CeMAT Insider

Why logistics automation is ruled by the consumer

Posted by CeMAT Team on 14-Jul-2016 14:12:01


“What do we need to do to help customers face the challenge of omni-channel?”

Michael Kemeny, Business Area Manager – Australia at Knapp posed this question at the CeMAT Knowledge Theatre to demonstrate the importance of placing customer demands at the heart of logistics automation. 

Many manufacturers are trying to grasp how best to meet the demands of eCommerce, but many businesses don’t yet understand the difference multichannel and omni-channel business.

According to Michael, omni-channel has been part of a revolutionary process in which retailers have gone from controlling supply and demand, to now being at the hands of fickle, online shoppers.

“In the stone age we started with barter, but this has changed to single channel, to multi-channel- to omni-channel.

Traditionally retailers used to house the product and create the demand and if you look throughout history, small corner stores developed into departments that then developed into shopping malls. And retailers need to understand that the industry is transitioning again.”

Today the retail industry is wrapped around the whims of the customer. For example, if your customer expect fast delivery, any efficiency that you can create in the picking process will make all the difference.

So what’s the difference between multichannel and omni-channel? And why is it such a big deal?

Multichannel still reminisces of the traditional style retail model because it focuses on the channels that are performing well.

Stacy Schwartz, digital marketing expert, consultant, and adjunct professor at Rutgers Business School describes multichannel strategy as swim lanes in a pool.

"Companies that focus on maximising the performance of each channel-physical, phone, web, mobile-have a multichannel strategy. They likely structure their organisation into ‘swim lanes' focused on each channel, each with their own reporting structure and revenue goals." 

Stacy provides an interesting analogy comparing omnichannel to a spiderweb than a straight track.

"The difference between multichannel and omnichannel really comes down to a company's approach to digital channels."

For Knapp, omni-channel is a retailing strategy meets the demands of the customer in the most affordable way.

Let’s take a look at returns as an example. If you offer your online customers free returns, the customer needs to ship it back, you need to have the item unpackaged, scanned and identified. If it’s possible to resell it, it will need to be repackaged and the re-packed ready for it to be sold again.

And that’s all before you refund your customer.

There are many other trends and challenges facing omni-channel businesses today.

Establishing your customers needs is just the tip of the iceberg. Once you work on how your business needs to deliver great service to its customers, you’ll need to look at some of the other challenges of omnichannel including order structure, store friendly delivery, sales unit preparation, packaging requirements, and more.

But that that discussion is for a future day. For now, Michael closed his presentation by reminding visitors:

“People don’t just shop for getting goods; there are different needs behind their purchase”b

If you can understand your customer’s needs, and utilise the correct automation to fulfill that need, you may be able to make omni-channel a successful and affordable means for your business.

Topics: Logistics Automation, Warehouse