How Omnichannel Fulfillment Will Revolutionize the Future of Retail

If there is one thing the global pandemic made clear, retailers who can fulfill their customers’ desire to shop online and in-person will win –...



Darpan Seth

If there is one thing the global pandemic made clear, retailers who can fulfill their customers’ desire to shop online and in-person will win – whether that means shipments delivered to their home, in-store, or curbside pickup. In other words, retailers must embrace a true omnichannel fulfillment approach to meet customer needs, make better use of existing inventory and reduce shipping costs. The recent surge in eCommerce has overwhelmed retail supply chains and stretched aging distribution networks to the limit, leaving retailers struggling to increase network speed and boost flexibility while keeping costs down. Add to that online shoppers’ expectations of free two-to-three-day shipping and rapid pivot to shop elsewhere if products are unavailable or delivery times are too long, and it’s no wonder retailers are struggling.

Retailers are being forced to figure out new ways to expand their fulfillment capacity. Adding new warehouses isn’t the answer for many small or mid-sized companies since it requires additional capital and months to get set up, stocked, and ready for operations.

The pandemic has also exposed the problems with the current just-in-time but non-resilient supply chains. How many retailers have wondered if being able to fulfill orders from their existing store inventory, rather than only from their warehouses, could open up more options? How might such a revolutionary option increase their resilience and prevent out-of-stock shortages?

Challenges to Omnichannel Fulfillment

While some retailers use stores to supplement warehouse capacity, scaling this strategy can prove challenging. The reasons include:

  • Different store formats and limited assortment. Many retailers have multiple store formats and therefore lack the ability to have a uniform assortment set or a consistent fulfillment strategy across their store network. In addition, the products available for pickup and/or shipping are restricted to a single store at a time. As a result, it may be inconvenient for a pickup or too expensive to ship an order out of multiple locations.
  • Costly and constrained space. Real estate is at a premium in prime store locations. Finding enough space to set up fulfillment operations can be a real challenge, limiting fulfillment capacity.
  • Expensive labor. Labor typically costs a lot more in a store than in a warehouse setting. Stores are subject to a transient and often more expensive labor workforce than warehouses are.

To provide faster shipping and more pickup options, retailers have been forced to invest in adding fulfillment locations closer to where customers live. Amazon, Walmart, and Target have been investing in metro fulfillment hubs packed with automation. This strategy only works for larger retailers with much demand and who can invest at scale.

But what about the smaller retailers? The ones that cannot justify more investment in omnichannel fulfillment locations or putting more inventory closer to customers?

A new type of fulfillment option may be the answer – one focused on driving a better customer experience and more conversions while improving inventory utilization. An option that has the potential to alleviate fulfillment capacity constraints and reduce the number of miles traveled along with the overall cost of delivery. It’s called market-driven fulfillment.

What Is Market-Driven Fulfillment?

Market-driven fulfillment is a new approach to omnichannel fulfillment that connects a retailer's stores within a metro market to create a much more nimble and flexible fulfillment capacity than possible through eCommerce alone.

Using a retailer’s existing fulfillment network, market-driven fulfillment pools inventory from multiple stores, consolidating shipping into fewer packages and making any product available for pickup anywhere in that market.

Nextuple is pioneering this new approach with a software platform and logistics services that help solve retailers' supply chain and omnichannel fulfillment challenges to support customer-centric eCommerce solutions.

The solution combines:

  • A SaaS technology platform: The software platform allows each retailer to sell more online by connecting and pooling inventory across their stores in a given metro market.
  • Shared logistics: Shared in-market hubs and shuttles allow retailers to simplify fulfillment operations within each store. All they have to do is set aside the product they want to be moved from their stores to a centralized hub. Products received in the hub are sorted daily for subsequent shipping or pick up at a different store or access point locations, usually the next day.
  • Access points: Access points are being set up inside local convenience stores and other businesses to allow for easy in-town pickup by the customer (as an alternative to home delivery).

Nextuple’s SaaS-based technology platform creates a virtual inventory pool and can move inventory based on consumer demand by connecting a retailers’ network of local stores.

What Market-Driven Fulfillment Delivers
Using a market-driven fulfillment approach from Nextuple, retailers can easily:

  • Sell more of their available assortment online by pooling inventory across multiple stores
  • Make any product available anywhere in a metro market
  • Simplify in-store fulfillment operations and therefore increase capacity to fulfill from stores without investing more in creating new fulfillment centers
  • Ship more products from stores in fewer packages, reducing shipping complexity costs and improving sustainability.
  • Gain broader visibility and insight into product inventory and availability
  • Increase convenience and value to customers by offering faster pickup closer to their homes

Nextuple helps mid-market retailers reduce costs and increase efficiencies by making store-centric fulfillment a reality enabling them to compete with larger retailers such as Amazon.

 

Find Out More
Efficient fulfillment means fewer packages and miles traveled to get to a customer. At Nextuple, we’re on a mission to unleash the power of fulfillment networks to create a more sustainable future. Start your journey here if you’d like to learn more about market-driven fulfillment or how it can work for you.

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