Omnichannel eCommerce Explained. Part III: Building an Omnichannel Fulfillment Strategy for Growing Businesses

The modern customer expects a seamless shopping experience across multiple channels. And while you might not be able to provide exactly that right now, if your business keeps growing you’ll soon need to catch up. How? With an omnichannel fulfillment strategy. 

It might be hard to believe that your business could ever become big enough to need an effective omnichannel fulfillment solution, but it probably will one day. So, it’s imperative that you know how to craft such a strategy in preparation for rapid growth.

We’ll walk you through all the steps—from assessing your operations today to the installation of technology to make that experience consistent as your business grows and scales. Let’s jump in.

Understanding Omnichannel Fulfillment

Omnichannel fulfillment identifies and coordinates your inventory, sales, and distribution across all channels to provide the same experience for your customers regardless of how they engage with your brand—online, in-store, or via a marketplace. They’ll always have access to the same products, pricing, and support.

Global adoption of omnichannel strategies has improved over the years and looks set to continue that way, with more than 42% of brands saying that an omnichannel strategy is ‘critical’ to their business.

Image sourced from statista.com

The key benefits of implementing an omnichannel fulfillment strategy include:

1. Enhanced stock management: A unified inventory management system helps you make sure you have the right products in the right place at the right time, so you always avoid stockouts and overstocking.
2. Increased sales and revenue: Since an omnichannel fulfillment solution allows you to reach more customers through more channels, you should see an increase in sales and revenue.
3. Better data collection and analysis: Integrating your sales and inventory data across the various channels helps you get a more informed view of customers’ buying behavior and preferences, shaping business decisions.
4. Increased customer satisfaction: By offering a consistent and convenient shopping experience, you can meet and exceed customer expectations, leading to higher satisfaction and loyalty. 

Image created by author. Data sourced from business2community.com

How to Build an Omnichannel Fulfillment Strategy for Growing Businesses

Now that you understand the fundamentals of omnichannel fulfillment, let’s explore the step-by-step process of creating a scalable strategy for your growing business.

Step #1. Evaluate your current operations

The first step in building your omnichannel fulfillment strategy is to figure out your current operations. This involves taking stock of your existing sales channels, inventory management processes, and fulfillment capabilities.

First, determine all channels you currently sell through: is it your website, do you have a physical storefront, or are you selling through a third-party marketplace? Analyze each channel’s performance based on sales volume, customer engagement, and fulfillment efficiency.

Next, evaluate your inventory management system. Ask yourself questions such as:

• How do you track inventory levels across different channels?
• Are you able to accurately forecast demand and adjust stock levels accordingly?
• Do you have a centralized system that provides real-time visibility into your inventory?

Assess your current inventory management and determine if processes need improvement or if a more sophisticated solution is required. 

Lastly, look at your fulfillment processes—from orders and packaging to shipping and returns—and consider the following questions:

• How quickly can you process and ship orders from each channel?
• Do you have a clear returns policy and process in place?
• Are you able to efficiently handle peak periods, such as holidays or sales events?

This may seem obvious, but taking the time to evaluate your current operations will boost your confidence in your omnichannel fulfillment strategy going forward.

Step #2. Develop your omnichannel strategy

With your baseline established, it’s time to create your omnichannel strategy: setting goals, mapping out the areas where integration needs to be a high priority, and defining your roadmap for implementation.

Start by defining your objectives for omnichannel fulfillment. These may include:

• Improving customer satisfaction and loyalty
• Increasing sales and revenue across channels
• Streamlining inventory management and fulfillment processes
• Enhancing data collection and analysis capabilities

Once these are established, define the priority areas where you need to integrate your operations. This may include:

• Consolidating inventory data across channels for real-time visibility
• Implementing a centralized order management system to streamline fulfillment
• Integrating your e-commerce platform with your in-store POS system
• Developing a consistent branding and customer experience across channels

ERP (Enterprise Resource Planning) systems, which offer unified management of inventory, orders, and customer data across your entire business, can be a helpful tool for organizational integration.

Finally, establish a detailed roadmap for your omnichannel strategy. Divide and conquer: break your transformation into phases and key components, then assign budgets and timelines for each step. Make sure all the team members, from sales to marketing, operations to IT, are kept up to speed.

You should always keep the customer in mind as you develop your strategy. Consider how omnichannel fulfillment can provide a frictionless, personalized experience for your customers across all their touchpoints, from discovery and purchase to delivery and returns.

