In the past, online fulfilment tended to occur in large, centralised facilities, where orders were picked and packed and collected by couriers for delivery nationwide. But delivery bottlenecks as a result of the increase in online shopping demonstrated the urgent need for a range of different fulfilment options.
Many retailers have started turning their store networks into mini-fulfilment hubs and opening ‘dark stores’ in city centres to facilitate faster delivery to local customers. And Bain & Co found that nearly 60% of retailers and consumer goods companies are planning to increase their investment in multiple facilities that can respond to online orders.
At the same time, customers increasingly want the option to collect online orders from stores, rather than wait for them to be delivered to their doorstep. McKinsey found that “buy online, pick up in-store” grew by almost 50% in the US during COVID.
One of the challenges of a distributed fulfilment model is the need for inventory accuracy and a good understanding of what inventory should be held where. Without this, retailers won’t be able to deliver on the promise of same-day shipping or rapid click & collect. Live inventory is essential for omnichannel functionality; you need to know exactly what inventory you have- and where.
Another challenge is the accumulation of higher total inventory levels in the network, which could lead to unsold stock and costly markdowns. Predictive planning and demand forecasting can help with this. With a unified inventory solution, every piece of inventory is available to be sold and shipped, no matter where it’s located. Unified inventory reduces ‘stuck’ or ‘distressed’ stock, by keeping it turning over.