Scope of Logistics in Omnichannel Fulfillment in Online Retail Space

  • December 9, 2022
  • Blog

Scope of Logistics in Omnichannel fulfillmentOverall value of omnichannel distribution is expected to increase by 7 percent annually from $600 billion in 2019 to $840 billion by 2025 as per a report by Mckinsey. This means there is a huge opportunity for logistics solution providers, as half of the logistics market is made up of consumer goods and retail businesses. With the e-commerce boom in these sectors, the omnichannel approach has become way more necessary.

What does omnichannel fulfillment involve?

Omnichannel fulfillment is a multichannel approach that aims to provide a seamless customer experience. This involves a back-end integration of distribution, promotion, and communication channels. Especially in the retail sectors like retail and consumer goods, omnichannel strategy has emerged as the new hygiene factor that needs to be well executed.

Omnichannel distribution largely depends on the last mile logistics efficiency. Last mile deliveries represent 41% of supply chain expenses and thus the time taken for the same should be shortened in order to optimize for more affordable delivery promises.

Drivers for efficient omnichannel fulfillment.

Stronger logistics network

Key factor driving the success of omni-channel approach is a strong and efficient logistics network with the ability of businesses to adapt in accordance with the changing consumer journeys. Single channel based structures may not work anymore. Rather, personalized engagement with their customers through different platforms of purchase could lead to higher conversion rates.

Flexible warehousing formats

Flexible warehousing structures can be seen as another driver that can support omni-channel logistics. Newer formats of warehousing have been developed that can help in the order delivery through different mediums. These include dark stores, dedicated fulfillment centers at various locations that have made retail network coverage bigger and better.

In the online retail space, getting higher sales conversions with the growing number of competitors and maintaining a balance in the e-commerce to store fulfillment is a challenge. Omni-channel logistics combined with route optimization can boost online sales that in turn aligned with flexible logistics solutions can improve customer experience, especially in case of small and medium sized businesses.

Cross-channel inventory management

Looking into the coordination of online and offline channels, control and visibility at each step is expected by the customers today. We see cross-channel shopping experience has been the highlight of e-commerce and online retail. Hence, the cross channel inventory management becomes the next big driver of omnichannel fulfillment that needs to be taken care of.

Utilizing real-time visibility, demand forecasting, analytics and predictive logistics into supply chain management have become a must. It is imperative to keep up with the ever changing supply chain and logistics requirements. Logistics solution providers need to align their services with the increasing use of technology to integrate different purchase channels.