Key Distribution Strategies of Top Omni-channel Retailers

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It wasn't too long ago that companies painted clear dividing lines between their brick-and-mortar and e-commerce distribution operations and relied on a “never the twain shall meet” philosophy. Their respective divisions handled order taking, fulfillment, customer service, and returns; and software platforms were dedicated to one side or the other—rarely both. Given their own physical space and systems or outsourced to third-party logistics providers, e-commerce operations had yet to prove their long-term value and, as such, were looked upon as being temporary and fleeting.

Fast-forward to 2016 and those sentiments and assumptions have flipped, and done so rather dramatically. With U.S. e-commerce sales expected to reach nearly $500 billion by 2018 (up from $304 billion in 2014), according to eMarketer, the race is on to develop integrated omni-channel distribution strategies to effectively manage both on-line and off-line transaction growth. To find out how companies are tackling this lofty goal, Commonwealth Supply Chain Advisors recently surveyed 18 of the world's top retailers to learn about their omni-channel strategies and practices. Here are the nine conclusions we came to, based on the survey's results.

1. They Manage e-Commerce Internally
For starters, omni-channel companies are pulling away from third-party logistics providers (3PLs) as partners in e-commerce and bringing this component of their distribution operations in-house. Fourteen of the 18 companies surveyed currently manage their own e-commerce operations. The other four organizations plan to discontinue their 3PL relationships and bring e-commerce distribution in-house within the next 24 months.

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