Traditionally, retailers have used channel assigned warehousing. This means warehouses would fulfill orders based on the sales channel that received the order. With this system, there may be one warehouse specifically for wholesale customers, one for retail stores, and one for eCommerce customers. Inventory levels would be tracked separately, and if one warehouse experienced an inventory shortage, an inventory transfer would need to be done in order to fulfill that order (stock would be sent from one warehouse to the next, and ultimately shipped to the customer).
With omnichannel retailing becoming the new norm, the traditional way of using warehouses has become outdated. Customers increasingly expect omnichannel fulfillment. They want to browse on their smartphones, make the purchase online for in-home delivery, and possibly make the return to their local retail store. This expectation has led to the realization that omnichannel retailing needs omnichannel warehousing.
Implementing an omnichannel warehousing solution is not as difficult as it sounds. Fulfillments will be shopper based instead of channel based. This means orders will be fulfilled based on customer location instead of the channel used for purchase. Since all warehouses will have the ability to fulfill orders from all channels, there will be no need to double up on inventory quantities to ensure proper fulfillment through all sales channels. Orders will simply be fulfilled based on location and inventory quantity.
Since returns can account for almost 30% of all sales, the ease in which you are able to handle returns is of utmost importance. It is actually easier to handle returns in an omnichannel warehouse. Returns received in a warehouse will be inspected and quickly placed into inventory regardless of where the stock originated. The same is true for a return received in a retail store. The return will simply be placed into inventory in the retail location. Since orders can be fulfilled from any warehouse or retail location, as long as the return is placed back into available inventory it will be on hand to fulfill an order.
For omnichannel warehousing to work, there needs to be a single source of truth for all inventory data. You need to use a cloud based order management system that fully integrates with each of your sales channels and allows for complete inventory visibility across all warehouses and channels. With the correct OMS assigning fulfillments based on location, you will have the ability to provide your customers with a fully omnichannel shopping experience. This will ultimately lead to increased customer satisfaction.
Click here to see how SkuNexus can help you set up your omnichannel warehouse solution.