Optimizing Omnichannel Fulfillment HAVING A REAL-TIME VIEW OF STOCK IS CRUCIAL FOR ESTABLISHING EFFICIENT, COST-EFFECTIVE CROSS-CHANNEL FULFILLMENT. S A RA H J O N E S
“We’ve got to become dramatically better at predicting demand.” — Kasey Lobaugh, Deloitte Consulting
23 / 2021 INVENTORY REPORT
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ourtesy of the e-commerce and click-and-collect boom during Covid-19, omnichannel fulfillment has never been more imperative for retailers. But getting inventory management right in an increasingly cross-channel world requires real-time visibility. In the fourth quarter of 2020, e-commerce sales were up 32 percent year-over-year, according to data from the U.S. Department of Commerce. And it wasn’t just direct-to-consumer shipments that climbed. Buy online, pick up in store (BOPIS) had been growing even before Covid, but safety concerns related to going inside stores caused the curbside fulfillment model to surge. “One thing we saw with the global pandemic was that retailers reacted very fast to change in the retail environment and swiftly developed new fulfillment capabilities to continue to serve their customers,” said Simone Peinkofer, assistant professor in the Department of Supply Chain Management at Michigan State University. “Establishing processes and infrastructures that allow for
flexibility and can be reconfigured to evolving fulfillment options will be key.” Even before the pandemic, delivery timelines were speeding up, necessitating fulfillment that is closer to the consumer. Ken Morris, managing partner at Cambridge Retail Advisors, says that many of his clients are shipping upwards of 75 percent of their digital orders from nearby stores instead of centralized fulfillment centers. Although omnichannel has been retail’s aspiration for years, most merchants are still running legacy systems that manage bricks and clicks separately. Michael Ryba, partner and director at Boston Consulting Group, noted that when retailers began selling online, they realized that their legacy tech stack couldn’t handle the e-commerce business. Instead of migrating everything over to new systems, they attached dedicated e-commerce stacks to their existing enterprise resource planning (ERP) systems—a workaround that was expedient but limiting. “You end up with two distinct views of inventory, meaning you have one stack with e-commerce and whatever inventory dedicated
