BY BEN AMES, SENIOR NEWS EDITOR
ANNUAL OMNICHANNEL REPORT
Strategy
TALK TO ENOUGH RETAILERS, WHOLESALERS, AND MANUFACturers, and they’ll tell you that building up their omnichannel fulfillment networks is imperative for maintaining market share. But dig a little deeper, and
you’ll soon realize that omnichannel retailing is not a single bullseye target,
but rather a diverse mosaic of operations that can include everything from
shuttling inventory between brick-and-mortar storefronts to offering BOPIS,
or “buy online, pick up in store,” services.
Many practitioners have traditionally defined “omnichannel” as “
distribution from anywhere,” including the distributor’s DC, direct from the
supplier, or shipped from a store or third-party logistics partner (3PL). But
today, the term “omnichannel” seems to have almost as many definitions as
the number of players in the marketplace.
To learn more about the current state of omnichannel fulfillment practices,
DC VELOCITY teamed up with ARC Advisory Group, a Dedham, Mass.-based
management consulting firm, to conduct an industry survey. Respondents
answered 32 questions about their approach to meeting current challenges
in omnichannel commerce, with a focus on order fulfillment and, especially,
the changing role of the retail store in helping companies deal with a surging
tide of online orders.
OMNICHANNEL COMES IN MANY SHADES
Our survey revealed that retailers deploy a broad spectrum of cross-channel
tactics to support sales in today’s challenging environment. When asked
which omnichannel services they currently offer, the answers ranged from
“order at store, fulfill from a warehouse (or another store)” to “return to store,
even when goods are ordered online.” (See Exhibit 1 for the full rundown.)
Each of those options requires its own assets and capabilities, so we also
asked what particular tools respondents rely on to get the job done. The
data showed that the most common technologies or applications currently
used by respondents as part of their omnichannel initiatives are warehouse
management systems (80 percent), transportation management systems (76
As retailers continue to expand their omnichannel service offerings, they’re
increasingly turning to a traditionally underused resource: the brick-and-mortar store.
Adding new tiles to the
omnichannel mosaic
This year’s omnichannel study was
conducted by ARC Advisory Group
in conjunction with DC VELOCITY. ARC
analyst Chris Cunnane oversaw the
research and compiled the results.
The study explored current challenges in omnichannel commerce,
with a focus on order fulfillment
and, especially, the changing role
of the retail store. Respondents
included logistics professionals from
a variety of industry verticals, who
submitted answers during July and
August 2018.
As for the demographic breakdown, the majority ( 60 percent) of
respondents sold goods through a
combination of direct and indirect
sales channels. Another 30 percent
sold merchandise through direct
retail only, and the remaining 10
percent through indirect sales channels only.
A report containing a more
detailed examination of the omnichannel survey results is available
from ARC. For order information,
visit https://www.arcweb.com.
About the study
