Organizations, particularly resellers, spent years building the best omnichannel capabilities on the planet. As trucking jobs rise to become the saviors of higher demand during disruption, the economy still suffers. This is an unforeseen era that upended all prior expectations. All signs indicated the future was based on the channel capabilities, creating a seamless shopping experience from brick-and-mortar stores through e-commerce. However, the disruptions caused by COVID-19 triggered a sudden fear of loss and poor omnichannel risk management. During the initial creation of this blog, that was the idea. Now, omnichannel is more important than ever as organizations and governments look to radically and swiftly reopen nonessential businesses, provided they can offer curbside services and contactless options. Let’s take a closer look at the state of omnichannel risk management strategies in response to the disruption and how omnichannel integration continues to prove valuable throughout crises.
Shipper of Choice & TMS: How a TMS Makes Shippers’ Freight More Attractive
Did Retailers Get Something Wrong With Omnichannel Risk Management
Retailers that felt the tensions of competition started massive overhauls of supply chain processes and the ability to offer omnichannel experiences years ago. According to a 2017 Harvard Business Review article:
“Retail sales through digital channels (including mobile sales) increased by a massive 23% in 2015. Much of these gains have gone to online retailers. Amazon is the biggest beneficiary, now accounting for 26% of all online retail sales. What is more, as it continues to expand aggressively into new categories like grocery and fashion, Amazon’s existential threat to traditional retailers is greater than ever. Just ask Alexa.”
That’s right. Omnichannel might have been an obsolescent business model, and when initial stay-at-home orders were enacted, omnichannel was replaced with nothing. Businesses suddenly found themselves in an essential versus nonessential mindset. While most businesses would like to think their services and products are essential, it boils down to a level of necessity. For companies that sold groceries, pet supplies, and similar essential products, the business model changed to reflect a safe distancing environment. As the country moved weeks into the COVID-19 crisis, unrest resulted in the form of protests across the country. Governments are working on plans to reopen the economy, and in some states, nonessential businesses can return to work if they can offer a curbside or delivery option.
Omnichannel Strategies Are Ideal for Difficult Environments
When the current disruption began, nonessential businesses were forced to immediately furlough workers and hope for the best. Then, the solution arose by leveraging the facts to support continued operation. These facts point to the ability to maintain safe distancing measures and enable remote workers to work. In such fashion, major retailers made the successful jump to embrace lackluster omnichannel order fulfillment under a pseudonym. In fact, what does omnichannel fulfillment really mean? Put simply, omnichannel fulfillment refers to the ability to give customers an online buying experience and eliminate the need to visit a brick-and-mortar store.
Okay. That’s the basic premise of all e-commerce transactions, but it becomes omnichannel when customers develop the willingness to visit brick-and-mortar stores to pick up their orders instead of delivery. It is important to note that this is not the same as a by online pick up in-store (BOPIS) option. Instead, it is more of a buy online and pick up outside of the store fulfillment model. Contact between consumers declined. Retailers see the benefits of continued success and profitability, and everyone wins. In fact, USA Today reported that several major retailers that did not fit the essential criteria would begin offering curbside pickup options to curb the effects of the novel coronavirus. Such companies include Kohls, Best Buy and Dick’s Sporting Goods.
As a result, omnichannel took on a new form—omnichannel risk management—allowing for business continuity despite disruptions. In this circumstance, omnichannel was not the consumers’ preference, but it was the solution.
What Should Businesses Do Now
That’s a tricky question. E0commerce soared 52% year over year in the U.S. and Canada from March 22 through April 4, 2020, reports Digital Commerce 360. Such gains are indicative of a new value in omnichannel. Regardless what official orders say, consumers took note and took to the internet. Delivery and curbside are up across all industries. There has never been a similar surge in demand. For businesses, these added revenues might keep the lights on for now, but they are rapidly on the way to becoming the new normal. I’m not predicting that the industry will stay closed for long, but if the coronavirus does return, the measures taken to offer curbside will enable business continuity. So, what are the next steps? Shippers need to improve their fulfillment capabilities, including gaining more insight into demand forecasting, leveraging data and automation to speed replenishment, using connected systems, such as an integrated TMS, to recognize when problems might arise, and continuously applying data to improve operations throughout the supply chain.
Omnichannel Risk Management Is the Best and Biggest Strategy for Success
Disruption is hard on all businesses. Unlike the disruptions of the past, this disruption triggered a faster evolution and deployment of omnichannel capabilities. Companies that already invested in omnichannel were in the best position to scale it to meet demand. Those that withheld upgrades struggled to stay afloat, and the casualties of economic fallout are mounting. According to Reuters, Neiman Marcus is expected to file for bankruptcy within the week. That behemoth did not survive, and for companies that do not act now to offer easy, accessible, and affordable curbside service—the fundamentals of omnichannel—their fate will be similar. Do not take that chance. Bring your systems into harmony with the omnichannel supply chain—it will save your business through this disruption and the next.