All too often we hear about retailers telling us about the commercial and legacy constraints for competing in today's dynamic multi-channel world.

As environmental factors and fast, convenient e-commerce increasingly keep consumers in their seats, the landscape is becoming even more competitive. 

The industry has spent the past couple of decades trying to get to grips with costly logistics and an increasing 'I want it now' consumer for distance shopping and the race to shorten click-to-customer cycle time is arguably the single greatest influence on the shape of future omnichannel supply chains. 

Needless to say, the bar continues to rise for retail and direct-to-consumer brands.

Today's generations know nothing other than the free to access, free to use, lo-cost, no-cost digital world that many from previous generations still find somewhat bewildering -especially in multi-channel retail.

But a brands position on the environmental issues facing not only today's customers, but also those of tomorrow must continue to be a key part in the sustainability conversation.

52 percent of millennials say that they always research background information before buying goods or services, compared with 45 percent of Generation X consumers and 41 percent of baby boomers.  

"Given the high and rising costs of omnichannel order fulfillment, roughly 10 to 20 percent of sales in omnichannel retail, retailers are faced with tough decisions as they work toward improving delivery speeds profitably". 

Should they continue to build, should they partner, or can technology help unlock value in the speed equation where infrastructure and operations fall short?  

The commercial digital world we live in is always in a state of flux, change is inevitable and based on my experience change (positive/negative) happens as a result of changes in behaviour combined with a business that's lost it's 'WHY'!.

Customers, particularly younger ones want to know what the companies they engage with are doing for, with, and to the world. 

Nine in ten Generation Z consumers believe that companies have a responsibility to address environmental and social issues. Younger people think that environmentally and socially focused companies are better prospective employers, and the vast majority say they would be more loyal to companies aligned with those values.

Companies that don't invest time, effort, and resource to keep pace with the dynamics of change tend to be the losers in the world of commerce.

To combat these challenges at least partially, most omnichannel retailers already use their stores for fulfillment or pickup. 

There are clear benefits to using stores, for example, enabling greater overall inventory productivity, quickening speed to customer, and avoiding markdowns. While these benefits can be meaningful, challenges still must be overcome:

  • Inventory accuracy. Stores generally have lower inventory-accuracy rates (70 to 90 percent) than distribution centers typically enjoy (more than 99.5 percent).
  • SKU complexity. When the online assortment includes channel exclusives, endless aisles, and even third-party products, minimising margin-eroding split shipments across the network becomes challenging.
  • Demand forecasting. Positioning inventory across distribution centers, various store types, and market fulfillment centers remains a struggle for most retailers; in fact, of all the levers to help retailers solve for speed to customer, accurate demand forecasting and distributed-inventory placement may have the greatest impact outside of network changes. 
    • Picking costs. While there are exceptions, for a majority of retailers the cost of in-store picking is much higher—typically 1.5 to 2 times higher on a cost-per-pick basis—than picking at distribution and fulfillment centers.
    • Execution quality. Stores weren’t designed with fulfillment in mind, nor are they necessarily staffed or equipped with the technology to do so at scale. Particularly during peak times, it’s hard for most stores to manage exceptions, ensure accurate picks, and tightly control cycle times to customers—all of which are important to a great customer-delivery experience.

So what’s the next move for retailers? How do they overcome these challenges and provide faster fulfillment and better overall customer experience? 

What 'social' strategies are they deploying to help educate, inform, and convey a relatable and sustainable conversation with today and tomorrow's consumer?

What you were great at yesterday will no longer be a strategy for the future.