What is omnichannel fulfillment?

by | Jun 4, 2024 | Order Fulfillment, Order Management, Suppliers

Today, 21% of retail sales are completed online. By 2026, it’s expected that number will jump to 25%.

For suppliers, it can be challenging to meet the omnichannel supply chain requirements set by retailers who expect them to support various management models and sales channels. Even though it’s challenging, it can also be very rewarding—when suppliers say “Yes,” to omnichannel fulfillment, they win more business.

While we can be sure that the rise of online sales and eCommerce platforms is not going away anytime soon, it’s important to understand exactly what that means for you as a supplier—especially if eCommerce is only one of many sales channels you use.

Defining “omnichannel”

You may have heard the terms “omnichannel fulfillment” or “omnichannel inventory management” thrown around, but it can be a tricky concept to conceptualize if you’re newer to the business or only sell your products through one channel.

An omnichannel retail strategy is a seamless approach to providing consistent consumer experiences across multiple sales channels, regardless of how the customer purchases and receives an order. It’s simply the reality of shopping in 2024.

These sales channels can include:

  • Brick-and-mortar stores
  • Catalogs
  • Marketplaces
  • eCommerce
  • Purchases made across different platforms, like mobile devices, desktop computers and tablets

You may have also heard about the distribution side of things. Omnichannel retail distribution is the way that the end-customer receives their product. While this is often invisible to the customer, it’s extremely important that they receive the order in the timeframe that it was promised.

Methods of fulfillment can include:

  • Delivery to the consumer’s home or direct-to-consumer (DTC)
  • Shipment to a physical storefront or ship-to-store
  • “Buy online, pick up in store” (BOPIS)
  • Drop shipments

Today’s consumer knows what they want

In 2024, consumers want to purchase items the way that’s most convenient for them. This means they decide when, where and how they make a purchase, and when, where and how they’ll make a return if needed. If a supplier wants to sell to today’s consumers, they need to meet demand by providing different options for purchases and returns, or else the consumer can go elsewhere to find a similar product from a company that meets their needs.

Plus, with the rise of additional direct-to-consumer (DTC) sales channels, like Facebook, Instagram and TikTok Shop, it’s now easier than ever for consumers to dictate the terms under which they make a purchase.

How do suppliers meet omnichannel fulfillment demands?

Most suppliers separate how they run their business into two categories: direct-to-consumer (DTC) and wholesale. This is mainly due to the variation in how they need to operate. It’s important to note that not all items are sold across all channels consistently, and DTC buyers will be different than wholesale buyers.

However, there are steps that suppliers can take to optimize this process and avoid managing many disparate systems.

Complete inventory visibility

Insight into inventory across all channels can provide suppliers with an edge over the competition. If you can provide accurate data about what you have in stock (and where it can be purchased from with the least amount of effort), consumers will be more inclined to purchase your products. Plus, timely and accurate product data can be make or break for many customers.

A single, unified system for dropship, warehouse and marketplace orders

With one system to manage different channels, you’ll never miss an order or a message from a trading partner. When you have the correct technology infrastructure in place, your omnichannel supply chain flows seamlessly.

Cost-effective shipping options

It’s possible to spend less on shipping when you have a product in place that automatically finds the cheapest carrier and service type for fulfillment. Plus, the right product allows suppliers to cut back on manual data entry and spend less time communicating with carrier partners.

Boost your business and get a head start on the supply chain trends of the future by optimizing your omnichannel supply chain today. Reach out to SPS Commerce to begin the conversation about how your organization can thrive.

Jenya Lawson