The relevance of „Omni-Channel“ has emerged in recent years, especially due to the global expansion of e-commerce. While we can still physically buy clothes or electronics in the city center, there are more and more possibilities to buy products online in the web or via app. Supported by the cell phone, tablet, internet and apps with simple user interface, nowadays we can quickly and easily order online from anywhere, set a delivery date and track our shipment until the goods arrive at our doorstep. This is nothing new for us. In the meantime, we consider normal what was unthinkable just a few years ago.
But the „Omni Channel“ concept goes one step further and combines physical shopping while walking in the city breathing fresh air and online shopping on the cell phone laying on the sofa, in a profitable way.
For a long time now, we have been able to look at electronics in the store, try them out, and order them from the same store to pick them up a few days later. For a long time now, we have been able to try on shirts, pants, shoes or sweatshirts at any major clothing store and have them shipped to our home from another shop if a size is out of stock. Paying in the store is no longer possible only per cash or card, but simply by app. Clothes ordered online that do not fit can be easily returned by the customer at a store around the corner or the nearby post office.
That’s exactly what Omni Channel is. Omni Channel is considered to be the highest evolutionary stage of a multi-channel system, in which a company’s „seamless integration of all sales channels“ takes place. The goal: a flexible shopping experience, extended availability of goods and generally a high level of service, which has a corresponding effect on customer satisfaction and loyalty. In applying this strategy, a company can increase in sales of up to 14.6%…
However, the easier it becomes for customers to buy and return products anywhere at lightning speed, the more complicated it becomes for the logistics network behind the procurement of these „channels“ to maintain this constant availability, avoid delays and bottlenecks, and at the same time minimize logistics costs through lean inventories. If you look at contemporary literature, this is fundamentally contradictory. Supply networks are no longer linear and the customer is no longer just the retailer, but often enough the end consumer. Not to mention reverse logistics. The profitable advantages for any company and the constant service competition between retailers are so immense that, according to studies, more than 70% of retailers implemented at at least the simplest form of such omni-channel strategies. However, in such a realization – even in the „simplest form“ – numerous logistical questions have to be asked that can turn a company’s basic supply chain strategy upside down. As an example, here are a few issues with relevant applicable decisions:
– Storage: Supplier DC vs. Retailer DC vs. Store storage / Central vs. Decentralized
– Backward distribution decisions: CEP delivery vs. store return
– Reverse Logistics: Distance DC vs. Seperate RC vs. In-Store
These decisions can turn a company upside down. Companies such as Zalando focus so much on such distribution optimization that they need imense logistical power. So, if you are a hardcore logistics and distribution network strategist, now would be the right time for joining this field. It would also be a very viable business field for the future, as the ongoing digitalization will pose further challenges to logistics experts: Technical advancements, increasing fast pace and higher service expectations for every company change the framework conditions of the supply chain, operations and logistics.