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3 Tips to Make OmniChannel More Affordable.


Omnichannel model is becoming a popular sales model. Retailers are striving hard to meet customer expectations for swift delivery so much so that some even forget about their bottom lines. Since they are eager to sell their product, retailers are trying to compete with Amazon and ending up eroding their profit.

Though customers seem to love omnichannel, the practice of fulfilling orders from brick-and-mortar stores is expensive. Profitability comes down when you start fulfilling the same order from more than one store. Converting a traditional retail operation to omnichannel requires investment in material handling equipment, expert consultants, transportation route changes, retraining staff, and corporate realignment.

A recent survey conducted by PwC on retail and consumer goods finds that most retailers focus on raising prices in different operations in order to offset their rising fulfillment costs. This includes raising the minimum order value both for home delivery and click-and-collect orders. Some retailers may also raise product prices, cost of home delivery, and charges for click-and-collect orders, while some others may plan differential charges depending on customer profile.

One way to make omnichannel affordable is to eliminate inefficiencies and leverage hidden benefits.

Related: Outsource OmniChannel Order Fulfillment to Boost Holiday Sales.


Here’s how you can optimize your investment in omnichannel operations.


1. Inventory Segmentation

There are items that involve too much shipping and handling charges that they cannot accrue expected profits. One way to check spiraling fulfillment costs is to avoid omnichannel in the case of such products.

If you put a product in a distribution center and then move it to a store, the twice movement adds up to the labor and transportation costs. On the contrary, if the product is in the store for a consumer to buy it then and there, it reduces the other cost. Each time you move it, you are eroding the profit margin.

As a smart retailer, you may want to exclude such products from your omnichannel operations. Distributed order management (DOM) software can keep track of accumulated cost on each product. If you find that an item would lose its profit margin after shipment, you could choose to ship it from another location instead. You could do well by offering a discount or coupon to placate the customer.

Related: Free Shipping Versus Fast Shipping.


2. Tighten up internal order fulfillment processes

By tightening up internal processes, retailers could allow more time for delivery and buy more time for shipping. By whisking the order out the distribution center, you could choose to send it by low-cost ground transportation, so the order reaches its destination on time.

The accelerated fulfillment process helps retailers cut shipping costs while allowing the orders to reach customers quickly.

Related: Sales Down? 3 Tips to Overcome Slow Sales.


3. Leverage your fulfillment prowess

One of the best ways to keep customers happy with your business is by ensuring swift fulfillment of their orders. It can help generate “likes” and “tweets” and help spread the word about your business.

Since customers are keen to get immediate visibility on their orders, they are happy to give immediate feedback and share experiences online. They key to generating positive feedback is to focus on customer experience.

Reducing omnichannel fulfillment cost is a challenge for retailers. It thus helps to generate publicity for the business.

Related: 5 Ways to Use Social Media for Holiday eCommerce.


Bottom Line

Retailers are focusing on improving customer experience and paying close attention to order fulfillment. Keeping up with consumer expectations is a challenge, but it certainly isn’t impossible.


Contact Us to find out how we can start helping you save money on Packaging, Shipping, Managing Your Customer Service, Kitting and Assembly and Convention Logistics.



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