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Retailers’ multinode strategies give consumers the options they want

With consumer demand on the rise, supply chains need flexibility and variety to meet the moment

Consumers are demanding more, and retailers that employ a multi-node strategy across their supply chain are better equipped to meet those needs, whether that is ensuring shelves inside stores are stocked appropriately or fulfilling e-commerce orders in one of the many possible ways. (Photo: Jim Allen/FreightWaves)

New research suggests e-commerce consumers are loyal to brands but not necessarily to the websites from which they purchase those brands.

Post-click fulfillment provider PFS surveyed 2,000 adults ages 18 or over in the U.S. Fifty-six percent said they didn’t have a preference about the website on which they bought their favorite brands. The survey, conducted by Arlington Research, found that free delivery and competitive/attractive pricing, at 34% and 30%, respectively, were the most important considerations for shoppers when deciding to make multiple purchases from the same brand or retailer.

For brands, these findings lend more credence to the “multinode” strategy of warehousing. Kamran Iqbal, commerce strategist for PFS, said that is one of the most important trends to emerge in the past two years.

“We have to go where the customer is, but the consumer today wants to have options,” he told Modern Shipper.

This includes ship from store, ship from distribution center (DC), buy online, pick up in store options and more. With the desire to have items shipped quicker, and brands selling product on multiple sites, the single DC strategy is now a thing of the past.

“[Brands] need to have a smart strategy around how they manage the nodes, how they manage the reduction of friction for consumers, and how they reduce the friction for their retail associates and warehouse operators,” Iqbal said. “Target is the best case of this strategy. They’ve enabled their whole fleet of stores to become fulfillment centers.”

PFS offer a cloud-based omnichannel fulfillment solution, Retail Connect, that helps retailers turn their brick-and-mortar stores into fulfillment centers. But PFS’ approach aids brands in meeting customers where they are. 

Watch: The changing retail supply chain

Iconic fashion brand L’Oreal is one of PFS’ clients, leveraging the company for a range of solutions, from customer services and financial services, to order fulfillment, e-commerce development, and platform support. As a result, L’Oreal has been able to receive online retail support for its range of brands across the omnichannel environment.

“E-commerce can come from anywhere, so you have to think about forecasting from point of sale,” Iqbal said. “There is a lot of intelligence that needs to be focused on getting this right.”

Complicating the fulfillment picture is the returns process. According to the results of the PFS survey, 21% of consumers expect free returns, 58% prefer multiple return options, and 43% said a bad customer experience will cause them to stop shopping with that retailer or brand.

Iqbal said that stock positioning has become a critical component of omnichannel success.

“A full end-to-end view of the supply chain is critical for this strategy to work,” he said. “The worst experience you can offer is yes, pick it up today or pick it up tomorrow, and when you get to the store, they don’t have it.”

Moving stock around and having visibility into inventory’s actual location is critical, he said, but it’s also important to understand the components of a successful direct-to-consumer program. That can include value-add services such as gift wrapping, embroidery and more to differentiate from the competition.

These types of services combined with convenience are winning strategies for consumers, the survey found. More than 8-in-10 respondents (82%) said convenience was important, and 56% said they agreed that retailers were getting better at blending the offline and online experiences into a seamless experience.

Going forward, Iqbal said the store is going to continue to evolve. While the survey found that 52% of consumers felt the brand experience is often better in store than online, 44% of respondents felt they received a more personalized experience online, including benefits such as personalized recommendations, sizing predictions and photo reviews.

Iqbal still thinks the store will play an important role, especially as technology allows more retailers to blend the physical and digital experiences.

“I’m really bullish on the in-store capability,” he said. “I think the store is going to serve a different purpose. ‘Showrooming’ is going to become important.”

Click for more articles by Brian Straight.

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Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected]