The Future of Supply Chains is Omnichannel
24 November 2021
The future of supply chains is omnichannel
Multichannel or omnichannel retailing are terms that are widely used these days. But did you know that supply chains can also be described with these terms? At first glance, it would seem that both multichannel and omnichannel serve the same purpose: to serve customers through a variety of channels. But is that really the case and why is omnichannel the preferred approach?
What’s in a name?
Multichannel supply chains are set up to provide customers with many purchasing options. It means products can be ordered through different channels such as physical stores, by phone or online. However in a multichannel business, these distinct channels are also treated as separate business units and are essentially siloed.
As you can imagine, there are drawbacks to this multichannel approach, including not being able to share information on customers and having no insight on stock positions at the other channels – which can ultimately result in a disjointed experience for a customer. Omnichannel supply chains seek to address this problem by connecting all these various channels internally, ensuring a seamless and consistent experience for customers – regardless of which channel is used.
Advantages of omnichannel supply chains
Alongside a more consistent brand experience for customers, there are other benefits that organisations can gain from taking an omnichannel approach:
Inventory management. By connecting all channels in the back end, organisations are able to gain a single view of stock and can seamlessly shift stock between channels where needed. This means ‘out of stock’ situations are avoided.
Widen audience. Not every customer prefers to order goods in the same way. Even in today’s digital world, there are plenty of customers that prefer to have face-to-face contact in a physical setting. By operating across multiple channels, companies can appeal to as wide an audience as possible.
Enhanced customer satisfaction. Customer expectations have risen dramatically over the last decade. An omnichannel approach raises the bar for the customer experience, by enabling customers to make purchases anytime and through any channel.
That is not to say that omnichannel is the holy grail for businesses. There are still some challenges that need to be considered. First off, an omnichannel approach requires investment in systems. If a business does not use systems that integrate across all channels – for instance inventory and warehouse management systems – then it becomes very difficult to keep track of stock and keep customers happy.
Providing a consistent brand experience also requires companies to take a holistic view on their entire operations. For instance, with online purchases the main point of contact will be through the delivery experience. How do you ensure that deliveries match the experience that you offer through store purchases? This is particularly difficult to control if you are working with third-party logistics providers.
While omnichannel is definitely the way forward for today’s experience economy, companies should do a thorough review of their entire operations to ensure that they have the processes and systems in place to deliver a truly omnichannel experience.