Omnichannel Distribution

Dr. Ir.
Agus Purnomo, MT
Omnichannel Retail
Omnichannel Retail is when
customers can use more than one
sales channel such as physical
stores, e-Commerce / internet,
mobile (m-Commerce), social
Commerce, and others to do
research, buy, get and return or
exchange items from retailers,
regardless of the sales channel
used.
http://www.etpgroup.com/id/memahamiritel-omni-channel/
Omni-channel vs. Multi-channel
• Omni-channel Retail is a customer-centered approach that is an

evolution of multi-channel retail.
• This refers to the adoption of strategies, a variety of tools for
dealing with customers, and the same customer experience at
various shopping channels.
Omni-channel Retail Challenge:
• Present on one channel - such as retailers who have physical stores

but do not have online channels, are limited in growth by time and
space.
• Present on a number of non-integrated channels - such as retailers
that cannot fulfill their e-Commerce orders from their physical
stores.
• Has an online and offline system that is partially integrated - like,
POS solutions that are not well integrated with the order
management system.
Omni-channel Retail Benefits:
Omni-channel retailers not only help organizations to centralize
their business operations and implement infrastructure changes,
but also enable them to provide consistent experience to attract
and retain customers, thus encouraging greater sales.
• Increased perception and customer satisfaction
• One customer identity in various channels
• A customer loyalty program in various channels
• Access to inventory and ATP visibiltas in various channels
• Prices and promotions are transparent on various channels
• Gather customer information for targeted marketing strategies.
• Increase productivity, greater sales, high profits, and wider
presence through new revenue streams.
Omni-channel Retail Drivers:
• Increase shop effectiveness (sales / store area -
GMROF)
• Increase inventory turnover (GMROI)
• Increase income per employee (GMROL)
• Increase revenue per customer through Up-Selling and
Cross-selling
• Enhance customer experience, increase loyal
customers, and market share
Omni-channel Distribution
• Omni-channel Distribution is one-touch
integration between operations and physical
product flows across all channels to provide a
seamless shopping experience.
• In other words, Omni-channel distribution is a
system that enables customers to complete a
purchase and receives orders from any channel
they choose.
• Moreover, it encompasses not only the delivery
of goods to stores and customers, but also
backward distribution concepts since customers
can return products.
https://blog.magestore.com/omnichannel-distribution/
Two types of Distribution
• Forward distribution system: characterized by its sources
(dispatching locations), destinations (points of reception) and
associated links. When building it, you should take consider
about different types of sources and destinations in the
physical structure, as well as possible delivery processes and
modes
• Backward distribution system: the mixture of the physical

flow of return products, and the locations where products
returned. It covers shipment between customers and stores.
6 basic types of customer service processes in Distribution
1. Buy online, Pick-up in store: when a customer creates an order online, and pick their
order in your store (to check if the items they bought are really compatible with them
or not)
2. Buy online, Drop-shipping: when a customer creates, purchase an order on your
website, then require ship to a place
3. In-store Purchase, Home Delivery: when a customer purchase items in your physical
stores, and ask you to pick it to their required place (mostly their home address)
4. Ship from Store: when you transfer products from the physical stores to another place
5. Drop-shipping: when you transfer products from the warehouse to another place (a
store, a home address, etc.)
6. Buy online, return in store: when your customer purchase a product online, but then,
they do not like it and decide to get to your physical store to return the product (and
maybe get another product in your physical stores)
7. Same day/on-demand delivery: when your customer purchase items online, and want
to get the items immediately or in a scheduled date.
Omnichannel Distribution Model
Why Omnichannel Distribution is important?
1. Consumers LOVE Omni-channel
• Easy to customize delivery choice
• Have more chances to check item before purchase
• Feel safe and happy to purchase items
• Access the store’s products conveniently
2. Quick and Correct Delivery

One of the biggest issues that explains why customer stops shopping in store
is SHIPMENT.
There are two kinds of customers. One is who can wait for you even in two
days. Others are the ones who cannot wait for you in more than 1 hour. Worse,
due to the nowadays-busy world, most of your customers are the second type
– who don’t have any waiting skills.
3. Profits increase significantly
The main advantage of expanding your business to new channels is the
opportunity to grow your sales. New customers and new channels can lead
to more opportunities for revenue.
Everyone knows a basic formula:
The Biggest Challenges when using Omnichannel Distribution
1. Inventory Visibility
• It means simultaneously providing customers with information
on the availability and delivery times of products in all channels.
• Customers then have an opportunity to choose the channel,
online or offline, they would prefer purchasing the products they
want.
• Inventory is the distribution center. Knowing the status of
inventory is very crucial to the Omnichannel business
The Biggest Challenges when using Omnichannel Distribution
2. Delivery speed
• That must have been ridiculous when delivery speed, at the same time, is
both the advantage and disadvantage of Omni-channel Distribution
• Developing and optimizing modes of delivery to the customer is the most
important topic for fulfilling distribution requirements, according to the
retail experts.
• The importance of increasing delivery speed is based on the fact that
most customers want to receive a delivery the day after placing the order,
or two days later at most.
• This means processing varying order volumes between the distance
channel and the stores, as well as adapting accurate delivery time is very
crucial.
• The key to this problem is to give them various shipping methods and find
a system that can help you calculate the shortest way to deliver products
to your customers.
Top 9 Omni-Channel Logistics Challenges Businesses Face
Omni-channel logistics strategy seeks to synchronize inventory, logistics and distribution
functions across all sales channels to meet consumer demand. Retailers, manufacturers,
distributors and wholesalers alike are developing complex omni-channel logistics
solutions to ensure that their supply chain creates optimal levels of the all-important cost-
to-serve metric. For example, it makes more sense to ship a customer a product from their
local retail store than from a distribution center hundreds of miles away.
There are many use cases for omni-channel logistics:
o Online order fulfilled directly to the buyer’s home
o Online order sent to a brick-and-mortar store for in-store pickup (a popular way to drive new traffic
to brick-and-mortar storefronts)
o In-store purchase of an out-of-stock item delivered at a later date to the store or directly to the
buyer’s home
o Online order submitted via eRetail channel (e.g. Amazon) and fulfilled directly to the buyer’s home
via eRetailer’s or seller’s distribution infrastructure
o Order drop-shipped directly to consumer from a product manufacturer or CPG business via online
retail storefront
o Online order and in-store purchase returns managemen
https://legacyscs.com/9-omni-channel-logistics-challenges/
1. Lack of Inventory Visibility and Metrics

