What is Omnichannel Distribution?

If you haven’t noticed or had simply become too accustomed to this new form of distribution, over the past several years customer demands have evolved drastically from what they once were–with no plans of going back (unless it’s the USPS of course). Gone are the days when visiting a physical store was the only way to seek and purchase a product. When you were curious about testing a product, you have to physically navigate yourself to its source and not have it conveniently placed right upon your doorstep. Consumers today shop for goods 24 hours a day, 7 days a week, and expect their orders to be met how, where, and where they want them—fast.  What started as a relatively simple cross-channel fulfillment has evolved into omnichannel delivery for both small and large retailers. If you have no idea what this new age concept is, or if you would like to learn more, let’s look at how omnichannel distribution providers have become an essential strategy for thousands of companies.

Definition of Omnichannel Distribution

Omnichannel distribution is a multichannel technique used by businesses to enable consumers to buy and collect orders from multiple sales channels with a single click. A company’s omnichannel distribution plan must consider both a consumer transaction and a potential customer return, which are also referred to as forward and backward distribution services.

The aim of the omnichannel logistics strategy that many businesses are adopting is to minimize costs, increase transport, and delight customers. Implementing an omnichannel distribution strategy also contributes to sales increases because consumers are more likely to spend more money online than in brick and mortar stores. Furthermore, because of the seamless customer usability, omnichannel distribution increases brand loyalty, leading customers to return for more.

How Does this Help Consumers and Businesses? 

How did the world’s most famous brands become so well-known? By ensuring that every single customer interaction had the best possible experience they could ever have (at least, most of the time).

This positive experience includes no resellers harassing customers about the money-back guarantee and no negative experience with that local shop down the street making you and your peers look absolutely crazy on Yelp. Great brands ensure that every customer not only has a straightforward, harmonious path to purchase…but that they also have complete control over the customer experience every time–making both consumer and retailer content and satisfied.

Omnichannel Distribution vs. Multichannel Distribution

It’s completely normal to think and hear the terms “multi-channel distribution” and “omnichannel distribution” can be used interchangeably. Just by reading that sentence, you may think that both words are synonymous, that they are simply the same thing with a different conjugation of letters. However, the two methods sound so identical, that it’s tempting to believe they can be used interchangeably–except that’s a mistake and can lead to lots of confusion.

Multichannel combines the customer experience and allows customers to connect on the platform of their choosing. It is adaptable, but it expects brands to behave within the parameters of the channel. On the other hand, with omnichannel, the consumer, not the product, is at the core of distribution. It’s all about engaging in ways that are consistent with why they choose a particular channel and demonstrating an understanding of where they are in the customer lifecycle. Customers can buy wherever they are—rather than treating channels as separate silos, omnichannel allows for cross-channel spillover and provides customers with interactions both within and between channels.

In essence, omnichannel blurs the lines between various sales and marketing networks, resulting in a single, interconnected whole.

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Omnichannel vs. Ecommerce

While ecommerce fulfillment and omnichannel delivery are related, they do not apply to the same distribution method. Ecommerce companies operate solely online and have no physical locations. Physical and online retail elements of omnichannel companies are handled as a single entity. Because of the wider range of distribution and pick-up choices, omnichannel ecommerce has an advantage over traditional ecommerce. Customers would appreciate your ability to fulfill orders across a variety of platforms, and it can give you an advantage over your rivals.

Benefits of Omnichannel Distribution

Customers have more options when it comes to purchasing goods.

When a customer has the choice of purchasing a product from several locations, they can have a better experience. In reality, 54% of shoppers claim that they are more inclined to do business with a company that sells goods across multiple channels.

Brand awareness and loyalty are enhanced by having a physical and online presence. Customer retention is simpler, less expensive, and more effective than gaining new customers.

Time is saved by having more versatility

Keeping track of anything across all channels is part of an omnichannel distribution strategy. Customers should be able to return an online order– or to a different location–if they can pick it up from a store. Customer loyalty and sales are boosted by the variety of options available.

Customers invest more time and money into your business

Being an omnichannel company already gives customers a reason to select you. More online traffic will lead to more in-store sales if you make your inventory available on multiple platforms. Customers who only shop in physical or online shops, rather than both, would be drawn in by the omnichannel service. More incentives to shop in-store, online, or both at the same time will encourage your consumers to become omnichannel shoppers.

Essential Omnichannel Software Features and How they Work

The inclusion of several distribution channels raises a company’s complexity, making it difficult to find a software system that can handle all channels in one database. A fully integrated accounting and inventory ERP framework can help with this. You will gain access and visibility into both retail and wholesale orders coming in from different channels with an all-in-one solution. Despite the fact that information is stored in a single database, users can still differentiate between order types and sources. When handling orders, you won’t have to pull data from different systems, and you’ll still have the most up-to-date inventory details. Below you will find 5 key features that are crucial to include within your omnichannel software to ensure an accurate account for all distributing channels.

Integration of E-Commerce

It’s critical that your back-end software is fully integrated with all of your eCommerce stores, whether you have your own online shop, sell via sites like Amazon and eBay, or do both. In order to better account for revenue and inventory, sophisticated two-way integration ensures data is exchanged from your back-end system to your online storefronts and vice versa. Online purchases are expressed in the back-end framework for processing, and related inventory is assigned for picking. This information is inserted once, into the back-end system, and then pushed online when obtaining the product. Two-way integration prevents double entry and guarantees the information is current in all systems.

App for Mobile and Tablet Sales

Employees in a showroom, at a trade show, or while taking orders on the road will use mobile and tablet devices to enter orders. This channel is ideal for companies who want to show their products in a visually pleasing manner (it’s all about aesthetics). Customers can place orders via the app, which are immediately sent to the backend, ensuring that inventory information is still current. This removes the need to join and manage orders when on the road or at trade shows until you return to the office.

Point-of-Sale (POS)

If your company has a retail component, such as a full-fledged store or showroom, an integrated POS system would eliminate the need to manage multiple systems. When a customer makes a purchase in the shop, an order is generated and inventory is immediately allocated. This eliminates any inventory problems for consumers who place orders through several channels at the same time, such as online and over the phone.

Incorporate an Online B2B (Buissness-to-Buisness) Order Application

Customers who shop on B2B eCommerce sites may use a self-service interface to position their own orders. Through the use of a password, you can have full control over who buys from your company. This choice also allows you to adapt to your customer’s individual needs and business hours without having to employ additional personnel to handle the process internally.

Multiple Inventory and Warehouse Locations

When a company begins to sell across several outlets, it is likely that inventory will be held in multiple locations. This may involve using their own warehouse, 3PLs, manufacturer drop delivery, brick and mortar stores, and so on. Software that allows for quick inventory transfers and offers insight into what products are available at each location improves the productivity of the order management process and keeps customers satisfied.

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