Retail SMBs: Making it in the Omnichannel Big Leagues
With Black Friday in two days, the holiday season fast approaching and e-commerce exploding around the globe, opportunities for small-to-medium businesses (SMBs) in the retail industry are skyrocketing — and the rules of the game are changing.
Cloud-based e-commerce and enterprise resource planning (ERP) applications are lowering the barrier to entry, while mobile technology is transforming how customers order — and how companies fulfill orders. With technology to automate fulfillment processes, many SMBs are seizing the opportunity to compete successfully in multiple retail channels.
Omnichannel: The Curve Ball
Whether customers order via direct-to-consumer (e.g., Amazon), in-store or direct from a retailer website, they expect a seamless order and delivery process. And although approximately 84 percent of the retailers polled by Retail Systems Research believed that a consistent customer experience across all channels was very important, actually doing so is challenging.
Smaller, high-growth companies must contend with the rigorous requirements of each distribution channel, ranging from next-day shipping to specialized branded pack slips to complex shipments for big-box retailers that require SSCC labels and advanced shipment notifications (ASNs).
Take, for instance, NASCAR diecast manufacturer Lionel Racing, which ships model railroad and NASCAR collectibles through five different channels: e-commerce, mass retailers, dealer/wholesaler, direct-to-consumer, and corporate.
Rick Gemereth, CIO at Lionel Racing, explains, “Every client has a different set of requirements. To be a successful partner, we’ve got to be able to meet their unique needs. For example, many of our direct-to-consumer (drop ship) customers want everything branded as if the order is coming from them, even though it’s coming from our facility. So, we make sure the packing list, the box, and everything else looks like it’s coming from them.”
Shipping: The Heavy Hitter
Shipping is playing an expanding role in e-commerce, with more than half of e-commerce consumers now browsing by available shipping options, according to The Wall Street Journal. To satisfy consumers and the diverse shipping requirements of their distribution channels, SMBs are turning to integrated order management and fulfillment solutions.
In Lionel’s case, the company wanted to integrate NetSuite (ERP), SPS Commerce (EDI) and UPS WorldShip (shipping) for a more streamlined order-to-delivery workflow and to generate branded packing lists, ASNs and customized shipping labels.
“We automated fulfillment with Descartes OzLink™ for NetSuite, achieving 100 percent accuracy in our dealer/wholesaler channel and a 73 percent reduction in processing time in e-commerce,” says Gemereth.
Descartes OzLink enables multiorder consolidation, picking and shipping used in Lionel’s dealer/wholesaler channel. With e-commerce, NASCAR fans can order replicas of the winning car online within minutes after a race. Using a cross-docking process, Lionel can receive a container of collectibles from plant and ship out 1,000-plus orders in under eight hours — eliminating 22 hours of processing time.
The Warehouse: Bench Strength
Omnichannel also has a huge impact on the warehouse. With technology that shares information between ERP, e-commerce and carrier applications, SMBs can streamline warehouse and inventory operations to satisfy the needs of each distribution channel.
Wireless picking and barcode scanning also helps to increase fulfillment accuracy and control costs with order validation, which consistently ensures the right product is shipped quickly to the customer. In addition, guided walking paths optimize picking, put-away and inventory moves to increase productivity.
“Our scan gun technology integrates seamlessly with Descartes OzLink," adds Gemereth. "We’ve been able to reduce paper-based processes; streamline pick, pack and load processes; and enhance inventory control with accurate cycle counting.”
Swinging for the Fences
Retailers are stepping up their game to handle the complexities of omnichannel. With automated, integrated order fulfillment technologies leveling the playing field, retailers of all sizes can not only get in the omnichannel game, but hit it out of the park.
Brian Hodgson is the vice president of sales at Descartes, a provider of on-demand, software-as-a-service solutions for logistics-intensive businesses.