June 22 2014 07:51 PM

    Omni-channel is the newest buzzword in the supply chain world. But unlike previous “hot new things,” omni-channel has the potential to deliver on its promise. This article is the first in a four-part series aimed at providing shippers with an understanding of the benefits of an omni-channel strategy and actionable recommendations to help them develop and implement a strategy that both meets their specific needs and achieves exceptional results. In this initial article we will be introducing the concept of omni-channel and presenting some concepts around the customer experience that lie at the heart of the model. 

    Given the hype surrounding omni-channel, confusion abounds about what exactly omni-channel is. Generally speaking vendors only intensify this confusion and twist the definition to align with the products and services they sell. At its heart, omni-channel is about providing a seamless experience to the customer, removing both the perception and the reality of the company’s channel silos, and providing a flawless customer experience. It sounds simple on the surface, but done correctly, omni-channel is an incredibly complex (and rewarding) endeavor.

    When many of us were growing up, even the largest retailers had two channels: store and catalog. You could go to a store and hope they had what you wanted. Or, you could browse a catalog, find what you were looking for, place an order, hope the item was still in stock, and (if you were very lucky) receive your item in eight to twelve weeks. Ponder that for a moment, and compare it with where we are today. If we assume the average delivery time from point of order was 10 weeks in 1975, we have reduced time to delivery by over 97% in just a few short decades. Today we press a few buttons on a mobile device, and our product arrives at our door the day after tomorrow, or in some (admittedly rare) cases, later today. These are the transit time expectations today, and transit times are only the beginning. What about when the item you wanted wasn’t in the store? Worse still, many times you would place an order with an enclosed check (if you’re too young to know what a check is, I can’t help you) only to receive a call three weeks later telling you the item was out of stock. This may seem like ancient history, but there are analogues of this going on even in today’s tech-filled world.

    So omni-channel is about e-commerce and transit times? In part, but it’s really about the overall customer experience. Historically, retail fulfillment has been about the capabilities of the seller. Today it is all about satisfying the desires of the buyer devoid of channel boundaries. In the rush to take advantage of the opportunities of e-commerce, many retailers have lost sight of the value of their hard assets. According to a recent MIT report, $1.1 trillion in store sales are influenced by the web. So, it is how the channels work together that can boost sales, not how one channel outperforms another at any given time. Put more succinctly, it’s making the various channels the organization pursues fuse to function as a single, seamless channel. Obviously this is not a simple knot to untie. There are a lot of issues to resolve; technology, purchasing, inventory, transportation, training and culture, etc., etc., ad infinitum. Each of these elements contains its own tangle of interconnected challenges. At first glance it can seem insurmountable. But if you approach the problem in a logical, incremental way, it can be done. 

    By now you should see that omni-channel is not just a pie in the sky concept; a strategy reserved for the biggest retailers in the space. Rather it is a critical component in the future life of every retailer. For now I will leave you with a few questions to ponder:
    • Do your infrastructure and processes support having the right product, at the right place, at the right time, at the right price?
    • Do you give your customer the fulfillment options he/she desires, and do the costs of those options align with his/her price sensitivity and your cost?
    • Are you managing customer service and returns in a channel-agnostic fashion?
    • Are you leveraging all of your assets (DC, warehouse, store, technology, etc.) to their greatest value?
    Stay tuned for the July/August issue to read Jim Brownell expound on the five pillars of omni-channel.

    Joe Wilkinson is Director, Contract Analysis & Negotiation for envista. He can be reached at jwilkinson@envistacorp.com

    Joe Wilkinson is Director of Transportation at enVista, a leading supply chain consulting and IT services firm, delivering innovative solutions that improve profitability, enhance customer service and reduce waste from source to consumption. For more information, visit www.envistacorp.com, or contact Joe directly at
    jwilkinson@envistacorp.com or 724-315-0024.