If the COVID-19 crisis has reminded us of anything, it’s that change can be as unpredictable as it is inevitable. Consider the rapid and continuing rise of the omnichannel and e-commerce fulfillment world. Today, manufacturers must be prepared to engage customers whenever and wherever they want: from your branded website to online marketplaces such as Walmart.com—and from digital channels including daily deal and flash sales sites to non-digital channels such as direct response TV. And of course, traditional retail storefronts like your neighborhood Walmart are still king of retail sales.
To add to this growing complexity, consider the impact of the coronavirus. As storefronts shuttered months ago, shoppers turned to the Internet. Today, online sales continue to surge. According to Signifyd Inc., an ecommerce security and fraud prevention firm, ecommerce sales were up about 40% for the week of May 26 – June 1 compared with February 24 – March 1, the last week before the pandemic began.
Even while brick-and-mortar stores are reopening today, the trend continues to move toward online shopping. Consumer engagement with these stores is changing, as ordering online and picking up curbside is becoming part of “the new normal.”
In fact, buy-online-pickup-in-store (BOPIS) sales increased 248% at the end of May, compared to before the pandemic. Retailers such as Walmart are ahead of this emerging $35 billion market, with plans to serve grocery customers living near 3,100 stores by the end of 2020. After the pandemic has passed, analysts are predicting that the popularity of BOPIS will continue, because it’s convenient for consumers.
What can you do to continue meeting consumer demands through such unprecedented change? How can you maintain the continuity of your brand experience, no matter what?
Your “insurance policy” for the unpredictable.
While sales channels may be fragmented, your fulfillment center strategy doesn’t have to be. With so many ways that customers engage with your brand, you may believe the best supply chain solution for order fulfillment is to allocate and store inventory separately for each sales channel. By dedicating inventory this way, you’re sure to meet customer demands—right?
When you take this approach, you could have dozens—or even more—separate inventories scattered across the country. For example, you may have some inventory at Walmart.com, some at Amazon.com, some at other digital marketplaces such as Wayfair.com, some at your fulfillment company and so on.
What happens when one of these sales channels underperforms and products sit unsold? What if another sales channel overperforms and not enough products are available to fill all the orders?
The COVID-19 pandemic created an extreme example of such risk. While brick-and-mortar stores were shuttered, inventory sat on shelves inaccessible and collecting dust. Meanwhile, online sales exploded—and there were inventory shortages that made fulfilling these orders in a timely way difficult.
Pandemic risk aside, the challenge still remains. For example, if sales at a particular digital marketplace are lagging, you’re tying up inventory that could be better allocated elsewhere.
In short, you don’t want to allocate and store inventory separately for each sales channel. When you do, you’re in effect “omni-splitting” your inventory. No one has the crystal ball to accurately predict precisely what level of inventory will be required for each channel at all times. So you could easily have too much inventory dedicated to one channel and not enough for another.
When you spread your inventory too thin, you’re creating unnecessary risk. If products aren’t immediately available for a particular channel, there could be delays in delivery—which would negatively impact customer expectations and your brand experience.
How can you help mitigate this risk—essentially, swapping a crystal ball for an “insurance policy” to safeguard your brand experience?
Centralize your inventory.
Imagine having full visibility of and control over your entire inventory at all times. When you see sales surge in one sales channel and lag in another, you can reallocate your inventory accordingly. No more assigning inventory up front based on intuition or guesswork—but on actual sales need.
This is the power of centralizing your inventory within a single fulfillment network. Products can easily be moved to where the sales are, helping to improve inventory turns and contain carrying costs. You’ll be in a better position to account for fluctuations in channel sales volume based on such factors as seasonality and product promotions. And, you’ll also be better prepared to proactively address unforeseen challenges such as COVID-19.
Your inventory everywhere—all from a single source
TAGG Logistics is built to maintain the continuity of your brand experience, no matter where and how your customers engage with you in the omnichannel marketplace. With the acquisition of LeSaint Logistics, we have a nationwide network of 25 fulfillment and warehousing facilities. That means you can store your inventory wherever your sales are today. And just as important, make inventory adjustments as your needs change over time.
The latest addition to our growing fulfillment center network is a 640,000-square-foot facility in Memphis, Tennessee, which is dedicated to serving the omnichannel sales needs of a major CPG (consumer packaged goods) manufacturer of some of the world’s leading brands in its category. Our fulfillment centers in St. Louis, MO and Chicago, IL also pose great opportunities for a centralized, coordinated approach for omnichannel inventory needs.
This is about keeping Your Business EverywhereSM in times of change. That goes beyond having the technology, processes and expertise to deliver cost-effectively and on time. And it goes beyond having the deep resources to stand up new facilities as our customers’ needs grow. No one can truly predict what’s next—but you can be ready for it. That’s why we’re here.