By Kelli Saunders, President, Morai Logistics
By 2017, e-commerce sales will reach $370 billion according to Forrester Research. This is an increase from 8% to 10% of all U.S. retail sales.
That’s a lot of packages traveling back and forth, to and from their destinations. This also means there’s the potential for unhappy customers if they don’t get what they want, how they want it.
This article on LogisticsViewpoints.com gives a succinct explanation of what today’s customer wants, “Today’s customer wants one thing and one thing only – the product. And they want it when and how it is the most convenient for them.” With two sentences, Chris Cunnane, the person behind the article, illustrates the shift that has happened in customer expectations.
Growing interconnectivity and rapidly evolving technology are two of three reasons customers expect the items and services they purchase to be delivered immediately. The third reason, which is a result of the two previously mentioned reasons, is omni-channel logistics.
“First there was multi-channel, where a retailer sold goods through more than one channel. Then, it became cross-channel, where retailers tried to enable the customer to move between channels during the purchase journey. Now, there is omni-channel, where retailers are trying to provide full, seamless continuity across all channels of operation for the customer,” writes Cunnane.
It has been predicted that by 2030, 30% of all purchases will be made through an online community. By offering more consistent customer experiences, connectivity, visibility, flexibility, delivery and seamless integration, omni-channel logistics has changed customer attitudes and purchasing patterns.
Now that the consumer expectation is that of instant gratification, the question is: can current logistics providers and supply chains keep up?
Looking at when omni-channels become absent channels
Current retailers are trying to meet the customers’ omni-channel. Omni-channel commerce is being implemented by many leading brick and mortar retailers such as Walmart, Best Buy and Home Depot.
However, they are not always successful in meeting consumer demand.
For example, in this 2016 study by Retail Info System News, it found the following when examining why omni-channel failures occur amongst the retailers it surveyed:
- Across the board, retailers have varying levels of failure to execute omni-channel deployments in the area of store processes. This shows up in the gap between how retailers “value” fast and efficient execution for buy online/pickup in-store tasks (3.9 on a scale of one to five where one is the lowest rating and five the highest) and how they rate their “ability” to execute them (3.1).
- Looking at workforce management, the most significant chasm is found in the area of automated creation of optimized labor schedules.
- Another process with a significant gap is pro-active response to overtime alerts, labor law violations, etc.
- The top challenge retailers cite in omni-channel execution is responding to last minute issues, such as stock-outs and customer order changes.
- No retailer claimed to “always” provide a seamless and satisfying shopping experience. How many do it “almost always?” Just 23.7%. Most say they do it “sometimes” (52.6%).
- The top two pain points that stand in the way of improving execution of omni-channel and customer engagement strategies are: 1. Too many silo systems (63.9%) and 2. Difficulty in forecasting and allocating required labor to execute omni-channel tasks (52.8%).
At the end of the day, omni-channel is hard work and requires a lot to be successful in the eyes of the customer. Both the logistics and backend must also work in unison or there will be a negative experience for the customer, and an expensive one for the retailer.
However, given the way retail is shifting into e-commerce, it is better to find and fix the gaps rather than stay stagnant offline.
Morai Logistics Inc. is a 3rd party logistics provider with an operating agency agreement representing Mode Transportation. We are a powerhouse logistics team based in the Greater Toronto Area and do business throughout North America, including Mexico. Our team is dedicated to our terrific clients and we strive to take the chaos out of your supply chain. We are always on the lookout to do exceptional work with remarkable people and companies!