Omnichannel in retail has transformed from a buzzword to an essential part of conducting business.
Vendors and retailers previously have used the term to signify any other channel of retail beyond selling at a store. However, the editors at Digital Commerce 360 have tried to narrow the meaning to discuss the integration of online and stores sales at retail chains.
Even this notion may also soon be dated. For example, omnichannel retail is an important part of Warby Parker, a digitally native eyewear brand, which launched in 2010 and now has more than 100 stores. Omnichannel is a core part of its operations, co-founder Dave Gilboa said at the 2018 Internet Retailer Conference & Exhibition. And transforming into an omnichannel retailer from a born-on-the-web brand looks a lot different than being a traditional omnichannel retailer or a legacy chain integrating online operations.
Even Amazon, once just a web-only giant, is an omnichannel merchant, with dozens of book stores, a few “4-star” stores with top-rated products, thousands of pickup lockers, a handful of Amazon Go convenience stores and hundreds of Whole Foods grocery stores.
Store and online operations have merged even more in 2019. Here’s a quick recap of omnichannel trends in 2019.
More digital natives open stores
Like Warby Parker, more digital natives have started opening physical retail stores in 2019, with plans for more store openings in 2020.
Digitally native vertically integrated bedsheet brand Boll and Branch, for example, secured a $100 million investment from private equity firm L Catterton in August to catapult its plan for stores into reality.
The retailer, which currently has a single store near its New Jersey headquarters, wants to have more than 10 stores operating within the next few years, says Scott Tannen, Boll & Branch founder and CEO.
Similarly, mattress retailer Saatva Inc. opened its first store in December 2019 and plans to have a dozen or more stores in major markets in the next 24 months and up to 20 stores within a few years after that, says Ricky Joshi, co-founder and chief strategy officer.
Warehouse operations shift to accommodate omnichannel
With more shoppers buying online, retail chains are looking to have a single view of their inventory—both in warehouses and in stores—to more efficiently fulfill both store and online orders. However, for an ecommerce site to have visibility into what inventory is at the store, online and store back-end systems have to talk to each other. This often means time-intensive and costly upgrades.
Many large retailers have discussed their warehouse and inventory management technology upgrades with Digital Commerce 360 in 2019, including both Urban Outfitters Inc. (No. 46 in the Top 1000) and Lucky Brand LLC (No. 712).
Lucky Brand overhauled one of its two distribution centers to handle both online and in-store inventory.
Having a combined distribution center will make its operations more efficient because it will reduce split shipments, says Michael Relich, Lucky’s chief operating officer.
Urban Outfitters already has a combined distribution center, and it updated its warehouse management system to make it even more efficient. The system prioritizes orders that its warehouse system picks and allows it to pick orders for stores and ecommerce orders simultaneously in the warehouse.
With the upgrade, Urban Outfitters increased its order throughput by 32%, which means the distribution center ships orders 32% faster on average from the time they enter its system to the time they leave the distribution center, said Mike Sparks, manager of supply chain systems and information technology at Urban Outfitters.
Pushing further with curbside pickup
Retailers that have long mastered buy online pick up in store are now working to make the pickup process even more convenient for customers.
And that means curbside pickup, or when a shopper orders online, drives to a store and a store employee brings the shopper’s order out to the customer without her leaving her car.
Target, Walmart and Nordstrom have offered curbside pickup for at least a year and have continued to roll out the programs in 2019. Walmart, for example, has 2,700 Grocery Pickup locations.
In Target Corp.’s third quarter 2019, curbside delivery fulfillment volume increased more than 500%, and it has 800 more Target locations offering curbside pickup compared with Q3 2018, the retailer says. Fulfilling online orders with curbside is more cost-effective for the retailer than to ship them, Target says.