View original at www.dcvelocity.com
Retailers strive to meet customer expectations in the age of Amazon without breaking the bank on omnichannel fulfillment. It’s a rare retailer these days that relies on a single channel to generate sales. By now, many, if not most, have embraced the omnichannel model, selling everything from groceries to consumer goods to apparel via brick-and-mortar stores, websites, and catalogs and call centers. But in the rush to meet customer demand for swift delivery, some retailers forget about their own bottom lines. "People are shooting themselves in the foot because they’re so eager to sell the product. They think they have to keep up with Amazon to the point where they erode their profit," said Zach Zalowitz, practice lead for omnichannel supply chain at the Boulder, Colo., consulting firm SCApath LLC. Many retailers like the idea of fulfilling online orders from their brick-and-mortar stores but are dismayed to find the practice can be very expensive. "The second you start fulfilling from more than one store for the same order, your profitability is shot, because there are twice as many hands touching it, twice as many boxes to pack, twice as many internal invoices to track," Zalowitz said. While customers may love it, there’s no denying that omnichannel is expensive. Whether a retailer is mailing online orders from retail storefronts, arranging to have orders drop-shipped directly from suppliers, or holding online orders in stores for pickup, those services cost money to provide. Converting a conventional retail operation to an omnichannel one can require investments in new software or material handling equipment, corporate realignment, specialized consultants, changes in transportation routes, DC redesigns, and retraining for store staff. The pain is real: Many retailers are seeking to offset their rising fulfillment costs by raising prices elsewhere in their operations, according to a recent […]
Leave a Reply
You must be logged in to post a comment.