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Multi-channel versus Omni-channel Retail: What’s the Difference?

When online shopping, customers have the luxury of placing small, frequent orders, and they can demand shipments be delivered with Amazon-like speed directly to their doorsteps, workplaces, or other convenient pickup locations. And as choice in retail continues to grow, customer loyalty is harder to secure. On-time delivery to the customer’s destination of choice can make or break an opportunity for repeat business, and retailers are increasingly dismayed to discover that one delivery delay can lead customers to purchase from another online merchant.

As merchants strive to meet customers’ exacting expectations, endlessly chasing Amazon’s same-day/next-day delivery model, many deploy either a multi-channel or omni-channel distribution strategy to optimize success.  Here we explore how the two models vary when it comes to customer experience, and how they’re vastly different when it comes to back-end operations, from warehouse fulfillment centers to shipping delivery timelines.

What is multi-channel retail?

Multi-channel retail centers around the product, placing it in places of prominence, both physical and online, to create more sales opportunities. The assumption is customers will choose the channel that best meets their needs.

The upside?  The customer has multiple channels by which to discover and purchase their product, and the retailer has many sales channels at their disposal. The downside?  In a multi-channel strategy, all channels may be available, but not all are integrated. Each sales channel is often managed as an independent silo, from order processing to fulfillment and shipping. The customer has separate purchase opportunities, but lacks a seamless purchasing and shipping experience.  For example, buying online and picking up in the store is difficult for a retailer to execute and may not be available to customers.

What is omni-channel retail?

In an omni-channel retail model, the customer experience and brand equity are front and center. The goal is to leverage various sales channels to formulate a seamless purchasing and shipping experience for the customer.  In other words, the omni-channel model accounts for the entire purchasing process, from the customer first discovering the product… to ordering the product… to receiving the product, with fluid movement between sales channels. A customer can easily order a product online and pick it up in the store… or purchase the product in the store and deliver it to their home… or order it from one store and pick it up in another. Warehousing, order, and delivery data are synchronized between each channel, providing the retailer with full transparency into inventory and into how the order moves through the retailer’s fulfillment and shipping processes.

The Impact on Order Fulfillment & Shipping

The warehouse process, while not visible to the buyer, plays a major role in the customer experience. Every shipment is a key point for customer engagement, and the fulfillment process can make or break the experience. Failure to fulfill an order accurately and/or deliver it on time where promised, and all bets are off.

Multi-channel Fulfillment

In the multi-channel model, product fulfillment and shipping are carried out separately through each channel. These siloed processes can increase time and costs; in fact, order data in one channel often doesn’t reach other sales channels, causing the retailer to miss cost-saving order consolidation and streamlined shipping opportunities.

Omni-channel Fulfillment

The omni-channel model offers a more flexible fulfillment and shipping experience for both the merchant and the customer. By leaning on a variety of order completion strategies, omni-channel fulfillment allows the retailer to choose the shipping and fulfillment option that makes the most sense for each order.  For example, the merchant can fulfill an order directly from a store… or from a distribution center… or by moving inventory from a distribution center to a store and then fulfilling the order from the store. In doing so, the merchant is better positioned to meet customer expectations for delivery timelines and accuracy.

With the right omni-channel strategy in place, retailers can establish an approach that improves customer service and profitability. Plus, by centralizing all product data in one database, the retailer can offer more flexibility, choice, and accuracy in the shopping experience.  Stock-outs are less likely to occur, and customers can receive real-time information regarding a product’s availability at a designated location.

Omni-channel Strategy is the Key to Streamlined Operations

Today, one of the keys to success for modern retailers is the ability to achieve cost-effective parcel shipping while meeting stringent delivery demands.  Without an omni-channel strategy in place, this becomes difficult and the customer experience can suffer.

It’s time to improve the experience for all of your customers by implementing an omni-channel retail and fulfillment strategy that connects sales channels, payment methods, fulfillment, and shipping.

Need assistance implementing or modernizing your retail omni-channel fulfillment strategy?  Get in touch with a Logistyx expert today.

Coronavirus Supply Chain Preparation for Retailers: Advice from Ken Fleming in Women’s Wear Daily

No matter what you ship, staying proactive to mitigate the impacts of the coronavirus on your supply chain is non-negotiable. Of course, that’s easier said than done, especially for global retailers running into capacity and mobility issues.

As a partial antidote to this spreading concern, check out this article by Women’s Wear Daily featuring in-depth perspectives from industry experts, including Logistyx President Ken Fleming, on creating a contingency plan to diminish the effects of the coronavirus outbreak on supply chains.

