How multi-channel logistics connects all forms of sales

Bastian Späth, CEO/Vorstand EIKONA AG
Delivery person with parcel trolley which should stand for multi-channel logistics

The focus is on the experience. At least when it comes to shopping. Manufacturers, retailers and consumers agree on this. Marketing and sales concentrate on concepts of customer centricity, placing complete focus on the customer. Logistics has long played a central role on this path to customer satisfaction: fast delivery shapes the shopping experience. The task of multi-channel logistics is to achieve this across all distribution options.


One inventory – many shipping channels. A definition of multi-channel logistics could be limited to this brief fact. Of course, without adequately explaining the complexity of the preceding trade or the necessary structures and decisions. In so-called everywhere commerce, i.e. trade at any time and any place, the sales channel loses its importance for companies and the shopping experience itself is more strongly linked than ever with fast availability of goods. This is why the hour has come for fulfilment service providers in retail logistics, who take over all tasks from procurement and warehousing to delivery. They enable suppliers to sell their entire portfolio through all conceivable distribution channels:

  • mobile apps
  • social networks
  • blogs/forums/communities
  • websites with online shops
  • e-mail
  • classic mailings
  • print media and catalogues
  • stationary shops

The many channels merely function as a communication path between the seller and the buyer. Organising the transport of goods to the customer quickly and without disruptions is the most important task of multi-channel logistics.


Multi-channel logistics centralises inventory management

Refrigerator, television or smartphone: customers have long been informing themselves about their desired products in all possible ways. With multi-channel sales, retailers and producers aim to ensure that their potential buyers can also make a purchase from them at any time. To guarantee a good shopping experience, the inventory must be kept up to date at all times. Therefore, inventory transparency is a task that can be fulfilled more easily and with less capital commitment via a central warehouse when replenishment is needed. For logistics service providers, however, the associated tasks are changing. They need to develop flexibly scalable processes that can efficiently handle both large and small quantities as well as strong fluctuations in demand. They should also develop logistics solutions in which they process orders for direct shipment to end customers immediately so as not to jeopardise a short delivery time. Orders with smaller quantities also place higher demands on picking. This should be possible for each individual order as well as for batch and multi-job processes, in a single execution or in several steps. At the same time, the demands on the reliability of the processes are increasing. Therefore, it makes sense to introduce error control via scanning and weighing. This makes it immediately obvious if the wrong products have been picked or if the quantities are too low. After all, all goods are registered in the warehouse management system (WMS) with extensive master data including dimensions and weights. The scan also clearly identifies them, and, with modern applications, the picker even sees a photo of the ordered goods, which confirms the selection or indicates an error.


Common logistics processes for different distribution channels

The biggest challenge in multi-channel logistics is certainly to organise shipping for business-to-business sales together with sales to end customers. In addition to picking in small or large quantities, the cooperation with transport service providers also differs fundamentally. In orders for wholesale, a shipment may consist of several packages with many individual cartons. In parcel transport, on the other hand, each unit already represents a separate consignment. A completely different procedure. Therefore, logistics providers must both document the transfer of liability in a comprehensible way and organise tracking and status communication transparently. Private recipients in particular have become accustomed to increasingly precise real-time forecasts (ETA) with map display in recent years. Another big difference in process requirements is for returns management. While the return rate in wholesale is low, consumers make extensive use of their right to return goods, often free of charge, with rates that can range from 30 to 50 percent, depending on the sector. In addition to the operational specifics, the service providers are also working on preparing order, picking and shipping data for evaluation with business intelligence systems, thus enabling conclusions to be drawn about buyer behaviour and efficiency potential to be tapped in order processing. This task has become more difficult for salespeople and logistics experts alike because order management and data analysis are no longer structured to the same extent by the sales channel.


Multi-channel logistics as the centre of customer-oriented sales processes

In order to make the sales experience even more pleasant for end customers, suppliers and service providers work together on cross-channel communication. In this way, they gain information about the needs and interests of their common customers across all communication channels, which enables them to process orders in a service-oriented manner. This even goes as far as enabling users to complete purchases they have started on any sales channel – and thus, for example, to pick up or return online purchases in stationary shops on site.


Fazit

Multi-channel logistics as the centre of customer-oriented sales processes

A high availability of goods – in e-commerce paired with fast and reliable delivery – is considered the most important criterion for a high level of customer satisfaction by retailers and online traders alike. Almost on a par with the attractive presentation of goods, multi-channel logistics has thus developed into an indispensable success factor in the retail landscape. A performance that is only possible through a fully integrated flow of information and error-free data processing. In this way, digitalisation has revolutionised the shopping experience locally and especially in online retail.


Bastian Späth
Bastian Späth
CEO

As a college-educated computer scientist, Bastian Späth understands how IT solutions are developed from the ground up. For more than 15 years, he has spent every workday collecting requirements, finding ideas, developing designs, setting up projects and getting them safely across the finish line.


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