Omni-Channel Logistics: Challenges & Solutions

Omni-channel challenge

Technology has changed the way customers approach a product or service. Now, it is easier for a customer to review and buy products or services in a single click through a smartphone or personal computer. The digital world has given a way for consumers to be more empowered and well-informed than ever before, giving the rise to a descriptor of ‘omni-channel’ shopper. Omni-channel shoppers are customers who prefer to connect via mobile or internet for their purchasing needs. These individuals are well-informed about their choices, able to find the best deals, and are expecting to receive each purchase at their preferred time and place.

Here is the journey of omni-channel shoppers according to DHL.

omni-channel

Image credit: DHL

Omni-channel approach for businesses is considered as a next logical evolutionary step after a multi-channel approach. Multi-channel approach seeks to optimise consumer experience in each channel operation. Meanwhile, omni-channel is more complex because customer experience in every channel must be identical, and switching from one channel to another will be customer’s habit. It means, when retailers know in-store customer preference, they should share it with an online channel and vice versa. Why? Because this kind of identical approaches can impact the buying decision of a customer.

See also: DHL Study on Logistics Strategies in the Race to the Urban Consumer

Behind optimal omni-channel strategy, logistics and supply chains are two factors needed. They are key enablers to consistently and cost-effectively deliver personalised service and flexible fulfilment. Logistics and supply chains also enable retailers to achieve cross-channel inventory visibility and optimisation to meet customer expectations as well as generate higher satisfaction and loyalty.

Omni-channel challenges

Omni-channel is and will be more popular in the future. However, logistics company will face some hurdles in order to provide the best customer experiences. If not handled tactically, these challenges can cause to lose sales and dilution of brand value. Therefore, it is important for suppliers to know about these omni-channel challenges.

  1.      Lack of inventory visibility and metrics

Inventory status is important especially for omni-channel industry. During peak of holiday season, a challenge for retailer regarding inventory will increase.

Solution: It is suggested to develop an efficient order fulfilment process that works via an optimised warehouse management system. By using your Inventory visibility, you can forecast of future demand or your customer and plan your supply chain activities accordingly.

Additionally, when it comes to inventory management and visibility, fundamental metrics such as inventory carrying costs, perfect order % and % should also be your concern.

Solution: Your metrics must align with customer, financial, and strategic objectives. It should also be cost-effective and efficient to ensure your product flows well.

  1.      Poor visibility into inventory in transit

Poor visibility into inventory in transit own by enterprises and startups has led to increasing demand for real-time freight visibility solutions.

Solution: So, you should lead your omni-channel logistics solution to not only visible into shipments and trucks, but also into orders and stock-keeping units. And to have a more accurate time of arrival, machine learning capabilities can also be adopted. Machine learning can broaden your data sources, including weather, traffic, location, and social networking. It will ease you in communication and exchange of data information between trading partners.

“Omni-channel is very much about inventory optimisation through technology. Inventor visibility across all stores and channels is the key enabler.” – Terry Lundgren, CEO of Macy’s Inc.

  1.      Segmented supply chain processes

Supply chain processes should work in line together to ensure across-the-broad customer satisfaction – otherwise not. With large company have many private warehouses and distribution centres that operate differently, it will be much harder to provide well supply chain process.

Solution: The solution to this problem is that you should consolidate processes, rather than creating silos.

  1.      Unreliable order fulfilment processes

When you tell customers what and when they will receive the products, you should keep the promise. A delay can give bad customer experience that will deter a customer from doing business with you in future.

Solution: Hence, you should ensure an estimation fulfilment process and possibly use technology to forecast future delays in your service.

  1.      Finding the right transportation

It will be hard to decide which freight you should use to drive your goods to your end users as it is hard to find efficient, cheap, and effective transportation. However, to keep customer’s satisfaction, you should provide the best.

Solution: Selecting the right shipping method for every situation if essential to omni-channel logistics.

  1.      Ease of return

Return of products is a must-have feature for an omni-channel company – or else, your conversion rates will suffer. Additionally, your customer will expect an easy returning process for their purchase.

Solution: Provide step-by-step explanations regarding the return of product info in your platform will be helpful.

Read also: FedEx to Test Same-Day Bot Deliveries

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