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- The internet has had a huge impact on retail business. We used to go shopping in stores and sometimes, we still do. But now we also shop on our phones, tablets, and computers. So figuring out how your customers want to buy your products and how to deliver them efficiently can be a real challenge. In this video, we'll explore the concept of omnichannel fulfillment where you sell products both in stores and online, and we'll see why the growth of omnichannel is having such a profound impact on retail supply chains.
Let's start by looking at how the supply chain works for a traditional brick and mortar store. Products are delivered to a distribution center on a pallet. This is called a unit load because you're moving individual items as a single unit. Then, the pallet will be shipped from the distribution center to a large store. For smaller stores, the pallet may be broken down into cases and the cases ship to the store. But in either scenario, there isn't much handling required in the distribution center.
Once the products arrive in the store, an associate places them on a shelf. Then, customers come into the store, pick up the products they want, and carry them home. Now let's look at how an ecommerce fulfillment center works. Just like in a distribution center, the products arrive as a unit load. But rather than shipping out a whole pallet or a few cases, an ecommerce fulfillment center will ship out each individual item as a separate order.
That means you have to hire people to do work that used to be done by your customer, retrieving the items they want from your inventory and then delivering them to their homes. Because ecommerce fulfillment centers have to do so much more handling, they've been early adopters of automation technologies and robotics. The important point here is that the way customers get filled is actually very different for a brick and mortar store than it is for an ecommerce fulfillment center.
And the challenge that retail businesses are facing is that customers want both options. They want to buy products in a store and carry them home, and they want to buy the same products online and have them shipped to their home. Then, of course, there are customers who want to buy your products online and then pick them up in a store or they may want to buy in a store and have products delivered to their house. Dealing with all of these channels can be overwhelming.
For large companies, the best approach to this challenge may be to have two different supply chains. They can do in-store pickup through their stores and ship ecommerce and home delivery orders from an ecommerce fulfillment center. Small companies might need to ship ecommerce and home delivery orders from a traditional distribution center or from the back room of their retail stores. There are some third-party logistics providers that offer another option.
They're running ecommerce fulfillment centers that ship products for several retail stores. That way, retailers get the benefit of having a dedicated ecommerce supply chain without having to invest in building a new facility. Technology is changing the way that customers buy products and the way that companies fulfill orders. Optimizing your omnichannel fulfillment is one way to ensure that you're meeting your customers' needs and positioning your company for success.