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In-Store Uncertainty Leads To Innovative ECommerce Solutions

In-Store Uncertainty Leads to Innovative eCommerce Solutions

Omnichannel retail had its moment in 2020, a year that taught retailers the importance of a well-defined inventory strategy. However, even with the lessons learned from last year, it has been tricky for retailers to establish their plans in 2021, especially as the holiday season approaches and COVID variants continue to shake up customer behavior. Still, one thing remains certain – omnichannel operations are vital in this new retail landscape and the eCommerce channel continues to take precedence. 

With the anticipation of lower foot traffic in stores coupled with inventory concerns, prioritizing your eCommerce channel through innovative eCommerce solutions, even at the intentional detriment of having lower stock levels in retail stores, may save sales during this peak period. 

Everyone is still feeling the implications of the pandemic

Before making any major decisions about the upcoming holiday season, retailers want a finalized view of what inventory they will have available to sell in the November/December timeframe. However, supply shortages, carrier capacity and workforce deficiencies, all originally stemming from the pandemic, continue to create forecasting challenges for retailers. 

Many retailers have had to come up with multiple contingency plans. According to research from Emarsys, 46 percent of global retail marketers are considering canceling their in-store Black Friday 2021 sales due to the ongoing uncertainty around the pandemic, with 81 percent of retailers planning to encourage customers to shop online rather than in-store.

While there was hope earlier in the year that the more traditional start to major holiday promotions after Thanksgiving would return, eCommerce is still feeling the weight of necessity. The trend of driving promotions earlier in the season, which we saw many brands and retailers do in 2020, continues to be the best approach to manage the overflow of online shopping we expect to see ongoing, especially with the aforementioned concerns around carrier capacity and labor shortages. 

It is essential to be omnichannel-ready for the holidays

Being omnichannel-ready is imperative as it directly assists with inventory management, carrier capacity and labor availability. With the right system in place, retailers can leverage retail locations in support of eCommerce volume, mitigating labor concerns at fulfillment centers and shortening delivery times by getting product closer to the consumer (more on that below). 

Distributed Order Management (DOM) technology empowers retailers with omnichannel readiness, enabling them to route orders across multiple fulfillment points depending on a number of factors, including delivery preferences, shipping time and costs, inventory optimization at stores and even opting for more sustainable delivery methods.

Using a DOM, retailers can support a multi-node fulfillment operation as well as alternative delivery methods ranging from store fulfillment offerings (curbside pick-up; buy online, pick up in-store (BOPIS); ship-from-store; etc.) to micro-fulfillment centers or temporary pop-up DCs.  

Regionalization is the future

While most brands and retailers cannot copy the Amazon model of opening hundreds of distribution centers all around the world to get closer to customers, they can work with partners to have smaller pockets of products available in more locations, especially during heavy shipping times such as the peak shopping season. Regionalized, multi-node fulfillment, versus what historically has been large distribution hubs where all inventory is in one place, will continue to be a trend in the future.

Along with more regional fulfillment points, carrier diversity is another trend we expect to continue. It will take a few years for international carrier capacity to catch up with the rapid eCommerce growth experienced during 2020. In the meantime, regional carrier networks have seen tremendous growth. In order to keep up with order demand as well as unwavering consumer expectations for fast delivery, brands and retailers will need to lean towards a more diversified carrier network and carrier relationship structures. 

Ready or not

The holidays are here. The most successful brands and retailers will be those that can respond quickly to an unpredictable market. All retailers need to be looking to omnichannel solutions this holiday season and beyond. Are you omnichannel ready? If not, consider enlisting a qualified BPO to help you unlock your full potential in the new digital-first retail landscape.

Jamie Saucedo

As Vice President of Business Operations, Jamie is responsible for PFS' global portfolio of 70 brands. Throughout her 10+ years at PFS she has served in various roles across the organization, giving her a wealth of industry knowledge across verticals. Jamie applies her expertise to guide our clients to successful eCommerce operations.

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