Best Practices in Strategic Multichannel Fulfillment

Multichannel retailing is growing explosively, moving proactive retailers to reinvent the role of traditional stores and fulfillment. Walmart, for example, is experimenting with smart phone checkout, while Macy’s offers in-store customers the ability to have items delivered from a different location when not available at the point of purchase. Getting fulfillment right is much more mission-critical in a multichannel setting compared to a traditional brick-and-mortar one.

Multichannel fulfillment leaders follow three core fulfillment-related practices: 1. Define customer strategy and fulfillment solution simultaneously (and iteratively). Establishing a clear vision of the customer promise is the first step to breakthrough fulfillment. Promised delivery speed, by category, dictates many distribution-network and store-role requirements. 2. Harness flexible, “no-regrets” fulfillment-solution activation. Built-in flexibility must allow for the evolution of target customers, products, speed, etc. A “no-regrets” fulfillment build-out ensures adaptability and helps stage the development of the system over time. Fulfillment leaders can help ensure solution agility by using external partners (e.g. third-party logistics providers). 3. Use metrics and incentives aligned with multichannel fulfillment. Multichannel financial incentives should be established, and the adoption of shared financial performance across channels is a must. A balance must be struck between growth and profit, and leading multichannel key performance indicators should be defined, as they track fulfillment-system success more proactively than financial metrics.