Multi-Channel vs Omnichannel: Can Fulfillment Do it All?

Published : October 9, 2014

fulfillment-channelsOmnichannel. The name alone sounds new and exciting. Even futuristic. In the order-fill end of a business, as with everything else, the new is often associated with cutting-edge developments— just the kind of tools you need to propel your company's success and growth. But, unfortunately, that’s not always the case. New doesn’t always mean better.

Before you give in to the dazzling terminology of omnichannel distribution, and consider leaving multi-channel fulfillment behind, be sure you understand just what both have to offer.

What is omnichannel fulfillment exactly? How is it affecting the average boots-on-the-ground order fulfillment center? And is it, as its name promises, the supply chain wave of the future?

What it is; what it isn't.

In discussions of marketing and distribution, the terms "omnichannel" and "multi-channel" are sometimes used interchangeably. But they aren’t the same thing.

Multi-channel fulfillment refers to the process of selling a product or service through many different sales outlets. This can include any combination of retail channels: a brick-and-mortar store, for example, plus a hard-copy catalog, combined with an Internet presence. Customers usually expect each of these outlets to have their own characteristics, both positive and negative. The pricing, product availability and return policies can all be slightly different.

Omnichannel fulfillment, however, has subtle—yet significant— differences from multi-channel. The goal of omnichannel retailing is to put the consumer at the center of the experience. Ideally, the customer should be able to move seamlessly from one shopping experience to the next. Whether that customer is viewing product choices at the mall, on their phone, at a website, or even on a game console, all the product choices, prices and return options should be identical. The idea is to give consumers a seamless experience. When done successfully, omnichannel fulfillment will, according to an article by Tom O'Dette, give a shopping experience that is "brand-focused, rather than channel-focused."

Why it matters.

The idea of omnichannel fulfillment is sound. It could, in theory, increase your customer base and allow you to reach a wider market share—if it works. But, as things stand today, there are serious stumbling blocks which can unravel the system.

Why? Because, as mentioned above, omnichannel marketing promises users a seamless shopping experience. This means that your shipping and distribution processes and technology have to be able to deliver on that promise. They have to give uniform service across all your retail channels.

This can be a challenge that the typical order-fill infrastructure hasn’t yet evolved to handle. The logistics for inventory, shipping and staffing management alone would be a nightmare to untangle.

Sure, you can create an integrated system that interfaces between your central hub and all your various stores and distribution centers. But when an online order comes in for a navy blouse—that just so happens to be located in a store not 20 miles from the ultimate shipping destination, who’s going to be handling that order?

An employee with years of experience in order-fulfillment or the new sales girl you hired yesterday?

It can be difficult to predict when and where orders will come from. And if you don’t staff fulfillment personal at all of your brick-and-mortar stores in addition to your fulfillment centers (and who actually does?), then you end up with untrained sales staff wandering your store trying to fill orders.. Customer satisfaction can falter, as well—in both online and in-store experiences.

Having sales people running around trying to fill orders, means that attention is diverted from customers who are actually in the store. And with non-experts filling orders, your chances of having a package mislabeled or packed in accurately is astronomical.

What does the future hold?

Omnichannel fulfillment may well be the wave of the future. Consumer interest and expectations in this area are already high. But, like all those fascinating offerings we see in science fiction, ideas must come before implementation.

The technology and shipping capabilities of the average fulfillment set up simply have not yet evolved to the point where they can offer the seamless experience that omnichannel distribution promises. Corporations who offer this to their customers end up failing more often than not. Service becomes costly and inefficient as non-experts end up doing the fulfillment work. The result is frustrated customers and business losses.

If you have a business, patience is key. The technology to successfully offer omnichannel fulfillment in a cost-effective way may be coming. It's just not here yet.

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Topics: Supply Chain Technology

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