ‘buy now’ direct from the marketplace via social media. You also receive an email from the bike shop offering 20% off if you buy direct from their website. The bike store has an outlet only 15 minutes away from your office, so in your lunch break you take the bike for a test run. Back in the office you click on the link in the email and buy the model you’ve just tried out with a 20% discount.
That’s multi-channel in action: many different channels, each with separate purchasing opportunities that give consumers a variety of ways to interact with a product.
Consolidated fulfillment services
It looks pretty easy to the consumer, but it’s complicated for retailers and making sure it’s profitable is a challenge. Costs for delivery and returns can be high as many consumers expect same or next day delivery. There’s also a high level of complexity involved when it comes to fulfillment. Inventory can pile up in warehouses and is often required to be situated closer to demand.
There’s also a potentially high IT investment cost involved. Systems need to be in place to offer full visibility across channels and inventory locations such as stores and warehouses. These systems also need to be able to offer services like track and trace so consumers can see where their purchases are at all times.
The costs involved can be high, which makes outsourcing fulfilment a sensible decision for many small businesses. Our network of fulfillment centers provides a truly global solution, allowing retailers to serve consumers from anywhere in the world – quicker and more efficiently – by moving their inventory closer to the end consumer in our facilities strategically located in North America, Latin America, Asia, Oceania and Europe.
Our global fulfillment network enables retailers like Jamberry to focus on their core business beyond their current borders while we take the burden of logistics from their shoulders.
Take for example the services we offer in Mexico for popular global beauty brand, Jamberry. They’ve simplified their global expansion by utilizing DHL eCommerce’s consistent facilities, fulfillment processes, and system integrations across different geographies. Our global fulfillment network enables retailers like Jamberry to focus on their core business beyond their current borders while we take the burden of logistics from their shoulders.
The future is omni-
So, what’s the key to multi-channel success? Being able to adapt and change quickly according to consumers’ demands is important, such as allowing consumers to receive and return their orders at their preferred time and location. Global brands need fulfillment solutions that can adapt to their consumers’ needs without requiring hands-on intervention every time a change occurs.
But while multi-channel is very much in use today, retailers that want to be successful in the future are switching to omni-channel, although it’s not going to happen overnight. In PWC’s recent Total Retail Report, 30% of those surveyed said budget restraints held them back from providing omni-channel experiences for their customers; 21% had too many legacy systems to change; and 20% said it would be too difficult to integrate existing systems.
Whether it’s omni- or multi-channel, we’re helping our customers make it a success by offering them best-in-class fulfillment. Because it pays off for both sides. Studies show that the more channels consumers use, the more they spend: 4% more on average in store and 10% more online than single-channel consumers. And if consumers are buying, they’re keeping us busy – and that’s just the way we like it.
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