B2B Payments

Where Omnichannel And Product Fulfillment Intersect

Vendors’ efforts to provide businesses with an efficient experience regardless of where or how they shop is creating greater importance in having strong omnichannel support, especially with regard to product availability. Sellers are having to enhance their focus on supply-chain management and make other adjustments necessary to accommodate customer expectations.

Indeed, with businesses now able to shop from virtually anywhere, be it in stores or online via a PC, smartphone or tablet, sellers are having to be more prepared to deal with stocking and other issues to make certain they have items relative to businesses’ needs ready to ship when ordered, or available for pick up within a nearby store for an online order. Equally important is for buyers’ ability to return items efficiently, even if that means taking a purchased product to store  different from the one where it was bought.

A recent Logistics Viewpoints commentary noted how the demand-driven supply chain, or shelf-level collaboration, plays a role in helping reinforce omnichannel supply-chain management. In the article, the author notes accordingly that, if a product is unavailable through the channel of choice, the customer may move on to another seller that can fulfill the order, resulting in lost sales, market share, and less customer loyalty.

“While many brick-and-mortar [sellers] are seeing quickly growing revenues from eCommerce, and stagnant or declining same store sales (as Walmart has been reporting in the U.S.), traditional store retail is still the great majority of sales,” the author notes. Thus, shelf-level collaboration between consumer (or business) goods companies and retailers should be considered foundational to omnichannel.”

A survey Logistics Viewpoints conducted last year found that the top three reasons sellers are moving toward omnichannel initiatives are to increase sales, cited by 77.9 percent of respondents; increase market share, 73 percent);  and improve customer loyalty, 69.7 percent. As such, each of these goals requires a concerted, coordinated effort for the seller to be successful.

As PYMNTS.comreported recently, however, retailers’ supply chains generally are not optimized to support the new omnichannel environment, particularly with regard to the changing supply needs created by the expansion in mobile and online shopping, according to a recent report in which Pricewaterhousecoopers surveyed 400 retail CEOs.

As such, enhanced efficiency in buyers’ B2B relationships is taking on increased importance as retailers look to keep up with changing consumer and product demands.

The research, commissioned by JDA software, found that, as mobile commerce has grown, shoppers are no longer just going shopping episodically—they are always shopping. But problems arise when the customer experience does not keep up with the demands of increasingly demanding shoppers. And that’s where supply-chain management becomes critical,according to the report “Forbes Insights: Retail’s New Imperative: Supply Chain Optimization As A Growth Strategy.”

“Yesterday, supply chain was important,” Thomas Storck, chief merchandizing officer at German retailer Galeria Kauthof, noted in the report. “Tomorrow, it will be mission critical.” The report’s authors, however, said that “tomorrow” has now arrived.

In a recent SuppleChainBrain interviewposted on YouTube, Chris Cunnane, senior analyst at the ARC Advisory Group, said how retailers view what omnichannel customers want often may be off base. “Where that kind of runs into problems is a lot of retailers think that the customer wants to replicate a single experience from one channel to the next channel,” he said. “As we know, that’s really not the case, and it’s really not a possibility either.”

Indeed, each channel is its own interaction point and its own opportunity to sell. But it’s not about replicating the experience, he said. “What the customer is really looking for is more of a brand experience rather than a similar experience,” he said.

And product availability is at the heart of that experience, Cunnane said. “The customer has to be able to find the product that they want in the channel they’re searching through, and they have to be able to fulfill that order as well through whatever channel they want,” he said. “And that’s really become the driver behind today’s omnichannel experience.”

In recent ARC research, Cunnane noted, 70 percent of sellers surveyed allowed customers to return an order to the store that was ordered through another channel, which helps make the customer happy and assists in the return-management process.

But on the flip side on a fulfillment standpoint, they’re not at that level right now. Only about 50 percent of retailers are enabling buy online, pick up in store, and only about 30 percent allow the customer to order an item or product in the store and then have it fulfilled from another store, he said.

“They’re not really empowering the [buyer] to get the product that they want through the channel that they want,” Cunnane said. “So the return management aspect is ahead of where the fulfillment side is right now.”

As such, omnichannel is creating challenges for sellers to accommodate the new avenues from which buyers can shop. It was take time for many to overcome these issues, but those that do so the quickest are sure to face fewer disgruntled customers and potentially lost sales.




The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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