Omni Channel Distribution Strategy

A comprehensive omni channel distribution strategy allows your business to stay relevant with your customers’ needs and expectations. For a retail business, that means offering your products both online and offline, and allowing your customers a variety of options for delivery and pickup. In today’s world of instant gratification, people expect that they will be able to get products quickly and in the most convenient way possible. They expect to order products from their home computers, laptops or mobile devices and pick them up in stores, or order items in stores to be shipped directly to their homes.

 

By taking a strategic omnichannel approach to the way you run your business, you will give your customers a seamless experience and provide them exactly what they want, when they want it and how they want it. Offering omni channel distribution services is a beneficial move for your business as it can increase growth, sales and customer loyalty.

Retail Omni Channel Trends

In today’s technology-focused world, shopping continues to evolve into a hybrid experience that consumers expect and demand. According to retail omni channel trends and studies, customers interact with multiple channels before completing a purchase. These channels likely include your website, social media, and traditional in-store shopping. In fact, according to a report from Periscope by McKinsey, approximately 5 percent of Americans limit their shopping to online exclusively and 10 percent to offline exclusively. This survey included more than 1,000 US respondents from ages 18-70 and found that more than half of the respondents shop equally online and offline (1). Essentially, despite closure rates of brick and mortar stores, they still play a key role in the sales process as part of a larger strategy—but more importantly, your customers are demanding a seamless omnichannel experience!

 

 

 

 

A study found that approximately 5 percent of Americans limit their shopping to online exclusively and 10 percent to office exclusively and more than half of the respondents shop equally online and offline. 

 

 

 

 

Additional omni channel trends show that online shoppers buy from branded websites because of the convenience, price and free shipping, followed by brand reputation and loyalty rewards. Customers make purchases on Amazon because of convenience and price, as well as ease of shipping. Consumers still buy in stores because of the ability to touch or try on an item before purchasing, however twice as many Baby Boomers cite this reason than members of Gen Z (2). One of the main deciding factors in which ecommerce sites people frequently buy from is the time it takes to receive their purchase. Studies show that 38 percent of online shoppers will abandon their orders if delivery will take longer than a week, and 74 percent of shoppers state that free shipping is one of the most important factors to them (3). By keeping up with these trends, you can increase sales, gain customers and grow your brand loyalty.

 

 

 

 

Studies show that 38 percent of online shoppers will abandon their orders if delivery will take longer than a week, and 74 percent of shoppers state that free shipping is one of the most important factors to them.

ITS Logistics Omni Channel Trends and Strategy

Fulfillment Flexibility

One of today’s most pressing retail omni channel trends is the need for flexibility in the way you fulfill your customers’ orders. Each individual customer has their own unique expectation of the shopping experience, and it is vital that your omni channel distribution strategy caters to these expectations. Some customers shop all online and expect consistent 2-day shipping or less, while others prefer to pick their orders up in stores. A third group of consumers prefers to shop in stores and have merchandise shipped to their homes. Your fulfillment strategy needs to be able to cater to each of these preferences in a timely fashion, and anything else your customers prefer. The reality is if you don’t offer that flexibility, someone else does.

 

 

 

Some customers shop all online and expect consistent 2-day shipping or less, while others prefer to pick their orders up in stores. A third group of consumers prefers to shop in stores and have merchandise shipped to their homes.

 

 

 

 

Beware: one day shipping is coming

Earlier this year, Amazon announced that it will be making one-day shipping the norm for all Amazon Prime members. Amazon currently has more than 100 million paying Prime members, which means the company reaches more than 50 percent of households in the U.S. This will have a substantial effect on online shopping, as it means that people will start to expect reliable one-day shipping.

 

Other companies are following suit. Walmart has already stated that they, too, have plans to offer free one-day shipping in the near future. As people get accustomed to one-day shipping, it will become imperative for your business to offer it. If you already offer or have plans to implement two-day shipping for your customers—you need to start thinking about one-day, as well.

 

 

Enhanced customer service

Along with providing customizable fulfillment flexibility for your customers, it is also imperative that you enhance your customer service strategy. As part of your omni channel distribution strategy, customer service needs to be available to your customers on all levels: your website, social media, review websites, in person and more. Basically, your customer service needs to be everywhere the customer is. This part of your business must be constantly monitored—and responses must be prompt with a consistent tone.

 

Omni channel trends studies show that for Millennials and Gen Z shoppers, loyalty to a brand is hugely important. Having responsive customer service channels that your customers can reach out to when something is wrong to get the issue fixed is a huge part of this. Elements like easy returns also improve the overall shopping experience and help with customer satisfaction and retention.

 

 

 

Elements like easy returns also improve the overall shopping experience and help with customer satisfaction and retention. 

