Designing an Organization with an Omni-Channel World in Mind

Significant new demands are being placed on retailers’ supply chains. In omni-channel fulfillment, all the resources of the supply chain are focused on transparently serving a single shopper who places a single order. Many retailers may be able to meet omni-channel fulfillment challenges by retrofitting existing operations, or adding new processes and technology. However, very few existing distribution centers of more than a few years old are set up to accommodate the needs of an omni-channel distribution strategy. Omni-channel retailing is steadily growing in size in the market, especially from the e-commerce segment. According to a study performed by Forrester and published by eMarketer.com, U.S. retail e-commerce sales are expected to reach $362 billion by 2016 and will continue to grow at a double-digit rate. By 2015, the number of online shoppers will exceed 200 million in the U.S., representing over 90 percent of all Internet users. Not only is the number of shoppers increasing, the amount spent by each shopper annually is also expected to increase from $1,207 in 2012 to $1,738 by 2016. Retailers who want to compete in the omni-channel world must be able to fulfill orders from anywhere to anywhere, whether it’s the consumer’s home or the retail store. Research shows that, in the next five years, the most significant shift in omni-channel fulfillment will be the in-store pickup of goods, a fulfillment option predicted to virtually double by 2017. This is good news for the customer, offering added convenience, and for the retailer, delivering additional in-store traffic. In the past, retailers built two types of distribution centers, one (or two) on the East and West coasts of the U.S. to handle store fulfillment, and another to handle strictly e-commerce. These distribution centers (DCs) were built to handle their own specific type of fulfillment and […]