All About OMNI Channel Logistics
The majority of consumers expect to receive items purchased online in 3 days or less.
Meeting this demand is critical for businesses. Omni channel logistics are the way to meet and exceed customers’ delivery expectations.
Find out everything you need to know about omni channel logistics here.
What Are Omni Channel Logistics?
Omni channel logistics are the response to an omni channel approach to retail. Customers connect with companies through online channels as well as retail stores. They expect to have the same quality of experience no matter which channel they use.
They want the buying process to be convenient, and they want to receive their items quickly. Companies with the best omni channel strategies retain 57% more of their customers.
Omni Channel Retail
Modern retail includes a combination of online and brick-and-mortar interactions. The omni channel approach designs a unified experience for customers at every touchpoint.
Many customers research a product online before buying it in a retail location. Other customers do the reverse and look at an item in the store before buying it online. Consumers don’t see any separation between ecommerce and the physical world.
Omni Channel Logistics
Consumers can shop and buy items through different online channels or in-store. They also want fast and convenient delivery.
Options for delivery continue to expand. Customers can buy in a retail location and have items delivered to their home. They can buy online and pick it up in-store. They can buy online with standard, two-day, or same-day shipping. Free shipping is often an option. Customers can pick up an item at a locker instead of having it shipped to their home.
Retailers need an integrated logistics system. They need each order to be routed and delivered quickly and accurately. They need inventory data that updates in real time. The distribution system should put the right inventory in the right place efficiently.
Omni channel logistics is more complicated than logistics for traditional retail. Each business needs a customized solution. The nature of the business and the demands of their customers are important factors.
Challenges of Omni Channel Logistics
Omni channel logistics coordinates inventory, logistics, and distribution across all sales channels. Businesses face several challenges to adapt their supply chains for omni channel retail.
Businesses need to know what inventory is available and where it’s located. They need this information in real time. Inventory visibility ensures that each order fulfillment operation is successful.
Poor inventory visibility causes inefficient operations. The retailer has difficulty predicting its inventory needs. Merchandise security and quality control can also suffer.
Offering multiple buying channels and delivery options makes inventory visibility much more complicated.
Inventory in transit is one area that is especially challenging. Good visibility requires real-time information. Retailers need to know which products are being transported to which destinations.
Consumers want to receive their purchases quickly. They also want to know that their shipment will arrive within the delivery window. Poor visibility into inventory in transit makes estimating an accurate time of arrival more difficult.
An unreliable order fulfillment process leads to unhappy customers.
Integrating Supply Chain Processes
Focusing on the supply chain for each channel separately leads to inefficiencies. Each group focuses only on their own interests even if it might cause problems for others.
Larger companies can have many private warehouses and distribution centers. Each center has a different in-house or outsourced operator, and none of them use the same system.
This segmentation can reduce inventory visibility. It creates waste from teams doubling each other’s efforts or using redundant processes. It also makes the business slower to react to changing circumstances.
Finding the Right Transportation
Omni channel logistics need to account for many purchasing and delivery options. Each option calls for different ways of bringing a product to the customer.
Finding the best transportation solutions that don’t drive up costs is the challenge.
Ease of Return
Consumers expect to be able to return products that they purchased. They want returning a product to be easy and convenient. Businesses need a reverse logistics infrastructure to handle these returns.
Mastering Omni Channel Logistics
Omni channel logistics are a challenge, but mastering them is essential. Businesses need to find the right technology and distribution formats. A logistics partner is another tool for success.
Retailers can improve their inventory visibility through a combination of technologies. Barcode and RFID scanners make tracking inventory more efficient through automation. Warehouse management software helps businesses optimize the functionality of warehouses and distribution centers.
Tracking inventory-related metrics shows how cost-effectively merchandise flows through the distribution network. Software and analytics tools can automate this process.
Machine learning can improve the visibility of inventory in transit. Algorithms can use a broader set of data that to more accurately predict when a shipment will arrive. The data includes factors like weather, traffic, and location.
Systems to centralize data reporting and analysis can help integrate supply chains.
Choosing the Right Logistics Partners
To succeed in omni channel logistics, businesses need logistics partners. A third-party logistics (3PL) provider manages procurement and fulfillment activities. A 3PL service can be a single provider or a package of services that handles supply chain management.
One of the most important parts of omni channel logistics is the last mile. Last mile delivery service makes up around 53% of total shipping cost. Challenges include:
- Incorrect customer addresses
- Traffic variability and road blockages
- Lack of parking in urban areas
- Low delivery productivity in low-density areas
- Customer unavailability during delivery windows
The right 3PL provider will have systems in place to overcome these challenges. They will offer delivery to the customer’s home or a retail location. They should also be able to handle warehouse distribution and reverse logistics.
To find the best route for each shipment, options should include trucks, vans, cars, and bikes. These choices provide the flexibility to adapt to the circumstances of each delivery.
Other services for last mile delivery can include assembly. The 3PL provider can place the item in the room of choice and remove the packaging.
When you’re ready to find your logistics partner, contact us for a quote.