Published November 27, 2018
Those who consider price only or as main factor in their logistics selection process are doomed to mediocrity and perhaps even failure.
As both online and offline retailers are pulled further and faster into a future where consumer demands are steadily increasing and customer experience is paramount, the need for advanced logistics solutions delivered seamlessly across all channels not just by providers, but by true partners, will only continue to increase.
More importantly is the ongoing evolution of what was traditional Third Party Logistics providers, simple providers of basic logistics services, into the emerging Unichannel Logistics Partner.
Many in the industry use the term Omni-channel, so why do we now need something called Unichannel? According to Jim Tompkins, CEO of Tompkins International and MonarchFx, about three years ago we progressed to Omni-channel where we integrated the operations and the inventory across channels to have a more integrated operation. Now comes Unichannel, the unified channel. The Unichannel is a model that recognizes that “e” customers do not exist and in-store customers do not exist. All customers are customers and our focus must be on an integrated seamless customer experience without any channel differentiation.
Unichannel is the integration of supply chains across channels to support an Omni-channel customer experience.
As the name implies, Unichannel Logistics Partners become part of your business vested and invested in your success both literally and figuratively as a close advisor, with best of breed technology, network design, automation, inventory management, and deployment capabilities; working with you as a trusted partner to transform the business in the face of growing customer experience challenges.
The very nature of creating a Unified Customer Experience means getting closer to the customer. Products will need to be deployed closer to the end consumer in order to rapidly meet customer needs.
The great news is that deploying inventory closer to customers not only shortens delivery lead times, it has been demonstrated to also increase sales. Achieving Revenue Gains from Distributed Logistics: The Value of Inventory Proximity to Customers, written by Gene Tyndall, Alex Baker, and Stephen Timme, provides greater detail on this important sales phenomenon.
What does the Unichannel Customer Experience look like?
Individually, online and offline retailers will find themselves challenged to put such a network in place, and even those who attempt to do so will find they do not have enough volume in regional centers to justify the automated fulfillment systems required to most rapidly and cost effectively pick, pack, and ship both customer and store orders.
This is where the role of logistics solutions that can consolidate multiple customers into the same regional operation becomes clear, as this methodology provides sufficient volumes to justify the investment in shared automated fulfillment systems. In short, going forward online and offline retailers need to expect more from their logistics partners.
More specifically, the need will be for supply chain operations that are multi-client, one focus, regional networks, with environmental stewardship.
Just as it sounds multi-client is creating shared use facilities housing multiple clients in the same operation. This leads to a number of benefits:
- Capacity and space flexibility to scale logistics facility space up and down
- Flexible cross trained staff increased for peaks and decreased during slow periods
- Shared management team and redundancy
- Available fulfillment automation and robotics (order assembly and sortation)
A singular focus on what the customer wants and needs. Unichannel is allowing your customers to effectively access, research, and purchase your products in any manner they choose via PC, mobile, tablet, kiosk, virtual store, or in-store. Also, giving customers the option to have the product delivered to them or available for pick up, when and where they request. Important service needs and potential benefits are:
- Rapidly service both store and direct to consumer demand
- Provide both case and each picking as needed
- Distribution center inventory reductions as combined demand
- Store inventory reductions due to rapid replenishment
Unichannels are enhanced by their proximity to customers. The only way to do this from a product, logistics, and delivery perspective is to operate fulfillment centers in local regional markets.
Depending on your customer experience objectives both the U.S. and Canada could be effectively covered with two to four locations. If increased up to eight or more locations same day delivery could be accomplished nationwide. The benefits of regional networks:
- Supports rapid service for Unichannel deliveries
- Enhances customer experience, direct-to-consumer
- Improved store in-stock due to frequent/rapid deliveries
- Supports store size/inventory reductions
- Drives increased sales due to proximity to customers
The consumer backlash is building. Those who continue to ignore and delay committing their company to more environmentally sustainable operations will ultimately pay a price at the hands of consumers. One of the most exciting revelations to come from the study of regionalized Unichannel logistics, is that in addition to providing better customer delivery experience and being more environmentally friendly, this type of network also drives significant transportation savings and increased sales.
When it comes to the carbon footprint of logistics networks, regional multi-client operations are best. The benefits and opportunities:
- Regional facilities reduce transportation component based on increased local ground deliveries
- Nearly eliminates need for air transport long distance package delivery (worst possible impact on environment due to altitude of emissions)
- Multi-client returns/recycling/collaboration programs can be implemented at scale
- Automation utilizing energy efficient equipment is more affordable due to increased utilization in multi-client regional facilities
Third Party Logistics began as a simple ‘pallet in’ and ‘pallet out’ public warehousing approach in the last century. As you can see the evolution has accelerated quite dramatically over the last 25 years with the increased focus being on fully integrated supply chain solutions across all channels.
Retail is now facing its own revolution driven by multiplying technological customer touch points and a widening array of customer focused product acquisition prerogatives, many of which can be most effectively solved through regional multi-client logistics solutions.
The winners in our rapidly emerging Unichannel bricks and clicks future will be those retailers and eCommerce sellers who understand the benefits by making the choice to work directly with a progressive Unichannel Logistics Partner.