• In the world of omni-channel logistics, it’s crucial that businesses
know the status of their inventory and whether it’s at a distribution
center or retail location.
• The last thing a company wants is to promise next-day delivery to
its customers and not be able to follow through.
• Inventory can be particularly challenging to keep track of during the
holiday shopping season.
• To address this challenge, businesses must develop an
efficient order fulfillment process through the use of a fine-
tuned Warehouse Management System (WMS).
2. Poor Visibility into Inventory in Transit

• Both major enterprises and startups alike generally have
relatively poor visibility into inventory in transit, which has led to
an increasing demand for real-time freight visibility solutions.
• Leading omni-channel logistics solutions not only enable
visibility into shipments and trucks, but into orders and stock-
keeping units, as well.
• These solutions also incorporate optimization capabilities and
collaboration capabilities that facilitate communication and the
exchange of data and information between trading partners.
3. Segmented Supply Chain Processes

• If a business’s various supply chain processes don’t work
together, it can’t ensure across-the-board customer
satisfaction. Larger companies generally have many private
warehouses and distribution centers, managed by different in-
house and outsourced operators, that run on different
systems.
• As a result, they employ different tactics to ensure their supply
chain runs smoothly.
• The key to solving this supply chain segmentation is to
consolidate these processes, rather than let them function in
silos.
4. Unreliable Order Fulfillment Processes

• When a business tells its customers that they will receive
same-day or next-day delivery, it needs to deliver on that
promise.
• An unreliable order fulfillment process can lead to
shipping delays, which can deter customers from doing
business with that company in the future.
• A good way to ensure a streamlined order fulfillment
process is to use the proper technology to help forecast
future delays in service or shipping.
5. Finding the Right Transportation

• There are many different ways to get a product from a
brick-and-mortar storefront or distribution center to the
customer’s doorstep.
• The challenge is to find the most effective and efficient
transportation solution to keep customers happy without
driving up the landed product costs.
• Selecting the right shipping method for the right
customer situation is essential to omni-channel logistics.
6. Reverse Logistics
• The return process for any product should be just as
seamless as its initial delivery. In this new omni-channel
landscape, customers expect to be able to return
products they’ve purchased online in store or by mail.
• Companies that don’t offer this ease of return are
unlikely to generate repeat business.
• Implementing sound reverse logistics infrastructure is
imperative to good customer service within the omni-
channel logistics framework.
7. Manual Processes
• One of the leading causes of inventory inaccuracy across supply
chain nodes is the continued use of manual — often paper-
based — processes to capture inventory data. Implementing a
WMS with radio frequency (RF) and barcode scanning
capabilities is a simple, yet important first step.
• The most advanced businesses have taken additional steps to
automate inventory counts, such as using drones and RFID
tags.
• This automation makes it possible for them to compare results,
identify discrepancies and create a more accurate picture of
their inventory.
8. Overlooking Physical Transformation

• Although digital transformation has received the lion’s share of
attention from analysts and technology companies alike,
businesses must take care not to lose sight of physical
transformation.
• The method of flowing truckloads of products from large
distribution centers to stores has become outdated. Businesses
must update their supply chain and distribution networks to
compete in this new market, in which speed of delivery and
inventory reduction are paramount.
• Leading enterprises are testing out new distribution strategies
in an attempt to become more agile and to better align with
customer expectations for faster deliveries.
9. Implementing 3PL Strategy

• A 3PL’s core competency around fulfillment operations — such as
knowing which metrics to use and how to measure them to drive
continuous improvement — can help companies both large and
small close the capability gap.
• Omni-channel logistics is all about providing consumers with a
seamless shopping experience.
• The right 3PL partner can use its retail and shipping industry
knowledge and supply chain experience, as well as a diverse set of
WMS capabilities and integration strategies to address the
challenges listed above.

Omnichannel Distribution

Uploaded by

Copyright:

Available Formats

Omnichannel Distribution

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Omnichannel Distribution

Uploaded by

Copyright:

Available Formats

Dr. Ir.

• Omni-channel Retail is a customer-centered approach that is an

• Present on one channel - such as retailers who have physical stores

• Backward distribution system: the mixture of the physical

2. Quick and Correct Delivery

1. Lack of Inventory Visibility and Metrics

2. Poor Visibility into Inventory in Transit

3. Segmented Supply Chain Processes

4. Unreliable Order Fulfillment Processes

5. Finding the Right Transportation

8. Overlooking Physical Transformation

9. Implementing 3PL Strategy

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.