SPECIAL REPORT
By Ben Ames
Omnichannel distribution was one of the hottest trends in the retail sector this year, with companies across the
industry rushing to combine their e-commerce fulfillment operations with those for
brick-and-mortar store sales.
Retailers have adopted a wide variety of
approaches when it comes to omnichannel fulfillment. Some fill orders placed by
online customers by pulling items directly
from retail shelves, others run separate fulfillment operations for e-commerce and store
replenishment orders, while still others combine these operations, using a single DC to fulfill
e-commerce orders, replenish retail stores, and
ship wholesale orders.
Despite success stories at companies like clothing
retailer Abercrombie & Fitch and department store chain
Dillard’s Inc., not all omnichannel operations are revenue
rockets. In fact, many companies struggle to run their omnichannel
operations at a profit.
“Omnichannel is absolutely being done, although it’s taking up lots of resources and probably
not being done as profitably as many of us would like,” said Jason Denmon, apparel and specialty
retail industry leader at the distribution consulting and design engineering firm Fortna Inc. So
what can retailers do to change that? We asked some experts for their advice.
TARGET YOUR EFFORTS
The first step in fine-tuning an omnichannel operation so that it runs more profitably is to identify which fulfillment flow the company wants to optimize, Denmon said. No single company
can do it all, so it helps to target investment in one place, such as tracking truck routes within
its own fleet, choosing a reliable third-party logistics (3PL) partner, or shipping parcels with an
THE HIGH;PROFILE SUCCESS STORIES ASIDE,
MANY COMPANIES STRUGGLE TO RUN
THEIR OMNICHANNEL OPERATIONS AT
A PROFIT. WE ASKED THE EXPERTS
FOR SOME ADVICE.
HOW TO MAKE YOUR
OMNICHANNEL OPERATIONS
MORE PROFITABLE
