Omnichannel Commerce is a Myth for Brands (But it Doesn’t Have to Be)
If I were to ask you to buy a blue polo shirt, how would you do it? Traditionally, you would go to your local shopping center and purchase a shirt at a department store. Today, you also have the option to shop at online marketplaces or directly at a brand’s website. If you are even more tech-inclined, you can shop on Pinterest, ask Siri, or ping a bot in Messenger to purchase. As this basic exercise shows, there are increasingly diverse ways for a brand to merchandise and present their manufactured products to a customer. But how does that brand ensure discovery across department stores, local retailers and online marketplaces in addition to their own website? How do they have the proper inventory displayed and in-stock across each of these channels? Once you have decided to buy, how does the brand deliver an efficient purchasing experience?
It is increasingly difficult for brands to keep up with the widening diversity of purchasing channels. Brands today must be able to address four key channels: big box wholesale or B2B (selling to large businesses), boutique wholesale or B2SB (selling to small retailers), marketplace dropship or B2M (fulfilling orders through online marketplaces), and direct-to-consumer or D2C (selling directly through their own store). While consumer-facing technology has progressed to allow customers to easily buy things from any channel, the technology for brands to capture, process and fulfill orders across those channels has lagged behind.
Today, most brands navigate omnichannel commerce through disparate systems individually deployed across each channel. For instance, a brand will utilize an eCommerce platform for direct-to-consumer orders and a B2B commerce solution for big box wholesale orders, while boutique and marketplace channels are addressed with third party plugins. This piecemeal approach is an unfortunate reality that most brands must reconcile today. eCommerce platforms don’t provide the EDI capabilities required to capture wholesale orders, while B2B commerce solutions do not offer the storefront capabilities needed for direct-to-consumer orders. And since neither B2B nor eCommerce providers offer a fulfillment piece, brands need to go through separate fulfillment vendors to ship orders.
This is the world of fragmented commerce, which leads to issues with efficiency, cost and stability across the entire commerce stack. Developing a separate order capture system per channel requires significant upfront time and capital, leaving many channels neglected. As for fulfillment, brands must employ different fulfillment networks per channel, as certain warehouses cannot meet specific pick, pack and ship requirements. This causes operational complexity that lowers order-fill rates and slashes revenues. Inventory allocation is also a headache, as brands must physically allocate inventory per channel, leading to stock outs in some channels and overstock in others.
Eventually, the technology for brands will reach a tipping point, as these inefficiencies become major impediments that reduce profits and hamper growth. Brands will have to re-think commerce in a holistic way, rejecting the current fragmented model and pursuing a truly unified and omnichannel solution. In the market today, we see unified platforms that power the full stack of commerce (store, inventory, order management, and fulfillment) across every purchasing channel imaginable. Brands no longer need to develop separate systems to capture orders, and can quickly open up new channels through a single platform. Unified fulfillment networks account for any specific packaging rules by channel, preventing operational headaches and maximizing order-fill rates. Not only does a unified solution solve the pain points that come with disparate systems, it also unlocks powerful back-end capabilities. For example, brands can virtually allocate inventory across each channel from a common pool, improving efficiency in inventory allocation and turnover.
Brands with a unified approach will thrive, while those with disparate systems will continue to struggle and underperform. Remember the blue polo shirt we asked you to buy? It’s clear the brand behind those shirts will have to become truly omnichannel to succeed, but true omnichannel commerce can only be achieved through a unified platform, not a piecemeal one.
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