Retail Fulfillment Efficiencies

One of the benefits that can be realized in the omni channel retail market is improved efficiencies in fulfillment, both to the end customer and also the brick and mortar stores.  This was not one of the original objectives or probably even one of the original potential opportunity identified by retailers however the changing consumer demands in developing and omni channel marketplace provided this opportunity for retailers to flatten and standardize their fulfillment practices across channels to gain dramatic efficiencies.  These efficiencies will provide long term improvements in both the fulfillment costs and delivery efficiencies due to the expansion of fulfillment across the entire retail network of brick and mortar stores, distribution centers and supplier drop ship programs.

Retailers must take a broad view of options and opportunities in order to increase the fulfillment efficiencies and increase both services and savings.  Retailers must view the fulfillment demands not only across channels but also across delivery demands.  This requires a paradigm shift in how retail stores and distribution centers are viewed in the omni channel marketplace.  The fulfillment demands and comparisons between store replenishment and customer direct delivery are converging and this means that retailers must view the fulfillment not from a channel but from the process required to support the business and consumer fulfillment demands.  

The fulfillment demands require that retailers expand the functionality supported in brick and mortar stores to include direct to consumer fulfillment.  The fulfillment demands require that retailers finally revise their inventory view and management practices to support sales across all delivery methods from one pool of inventory.  Retailers can greatly improve their delivery service levels and transportation costs by expanding capabilities in the stores to include direct to consumer shipments from the store.  This simple practice will reduce overall transportation costs and service levels because the spectrum of zone one deliveries will expand as well to reduce the overall transportation costs.

These are not difficult changes, in fact these changes should be accepted and a recognition of the new reality that consumers are creating to support their own lifestyles.  Retailers now must view and identify methods to support consumer demands rather than attempting to bend consumers to the processes and methods that simplify the retailer’s practices.  Consumers will no longer accept limitations from retailers because there are too many options and competitors vying for sales.  Large retailers must change their fulfillment methods to meet these demands and the resulting changes can be implemented to improve both inventory management  and also improve fulfillment efficiencies and costs.   

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?