Step #3. Implement technology solutions

You need the right technology solutions for a comprehensive and real-time view of your omnichannel fulfillment strategy. These tools will help you integrate your operations, automate processes, and gain real-time visibility into your inventory and sales data.

When selecting your technology solutions, look for providers that can offer easy integration and allow for scalability as your business grows.

Inventory management software will be a crucial part of your tech stack. Look for a system with the following characteristics: 

• Real-time inventory tracking across channels
• Automated reorder points and purchase orders
• Integration with your e-commerce platform and POS system
• Barcode scanning and mobile inventory management capabilities

Another key tool to consider is an order management system (OMS). An OMS can help you manage your order fulfillment by:

• Consolidating orders from multiple channels into a single interface
• Automatically routing orders to the nearest fulfillment center or store
• Providing real-time order status updates to customers
• Enabling seamless returns and exchanges across channels

In addition to inventory and order management systems, consider implementing tools including:

• Warehouse management and picking optimization
• Shipping costs and logistics management
• Customer relationship management (CRM) and marketing automation
• Business intelligence and analytics
• Route optimization software

Step #4. Manage and scale your strategy

Once you’ve implemented your omnichannel fulfillment strategy and the necessary technology solutions, it’s essential to continuously manage and optimize your operations. That means constantly watching your key performance indicators (KPIs), identifying areas for improvement, and adapting as markets shift and customer habits change.

Some important KPIs to track include:

• Order accuracy and on-time delivery rates
• Inventory turnover and stockout frequency
• Average order value and cart abandonment rates
• Customer satisfaction and retention rates

As your business grows, it’s also crucial to scale your omnichannel fulfillment strategy accordingly. This may involve expanding your fulfillment network by enlisting the help of third-party logistics (3PL) providers or opening new distribution centers in strategic locations. 

You may also need to upgrade your technology infrastructure to continue processing complex orders efficiently at larger volumes.

As you scale, don’t neglect the customer experience. Use survey feedback and data analytics to make sure your omnichannel fulfillment strategy meets or exceeds customer expectations.

By keeping the customer front and center, you’ll set your business up for long-term success as you continue to anticipate and accommodate their growing needs.

Some Common Challenges and How to Avoid Them

Here are some of the most common challenges with an omnichannel fulfillment strategy and, just as important, what solutions you can adopt to circumvent them.

Data silos and inconsistencies

One of the primary issues you might face with omnichannel fulfillment is that your channels and systems have not been set up to work with the same accurate, up-to-date data. 

Any discrepancies (in inventory levels, price, between customer profiles, etc.) will lead to customers getting the wrong information, stockouts, overselling, and, ultimately, an unsatisfactory customer experience.

You can prevent this by investing in a new ERP implementation that brings together inventory, finance, and CRM and provides a shared view of data across the company that guarantees accuracy and integrity.

Poor inventory management

This can lead to stockouts, overstocking, and high carrying costs. To avoid these issues, implement a robust inventory management system that provides real-time visibility into your stock levels across all channels. 

For example, you can use ABC analysis, safety stock calculations, and other methods to determine how many items you should carry and how much you should stock up on.

Lack of real-time visibility

If you can’t track your inventory, orders, and shipments in near real-time, you’ll be left to guess what’s happening or dive into reports to try to answer key questions. 

With poor visibility, it will be hard to make good decisions, and you won’t be able to react quickly to evolving demand and supply chain operations. 

Adopt technology-based solutions such as Internet of Things (IoT) sensors, radio-frequency identification (RFID) tags, and GPS-enabled fleet management systems, to collect real-time location data, especially if you operate across different countries.

Poor communication and collaboration

Omnichannel fulfillment tends to require close coordination and collaboration across several teams and departments, such as sales, marketing, operations, and logistics teams. Poor communication and lack of coordination inevitably lead to delays, errors, and inconsistent customer experiences.

Effective collaboration requires establishing clear processes and communication pathways, such as regular cross-functional stand-ups, shared dashboards, and project-management collaboration tools. This helps you instill a culture of openness, accountability, and continuous improvement.

It also becomes particularly crucial if you employ a global team working remotely from a range of different locations.

If you anticipate these common problems at the beginning, your omnichannel fulfillment strategy is more likely to succeed while avoiding costly mistakes. 

Final thoughts

An omnichannel fulfillment strategy is crucial to the growth of your business. By identifying your current processes and putting together an overall strategy, you can create a fluid, satisfying experience for all channels of communication with your customers. 

Remember, omnichannel fulfillment is a journey, not a destination. If you stay agile and customer-centric, there’s no telling how much you can achieve.

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