It’s Time for All Retailers to Go Hybrid
Marcia Brey is vice president, distribution, with GE Appliances, a Haier company.
Distributed fulfillment means utilizing a nationwide or global network of warehouses and fulfillment centers to bring inventory closer to potential customers, as opposed to shipping from one to two centralized locations. While this supply chain model creates more complexity and room for error, tech companies have come to the rescue with powerful software that integrates virtually every aspect of getting a product from the online store to the customer’s door.
Companies have found enormous success using predictive analytics and machine learning. These tools intelligently allocate inventory across networks to avoid stock-outs, reduce miles traveled, and decrease delivery time, cost, and environmental impact.
To understand the power of a distributed fulfillment network, consider that distributed fulfillment services can prioritize ground transportation and achieve a two-day shipping standard anywhere in the United States. That’s receiving an order, picking, packing, and shipping using trucks, cars, bikes, or scooters anywhere within 3.797 million square miles…in less than 48 hours.
As shoppers slowly regress to in-person shopping habits, retailers have taken the opportunity to roll their customer-facing storefronts into this distributed fulfillment network, creating a hybrid model for traditional brick-and-mortar stores. The front end handles in-person shopping, while the back end receives and handles online orders from nearby customers.
Notorious for their prolific real estate footprint, beauty and fashion brands are the first to move into this new hybrid model. Using nothing but a mobile device or tablet, a label printer, and some state-of-the-art software, these companies can seamlessly leverage their storefronts as another node on their fulfillment network.
For convenient purchasing options, sales associates now rely on tools designed to streamline back-of-house operations, like buy online, pickup in store (BOPIS). They can also handle returns of online purchases.
For inventory management, artificial intelligence analyzes customer shopping behavior to predict where demand will be highest. It then identifies fast and inexpensive transportation routes, and product allocation happens with the click of a button.
For added resiliency, fully integrating supply chains—from e-commerce platforms to shipping carriers to in-store point-of-sale systems—allows these hybrid companies to analyze and troubleshoot weak points in their fulfillment supply chain.
Shipping and logistics companies already see the adoption of hybrid storefronts trending upward into 2022. It’s about time all retailers go hybrid.
Where e-commerce and online sales allow for optimization, traditional
brick-and-mortar storefronts allow retailers to provide additional purchasing avenues, promote their brand, and engage with their customers. This emerging hybrid model brings together the best of both worlds, while automation and software remove challenges and empower this otherwise complex fulfillment model.