Ken suggests leveraging data and technology to automate processes and identify opportunities to execute optimal parcel delivery strategies, including multi-modal solutions and inventory reallocation. Keeping a flexible, informed approach is key as the virus’ impact continues to take shape.

Is your supply chain prepared to handle the global impacts of the coronavirus outbreak?

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Logistyx Improves Store Inventory and Fulfillment

Men’s Wearhouse ships from 1,800 stores and multiple distribution centers to domestic and international destinations.

Business Challenge

The drive to meet consumer demand, balance inventory and optimize fulfillment has pushed e-Commerce delivery from distribution centers to stores. While theoretically advantageous, store-level shipping presents a number of significant challenges: carrier selection is limited, services aren’t supported and rate shopping is near impossible.

Solution

Logistyx solves this problem with Logistyx Transportation Management Execution ™ (TME), a solution that provides stores with instant access to carriers and services that offer the best rates for each particular location. Seamlessly integrated with Manhattan’s Store Inventory and Fulfillment (SI&F) system, the solution supports multi-carrier rate shopping, shipment execution and label generation with accurate charge data, realtime shipment tracking and proof of delivery.

 

Logistyx TMS for Parcel Doubles Shipping Throughput

Lightbulbs.com easily transitions from six shipping stations to two, despite doubling e-commerce shipping volumes.

Service Lighting and their online superstore, LightBulbs.com, have provided lighting solutions for more than 1 million businesses and homes since 1951. When Paul McLellan, President, launched the company’s online store in 1996, he knew that technology was going to drive the growth of their company. Now, their ecommerce site brings in 80% of their business.

Business Challenge

LightBulbs.com had six shipping workstations, all with standalone, carrier-provided shipping software. The shipping process was cumbersome.

Solution

LightBulbs.com was able to go from six shipping workstations to two stations, combining the Logistyx parcel shipping software, Rice Lake iDim 3D Dimensioning systems and two Size-IT mobile dimensioning calculators.They gained tremendous efficiency. When sales doubled in their peak season, they were able to handle all of the shipping volume on the two shipping workstations without adding staff.

Online Retailer Ramps Up Holiday Shipping with Logistyx

Legendary Whitetails achieves 99% order fulfillment accuracy and reduces package costs by 10%.

Legendary Whitetails, an online retailer of affordable fashion clothing, has grown 25% to 30% year over year since 1999. During peak season, order volumes ramp up from 100 orders to 8,000 orders a day.



 

Challenge

Legendary Whitetails had completely outgrown its parcel shipping system and could not keep up with sales growth. The company selected Logistyx Technologies’ Pack-IT order fulfillment and Ship-IT multi-carrier shipping software to be integrated with its MICROS-Retail order management system.

Results

  •         Improved order fulfillment accuracy to 99.9%
  •         Increased flexibility and visibility by eliminating manual processes
  •         Reduced training time from hours to minutes
  •         Instantly strengthened negotiations with carriers
  •         Reduced per package costs by 5-10%

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Logistyx Helps McDavid Serve Up First Class Customer Service

McDavid eliminates bottlenecks in order packing/shipping lines and achieves 100% compliance with retail service requirements.

McDavid manufactures and distributes sports medicine equipment and performance wear for athletics. The company sells its products through multiple sales channels including “big box” retailers such as Sports Authority, “team” sales channel to professional, college and high school teams, a “team dealer” channel supporting trainers and trainer supply groups and via their website www.mcdavidusa.com.

Business Challenge

McDavid must efficiently manage shipping to retailers and mass merchants, including customer-specific UCC labeling, the electronic transmission of advance ship notices (ASNs) to customers, and labeling and packing its products in certain ways. The failure to comply to these complex requirements can result in significant fines. So, the company faced a serious challenge when its existing parcel shipping system vendor went out of business.

Solution

After doing its due diligence on four vendors, the company chose Logistyx and implemented its Pack-IT, Stage-IT and Ship-IT™ solutions, complete with Zebra printers and mobile computers to further streamline order packing. Not only did the Logistyx system go ‘live’ right on time, but it delivered several significant enhancements for McDavid’s order fulfillment workflow.

Results

  • Eliminated errors in order fulfillment process
  • Gained 100% compliance with retail service requirements
  • Eliminated bottlenecks in order packing/shipping lines
  • Eliminated manual processes to enhance productivity