What is Omnichannel Distribution: Types and Challenges Explained
Definition of Omnichannel Distribution:
Omnichannel distribution is a multichannel approach taken by companies to give customers a way to purchase and receive orders from several sales channels with one-touch seamless integration.
A company needs to think of their omnichannel distribution strategy from both a customer purchase and possible customer return, which are often referred to as forward and backward distribution services.
Six Types of Omnichannel Logistics
- Buy online, then pick-up at the brick and mortar store.
- Buy online, then have it delivered to the home or another location.
- In store purchase, with the delivery either to the home or another location.
- Drop ship from a warehouse or manufacturing center to store, home or other location.
- Buy online, then return at store or online.
- Buy online, then return online.
The goal of omnichannel logistics strategy so many companies are moving is to reduce costs, improve transit and delight the customer.
Implementing an omnichannel distribution often leads to revenue growth as customers are more likely to spend more online than in brick and mortar stores.
Additionally, the brand loyalty increases from omnichannel distribution because of the seamless consumer usability, leading consumers wanting to come back for more.
It is important to note the differences between multichannel and omnichannel.
Multichannel distribution focuses on providing ways for customers to purchase online and brick and mortar locations, which is similar to omnichannel.
The main difference to note between the two strategies is omnichannel has a “one-touch” integration, which allows for customers to buy in-store, online, or both, from a single point.
Challenges Companies Have with their Omni-Channel Distribution
- Lack of Inventory Visibility
- On-Hand and In-Transit
- Segmented Supply Chain Technology
- Channel Specific Processes
- Optimizing Freight Rates for Best Cost and Transit
- Reverse Logistics
For more on how to improve your supply chain:
- Logistics and Supply Chain Comprehensive Guide
- Supply Chain Cost Saving Guide
- Video: Overcoming Logistics and Supply Chain Challenges