Omnichannel

The growth of e-commerce during the Covid-19 pandemic has accelerated developments of comprehensive omnichannel offerings. Companies recognized pandemic-favored delivery options such as ‘buy online, pick up in-store’ (BOPIS); in fact, the use of BOPIS services in the US increased by 106.9% in 2020. Other new omnichannel examples include a kiosk solution from collaboration between e-commerce software provider Shopify and Portuguese kiosk manufacturer PARTTEAM & OEMKISOSKS. Designed for use in brick-and-mortar stores, this digital kiosk presents customers with a complete online store selection, including individual offers and discounts. After making a purchase, the customer can opt to have their goods delivered or decide to take them directly from the store, if this option is available.

Customers appreciate this flexibility and particularly like choosing their delivery location. This could be the nearest branch, a smart locker solution such as the DHL Packstation, or even delivery to a neighbor. They also want to select the most convenient delivery time.

To offer this level of flexibility, companies must have an accurate inventory management system, one that is connected to all retail stores as well as warehouses and production facilities, with seamless connection to the logistics service provider.

In future, autonomous deliveries via drones and vehicles such as the Nuro delivery vehicle can help further personalize last-mile services, enabling a fully anytime, anywhere solution.

With the reopening of retail stores in the wake of the COVID-19 pandemic, the relevance of brick-and mortar stores as a place for customer engagement and brand building has become more visible again. New delivery and return models such as BOPIS or in-store return options have led many retailers to increasingly use their brick-and-mortar stores as fulfillment centers.

This is evidence of a clear trend towards omnichannel solutions, so that online and offline channels are becoming more and more complementary and connected, and are no longer seen as substitutes. A central aspect of the implementation of an omnichannel strategy is the movement of inventory, which requires a high degree of precision and even more flexibility to respond to fluctuations in demand. Strategically, this also means a shift from large distribution centers to a more decentralized setup, local micro fulfillment centers or even using brick-and-mortar stores as inventory hubs. This shift was first accelerated during the COVID-19 pandemic, when retailers began using their retail storefronts as fulfillment centers when they were not allowed to open them.

Currently, the decision on warehouse locations and quantities is primarily made by humans. However, companies are increasingly aiming to automate these decisions in regards to internal movement of inventory using smart algorithms based on various data points, such as regional weather changes or online customer behavior.

The challenges for logistics are finding the ideal logistics solution for the respective shipments and, above all, to adapt the more flexible, smaller-scale movement of inventory to route planning, as exact information about delivery options (eg, specific delivery periods and zones within inner cities) as well as measurements to help select the right means of transportation (eg, small van or large truck) are necessary for efficient planning. Only in this way can effectively shared inventory be realized across the various channels, online and offline, and an omnichannel strategy be successfully implemented.