Retailers and their warehouses have had to dramatically change how they fulfill orders over the past decade to meet the fast-shifting demands of shoppers. From the first time they search for a product to aftercare, today’s consumers want a smooth experience with businesses, and up to 75% now expect consistency across all channels. With the growth of e-commerce and the number of ways to sell products, meeting buyers’ expectations has become a challenge for brands of all sizes.
Omnichannel retail requires a major rethink of how to guarantee customer satisfaction and brand loyalty. Forged by innovators like Target and Walmart, it is the next big step for brands to grow their sales while providing a seamless and consistent customer experience.
What Is Omnichannel Fulfillment?
Order selection, packing, and shipping for sales across storefronts, sales channels, and online marketplaces is known as omnichannel fulfillment. It requires data synchronization to enable a single source of truth for orders and inventory. In contrast to completing orders from a single store, an omnichannel fulfillment strategy must be able to distribute inventory among several stores and warehouses to ensure products aren’t over- or under-accounted for to avoid overstocking and overselling.
Let’s see how that works through a real example. Suppose you buy a jacket online, say from Target. You have two options: pick it up at the local store the same day or have it delivered. You choose the ‘pick up in store option’ to save time and shipping fees.
Target’s system keeps track of inventory in real time, so stock is always accurate across all channels. That means the system will immediately update the inventory to show the item is no longer available, so no one else can buy it until your order is completed. After that, the system will alert your designated store, and a staff member will get the jacket ready for pickup.
Next, you’ll get an email confirming your order is prepared for pickup. You go to the store at a time convenient for you and end up buying more products while you’re there (statistics show that this is true for 47% of the customers). If you need to return it, you can do so in-store and by mail.
Simply put, omnichannel fulfillment connects all the ways customers shop into one system, making it easier for businesses to deliver what customers want, as well as when and where they want it.
What’s the Difference Between Multi-Channel and Omnichannel Fulfillment?
Both omnichannel and multi-channel fulfillment are sales strategies through multiple channels. The main differences between the two are how they manage the integration of different sales channels and their focus. Omnichannel unifies everything, including distribution and customer support, and significantly emphasizes customer-centricity. Multi-channel fulfillment uses distinct order fulfillment and inventory control operations for each channel; channels may or may not be connected. Here are the most important elements of each approach.
Omnichannel
- Retailers use systems and technology to synchronize customer data, order processing, and inventory levels across all channels and locations.
- Customers move between sales channels during their buying experience.
- It puts the consumer’s convenience first and seeks to develop a comprehensive brand experience.
Multi-channel
- Selling products and services goes through many channels, each functioning independently, which may lead to information not always flowing smoothly across them.
- When customers move between channels, their experiences may differ.
- It emphasizes expanding the brand’s reach through many sales channels over offering a fully cohesive experience.
Why Omnichannel Fulfillment Matters
In a world that’s more connected than ever, customers demand more than just an excellent product—they expect flexibility and convenience. Here’s why omnichannel fulfillment matters for modern business.
Enhanced Customer Satisfaction
This strategy increases customer satisfaction by offering an adaptable purchasing experience. When you give your clientele the freedom to pick where and how they wish to shop, you please them. And pleased customers are loyal customers.
Higher Revenue and Sales
A seamless shopping experience across fulfillment choices boosts sales, as convenient options increase the likelihood that a customer will finish a purchase.
Improved Inventory Use
Businesses can minimize the expenses related to excess inventory and stockouts by optimizing their stock levels with an integrated inventory management system, driving profitability.
Competitive Edge
By providing better customer experiences, companies using omnichannel fulfillment can set themselves apart from competitors, which can be essential in drawing in and keeping customers.
Challenges of Omnichannel Fulfillment
Despite its many benefits, omnichannel fulfillment can be difficult to execute. Here are the most common challenges businesses face.
Keeping Accurate Inventory Counts
When selling identical products across multiple channels, resist the temptation to count the same physical items multiple times in your inventory. Instead, use a reliable inventory management system that provides real-time data to maintain accurate counts. This prevents both overstocking and unnecessary reordering, keeping your inventory levels optimized.
Safety Stock Implementation
Implementing safety stock, which is additional inventory kept in reserve to prevent stockouts, is crucial for retailers facing inventory tracking challenges. In-store inventory counts are often inaccurate because items may be misplaced by shoppers, damaged while on display, or stolen. By deliberately showing fewer available items in your system than physically present, you create this buffer that reduces stockouts, prevents order cancellations, and keeps customers satisfied.
Using an Outdated Technology
Using outdated methods like manual or paper-based inventory tracking is a leading cause of inventory inaccuracy. These approaches are time-consuming and error-prone, making them virtually impossible to maintain in modern omnichannel fulfillment operations.