 

 

 

Omnichannel Challenges

Embracing a robust omni channel distribution strategy is not only beneficial for your business, but if you don’t make it a priority right now, your competition will leave you behind. However, it certainly is not without its challenges. By expanding to channels like Amazon, Target and Walmart, you can streamline your business growth. Many companies can feel discouraged as they start looking into fulfillment options through these large retailers, as it can lead to lower profit margins, and you have to deal with a variety of fulfillment restrictions and policies. Circumventing these roadblocks is possible. From finding companies that ship product directly from China to Amazon fulfillment centers, to working with third-party logistics companies like ITS that can help you add additional sales channels without impacting your margins, there are plenty of options.

 

Additional omni channel challenges are continuously shifting as the customer base changes. Before, the inability to try on clothing items before purchasing was a big challenge in online shopping. Customers have also cited entering detailed payment and shipping information as one of the most annoying aspects of online shopping. For Millennials and Gen Z, the wait time from when an order is placed until it is delivered, and shipping costs are becoming a huge issue. Your business needs to be able to cater to this expectations.

 

There are several things you can do to avoid these challenges and improve the customer experience. It can be as simple as allowing your customers to create secure accounts with easier payment options, so they don’t have to re-enter their payment and shipping information each time. By creating forgiving return policies for clothing that doesn’t fit, in store and online, you can increase sales of clothing and grow your brand loyalty. Having a comprehensive reverse logistics system in place is also helpful because studies show that Gen Z shoppers expect to return more than 75 percent of goods bought online. Along with that, Millennials expect to return 50 percent of these items and Gen X and Baby Boomers expect less than 50 percent (4). With the busy lifestyles that everyone leads today, people want to be able to return items they bought online in the store, and vice versa. By offering this as part of your omni channel strategy, you will increase your number of loyal customers.

 

 

Gen Z shoppers expect to return more than 75 percent of goods bought online. Along with that, Millennials expect to return 50 percent of these items and Gen X and Baby Boomers expect less than 50 percent. 

 

 

 

 

The benefits of an effective omni channel distribution strategy

In this market, it is important for companies to embrace best practices in omni channel distribution strategies for several reasons. We will always have brick and mortar stores and physical footprints, but companies need to evolve and offer ecommerce to stay relevant. A good example of a company that has successfully grown both the ecommerce side of their business and the in-store portion is Target. They offer their customers a variety of options when it comes to getting their items including traditional ecommerce, online purchases for in-store pickup, and traditional in-store shopping. By providing a true omnichannel experience, Target is appealing to exactly what their buyers want and how they want it—offering each of their customers the unique experience they expect.

ITS Logistics Direct to Customer Fulfillment Services

Omni Channel distribution strategy through ITS Logistics

It takes a lot to have a truly cost effective and efficient omni channel distribution strategy, including expertise in ecommerce, business-to-business, direct-to-consumer, direct-to-store, reverse logistics, flexible one- and two-day shipping options, and more—but don’t worry, this is where we excel.

 

At ITS, we are experts at helping you create a great customer experience. We offer comprehensive inventory management, helping our clients develop strategies to insure they meet their inventory turn goals and reduce stock outs. We know the importance of retail compliance for business-to-business orders and take special care to implement processes to ensure these compliance policies are followed. Additionally, we have flexible and customizable real-time reporting and visibility, allowing you to see exactly where orders are and when they will be delivered. We know how important it is that your customers receive their orders on time, and that’s why we have a strong focus on timely fulfillment and the reduction of channel specific processes to increase your operation’s efficiency. We also make it a priority to meet the complicated service requirements for both direct-to-customer and direct-to-store shipments to meet your customers’ buying expectations, and keep them coming back for more.

 

Omni channel trends show that today’s consumers want to be able to switch back and forth between multiple channels before making a purchase decision. Offering your customers a seamless and effective cross channel experience will lead to revenue growth, higher customer retention and increased brand loyalty.

 

Learn more about how ITS can help you implement a successful omni channel distribution strategy.

References

 

1 Periscope By McKinsey, Amazon Prime Day 2018 Beyond the Hype‑The Evolution of Consumer Shopping Behaviors https://www.periscope-solutions.com/download.aspx?fileID=1489

2 Tracy Wallace, “The 2019 Omni-Channel Retail Report: Generational Consumer Shopping Behavior Comes Into Focus” Big Commerce https://www.bigcommerce.com/blog/omni-channel-retail/

3 Bill Ciervo, “18 Ecommerce Order Fulfillment Statistics That’ll Change the Way You Think About Retail” Conveyco https://www.conveyco.com/ecommerce-order-fulfillment-statistics/

4 Tracy Wallace, “The 2019 Omni-Channel Retail Report: Generational Consumer Shopping Behavior Comes Into Focus” Big Commerce https://www.bigcommerce.com/blog/omni-channel-retail/

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