Lightwell Business Technology Blog

Omnichannel order fulfillment is a double-edged sword. On one hand, you have multiple methods for fulfilling customer orders, and customers can choose whether they want orders shipped to them or picked up in store. This flexibility helps to make customers happy.

On the other hand, retailers have seen upwards of a 300 percent increase in what it costs to serve omnichannel customers. 

According to the Retail Industry Leader Association’s annual survey, as reported in Supply Chain Quarterly, executives identified controlling supply chain costs as a top priority, with order fulfillment and omnichannel costs being a part of the reason.

The good news is that tools exist to help reduce omnichannel order fulfillment costs and complexity. These tools leverage advanced capabilities like artificial intelligence, cognitive computing, and predictive analytics to optimize order fulfillment processes.

The transparency provided by these tools can help companies drastically reduce the cost to serve their omnichannel customers while still meeting consumer expectations of speedy delivery.

While there is no magic bullet to cost reduction, let’s take a look at three ways companies can use these advanced capabilities to improve the way they fulfill orders.

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For retailers as well as B2B companies, order fulfillment plays a major role in both customer satisfaction and profitability. Customers expect flawless, fast order fulfillment across all channels.  While customer-centric companies work hard to meet these expectations, it can be very expensive to do so.

As customers purchase from your company across multiple channels—via the Web, mobile apps, kiosks, marketplaces, retail locations, and even catalog and telephone orders—you’ll want capabilities like centralized order orchestration, ship from store, drop ship, and real-time inventory visibility. These order management capabilities work together to meet customers’ expectations seamless, fast and error-free order fulfillment.

However, these capabilities alone don’t ensure companies can do so profitably.  In fact, while many CEOs have identified omnichannel commerce as a top priority, the IBM Consumer Expectations Study found that it could cost up to three times more to serve omnichannel customers.

Every channel adds complexity to the order fulfillment process. In addition, there’s pressure from customers and competitors to same-day or two-day shipping, making it even more critical to leverage modern technologies to fulfill orders in the most efficient, cost-effective way possible. In fact, the IBM study found that 72 percent of consumersconsider two-day or less shipping as a factor when making a purchase.

On top of using an omnichannel order management system, companies are now adopting solutions that can apply human reasoning and cognitive capabilities to order fulfillment. As a result, they’re able to meet or exceed customer expectations while reducing their fulfillment costs. Let’s take a closer look.

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Omnichannel commerce brings new challenges to order fulfillment. Think of all the channels your customers use to shop—your website, online marketplaces, stores, paging through a catalog, or calling your contact center.

Add in all your inventory locations—including DCs, warehouses, fulfillment partners, and retail locations—and you may run into difficulty fulfilling orders as flawlessly as customers expect. All the order touchpoints such as point-of-sale systems, contact centers, and e-commerce platforms need to sync with your order, inventory, warehouse, shipping, and reporting systems. Otherwise, orders may need to be canceled or delayed, which affects customer loyalty and chips away at profitability.

Flexibility is key when it comes to omnichannel order fulfillment and order management systems that enable it. Static business rules—such as a customer located in California should receive products from the nearest fulfillment center in Arizona— no longer makes sense when inventory is sourced from retail locations as well.  Now, you also need to consider the store inventory, as well as the demand for a product in that geographic area.

That same customer, located in Northern California, orders a popular product online that sells out quickly in the retail store in his area. Instead of shipping from the store in his area that has low inventory (and risking losing an in-store sale as a result of being out of stock), artificial intelligence can determine that it’s better to ship the product from a store in an area that isn’t experiencing the same level of demand.

Sound confusing? It can be. But this is the next generation of order management and fulfillment, which uses artificial intelligence and cognitive capabilities to determine the best source for items and ship them in the most profitable way possible. These capabilities can transform the way orders are fulfilled—reducing costs and increasing profitability, while ensuring customers are happy. Here are a few examples of how this works.

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Did you know that IBM merged a number of their top conferences—Interconnect, Amplify, World of Watson, Edge, and Connect—into one in 2018?  If you haven’t already heard about it, IBM Think is IBM’s new flagship business and technology conference, taking place March 19–22, 2018 at Mandalay Bay in Las Vegas.

It’s a global event where over 40,000 business and technology innovators, leaders, and thinkers will gather in one place to share ideas, discuss topics like Artificial Intelligence, Cloud, Supply Chain, Blockchain, Omnichannel Commerce, Data Analytics, Integration, Security, IoT, and more—and enjoy some exceptional networking, entertainment, and fun along the way.  

While there are many reasons to attend—including a few mentioned in the video below—you may be most interested in reading the highlights so that you can make plans quickly (the event is just weeks away). So, as someone who has attended quite a few conferences over the years, I’ll share in this post what I believe are some of the best reasons to attend. These are in no particular order.

 

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