Handling the Supply Chain
You can’t sell what you can’t find or don’t know you have. That’s why handling the supply chain efficiently is substantial in omnichannel logistics. Keeping track of where all your products are–whether in your warehouse, in stores, or already on their way to customers–is critical yet challenging at any given time. But it gets harder during busy times like holidays or big sales, when warehouses and delivery systems work at full speed. If a business doesn’t have clear visibility into its supply chain, it can lead to delays, missed orders, or unhappy customers.
7 Strategies for Omnichannel Fulfillment
Successful omnichannel fulfillment requires both technological solutions and strategic operational changes to coordinate inventory, shipping, and customer service across multiple platforms. Here are seven solutions to consider.
Unified Inventory System
Using one centralized inventory management system across all channels ensures accurate stock information, no matter where customers shop—online, in-store, or marketplace. You can prevent overselling and disappointing customers by using AI-powered WMS tools such as Da Vinci’s to make inventory levels visible in real-time and automatically synchronize data across all channels.
Flexible Delivery Options
Another strategy is to give your customers choices in how they like to receive products. Because each option uses your inventory differently, smart AI systems can determine the most cost-effective fulfillment method for each order while meeting customer expectations. Here are some suggestions:
- Buy online, pick up in-store (BOPIS).
- Ship from the nearest store or warehouse.
- Home delivery with various speed options.
- Reserve online, try in-store.
Stores as Fulfillment Centers
The ‘ship-from-store strategy’ allows you to use physical stores to ship online orders. It speeds up delivery while reducing shipping costs. AI-powered WMS can decide if it’s better to fulfill orders from a store or warehouse based on the data provided on inventory levels and how far your customers are from them.
Automated Order Routing
Like the previous strategy, you can let the warehouse management system choose the best location to complete each order based on real-time data about inventory, shipping distance, and costs. This will reduce errors and save time, ensuring a faster delivery.
Connect to Marketplaces
A reliable WMS can update inventory automatically across all channels. If you integrate it with platforms such as Amazon, eBay, or Walmart, you won’t have to track sales manually (and risk overselling with it).
Provide Real-Time Tracking
With real-time tracking, you can show your staff and customers their orders at any given moment—whether they are in a warehouse, store, or on their way to be delivered. By keeping everyone informed, you’ll build trust and avoid misunderstandings.
Use Data to Improve
The latest market analyses show that the modern consumer expects transparency from brands more than ever before. Using analytics tools, you can track different metrics, such as delivery speed, order accuracy, and costs. You can, then, use the data to improve your brand image by fixing issues, predicting future demands, and making smarter moves for faster and more efficient fulfillment.
How to Implement an Omnichannel Fulfillment Strategy
Having these strategies in mind, you can think about how to come up with your own implementation of omnichannel fulfillment suitable for your business. To do that successfully, you must first identify and define your ideal customer profile (ICP). Then comes choosing the right channels to reach them and enhance your online presence there. Once you do that, you can follow this step-by-step guide for easy implementation of an effective omnichannel strategy.
Integrate Inventory Management Systems
You’ll need a centralized inventory system that connects all sales channels. This all-in-one solution, Da Vinci’s WMS, has 50+ advanced features. For example, it ensures real-time stock visibility, prevents the sale of products that are no longer in stock, and improves efficiency across warehouses, stores, and online platforms.
Automate Order Processing
Automated order routing determines stock availability and customer proximity, then confirms that orders are completed from the optimal area and minimizes shipping times and expenses.
Synchronize Online and Offline Operations
The third step is to ensure smooth communication between warehouses, physical stores, and e-commerce platforms with real-time updates that sync inventory, orders, and shipments.
Train Staff for Omnichannel Orders
Train your staff on the online order, pick-up in-store, and return process. Collaborating with them via the interface of your chosen WMS increases order accuracy and enables fulfillment efficiency.
Use Analytics for Demand Forecasting
Advanced reporting and analytics forecast sales trends and prevent stock shortages and stockouts.
Enhance Last-Mile Logistics
Partner with reliable carriers or local delivery networks to reduce delivery time. Da Vinci WMS, for example, has shipping integrations that support last-mile logistics by determining the most suitable carrier for each order.
Monitor Performance and Optimize
Use performance metrics to track trends such as order fulfilment speed, accuracy, and return rates via WMS performance tracking tools. Analytics regularly contribute to adjusting processes according to shifting customer needs.
Enhance Your Omnichannel Fulfillment Strategy with Da Vinci
Efficient omnichannel fulfillment starts with the right technology. By integrating all sales channels into a centralized inventory system, businesses can achieve real-time stock visibility, prevent overselling, and enhance order accuracy. With Da Vinci’s WMS, automate order processing, synchronize online and offline operations, and adapt to customer demands, ensuring long-term efficiency and business growth. Are you interested in elevating your company’s fulfillment strategy? Request a demo today.