The number of small parcels that flows between retailers and consumers has skyrocketed in recent years. As much as half of the purchases made during the 2015 holiday season, for example, were made online, sending UPS to deliver 650 million packages, a 10.3 percent increase over the year before.
In addition, more and more consumers use mobile applications to place orders. If you also add international consumers who take advantage of new channels to shop around the world without leaving the comfort of their living room, the effect on shippers, carriers, and logistics companies is nothing short of transformative.
“Retail is being re-invented in real time, with order fulfillment rapidly moving from fast to faster to right now,” Bruce Carlton, president and CEO of the National Industrial Transportation League (NITL), a shipper association that includes all transportation modes, tells Inbound Logistics.
So how do companies rise up to meet the omni-channel challenge?
Let’s return to the article in Inbound Logistics and the stories of three big-name retailers:
Hudson’s Bay Company: With a portfolio of high-profile stores like Saks Fifth Avenue, Saks OFF 5th, Hudson’s Bay, and Lord & Taylor, and with 65,000 employees worldwide, HBC is one of the fastest growing department store retailers in the world. E-commerce is “huge” for the company and is expected to grow even more over the next several years.
To speed up the distribution process, HBC has invested in technology such as automation and maintains both brick-and-mortar stores and dedicated facilities for e-commerce fulfillment in North America. Focus lies on agility and being able to quickly adopt to seasonal peaks and valleys as well as unexpected hits or failures.
Sears: An integrated retail model is the secret to the effective omni-channel fulfillment of Sears Holdings Corp. Built on the use of technology, strategic partnerships with transportation service providers, and integrated planning to maximize all assets, the model leverages retail locations for speedy fulfillment and cost savings.
Bill Hutchinson, president of supply chain for Sears Holdings Corporation, explains:
“The difference between our supply chain and others is the process that we use to determine where our orders are filled. We use a sophisticated system that looks at our in-stock position in certain markets. It evaluates the cost- service trade-off of certain products by dimensional weight factor or freight cost, and then makes routing decisions of where to fulfill that order.”
Kohl’s: Just like Sears, which has tried to marry the online and in-story shopping experience ever since the launch of “Buy Online, Pick Up in Stores” more than a decade ago, Kohl’s Department Stores also offer many options for both types of shoppers. The growing online business is supported by Kohl’s store chain, distribution center, e-commerce fulfillment centers, and direct ship partners who fulfill orders from the company website.
Hutchinson sums up what everyone in the end is trying to accomplish:
"Proximity is key. We are able to fill orders closer to the customer, reduce logistics costs, and cut delivery cycle time.”