What is an Omnichannel Supply Chain?

An omnichannel supply chain uses a centralized inventory pool to fulfill retail product orders. Some retailers use integrated supply chains to ship products for their B2B, in-store, e-commerce, telephone and catalog orders. The centralized inventory pool is the key to this supply chain technique that is a fully integrated, end-to-end logistical solution.

Retail Supply Chains

The secret to the success of many of the biggest retail names in the country, such as IKEA, Costco and Wal-Mart, is that they offer all-inclusive delivery and fulfillment options. They provide customers with a wide range of seamless shipping and hassle-free shopping experiences through the power of integrated supply chains. The word omnichannel means that customers are empowered to select how their purchase will be sent to them through the same centralized supply chain. In order to successfully implement this supply chain, retailers must meet and exceed customer expectations by offering enhanced order processing, fulfillment, pickup and return support.

Changing Consumer Dynamics

The most popular logistical channels are ship-to-home and in-store pickup through online retailer websites. This means that the retailer’s supply chain must provide customers with access to inventory anytime, anywhere. Many small retailers are facing the financial and operational challenges of providing universal inventory access, product shipping and purchase fulfillment. Contemporary customers demand the flexibility that allows them to receive a product at home, but return the product in the store for face-to-face customers. Omnichannel supply chain management focuses on providing a personalized experience that takes into account each customer’s particular selection likes, purchasing dislikes, shipping needs and return preferences.

The Pros of Omnichannels

The consumer is at the center of integrated and all-inclusive supply chains, so this produces certain benefits and drawbacks. It creates seamless interactions between customers and retailers that often result in lifelong customers. Omnichannels mean higher demand for popular items, so warehouses can achieve better prices through better stock management. Customer experiences of the brand are enhanced by consistent shopping interactions. From a sales view and marketing perspective, the customer’s purchase journey and brand experience become favorable PR points. The supply chain becomes a value-added benefit that transforms static warehouses and distribution centers to customer service departments.

The Cons of Omnichannels

Omnichannel logistics require increased stock accuracy and visibility in order to ensure that orders are fulfilled in the most efficient and cost effective ways. It increases operational strain in order to guarantee purchases are shipped on-time at the desired location. When it comes to returns, a product that was picked up at a store may be returned by the customer through a local post office. They can create a logistical nightmare for warehouses to sort, categorize and process returned items. Integrated supply chain information systems are complex because they combine eCommerce platforms, store inventory tracking systems and customer relationship management data together. They may not interface well with outdated manufacturing, warehouse management and inventory tracking systems.

Overall, an omnichannel supply chain cements business partnerships between retailers and suppliers, increases the level of accurate product information and drastically improves the competitiveness of retailers. Retailers prefer these supply chains because they provide comprehensive support and accurate overviews of stock levels.