Outsourcing Omnichannel Operations: Identify the best BPO for your brand
Omnichannel retailers are already implementing plans to execute both in-store and online operations in advance of 2021’s peak holiday shopping season. But many are discovering that gearing up for fully integrated operations — from ERP to fulfillment — requires major investments in technology and often an operational overhaul.
Many other retailers are following through on plans they reported in PFS’ post-Peak 2020 Survey; with 52% planning to outsource some or all of their digital-first operations. In some cases, this is seen as a stop-gap measure while they develop a long-term strategy. For others, outsourcing is the strategy that will allow them to focus on their core competencies. In either case, there are certain questions omnichannel retailers need to ask to assure a smooth peak season and a continuing rebound of their business.
So much to do, so little time
While overall retail was down during peak season 2020, online retail was up dramatically… as expected. This year promises to be better on both fronts, forcing omnichannel retailers to allocate budgets and attention accordingly.
Preparing for Peak 2021 was already a big lift. There was enormous uncertainty coming out of 2020 regarding how long the pandemic would last and what effect it would have on shopping behaviors moving forward. As a result, many omnichannel retailers have been hesitant to go all in on major eCommerce investments. Now, though the future is becoming clearer, it’s too far into the year, and too close to peak time, to implement anything more than a minimum viable plan.
The challenge isn’t just the scale of the resources required, but the ability of the resources to scale. Unlike the physical store model where staffing is the primary consideration in preparation for the peak rush, omnichannel operations require staffing as well as systems that are capable of scaling to meet demand. There is no practical way to implement such systems incrementally; either you have an end-to-end operation, or you do not. Under-provisioning any part of the chain becomes a choke-point that constrains the entire operation.
Investment in the required eCommerce systems may make economic sense now, but there are additional hurdles in the way. For example, warehouse space is at a premium and it is increasingly difficult to find space for dedicated DTC eCommerce operations. Even if you can find space, it would be a stretch to build out the automated systems necessary for sophisticated eCommerce operations before the Q4 rush.
This is inspiring even those retailers who had not planned on it to consider outsourcing omnichannel operations now.
Identifying a suitable BPO provider
The biggest barrier to outsourcing eCommerce operations is identifying a provider who can be trusted to handle a company’s brand and their customer experience. The chosen provider needs to be able to answer the following questions to a retailer’s satisfaction:
Can they scale up?
Since this is the real problem that outsourcing is meant to solve, it should require the most evidence in the form of past performance and demonstrated current capabilities. As stated above, eCommerce infrastructure must always be capable of handling peak volumes regardless of how often peak volumes come, not just during the holiday rush.
And, since outsourcers have multiple clients, your chosen BPO must be able to prove to the retailers that their capacity is not spread too thin.
Can the eCommerce BPO integrate with your stores’ operations?
Even if the digital piece is outsourced, it cannot be siloed. One of the strengths of a digital-first omnichannel model (versus digital-only) is the ability to fulfill orders according to a customer’s preference. This includes drawing on different pools of inventory as well as different points of fulfillment.
The need for such integration is often what inspires outsourcing in the first place when a retailer can’t give the digital component the necessary resources. A quality eCommerce BPO must be able to fulfill eCommerce orders – at scale – while giving the stores complete real-time transparency into stock levels and locations. The BPO should enable store fulfillment (curbside pick up, buy online pick up in store (BOPIS), ship-from-store) solutions that have become a key component of most omnichannel retail scenarios.
Will they protect the brand and customer experience?
The “brand” is arguably the single greatest asset an omnichannel retailer possesses. And anxiety about outsourcing any part of a retailer’s operations usually revolves around the risk of jeopardizing the brand’s image and the customer experience. Many outsourcers can conduct eCommerce operations the way they know best. There are very few that can properly honor the brand and meet a loyal customer’s expectations.
A BPO pro can demonstrate the ability to disappear inside the brand, supporting the retailer’s operations transparently to customers as “the brand behind the brand.” Their fulfillment operations should be flexible enough to process a brand’s orders in ways that distinguish it from other brands. If customer service is a part of the BPO’s mandate – like shoppers’ assistance or managing disputes and returns – they should be able to demonstrate a history of delivering appropriate customer service solutions for retailers of a caliber similar to yours.
Are they where you are?
While it’s not critical that digital operations share a zip code with the stores, the best customers think of these retail brands as close-by. Even if a BPO’s major distribution centers are geographically dispersed, they should be able to execute alternative fulfillment solutions (like pop-up distribution or micro fulfillment centers) if required, particularly during peak volume periods. And, as mentioned above, your eCommerce BPO should provide the necessary integrations to enable fulfillment from your brick-and-mortar locations if that is part of your model.
An eCommerce BPO that delivers
If you are looking ahead to peak season with a technology to-do list, without an existing omnichannel infrastructure in place, there may be an outsourcer in your near future. This isn’t a failure. In fact, as noted above, many retailers are realizing the benefits of this route, especially after their experience in 2020.
By asking the right questions, you can find an eCommerce BPO to help ready your omnichannel operations for the fast-approaching peak season. With a proven track record and experience-based industry knowledge, PFS is prepared to answer all of your omnichannel eCommerce questions for the upcoming 2021 peak season. Get in touch with us today to learn more about why we’re the BPO of choice for brand-centric omnichannel operations.