Today’s consumers demand a seamless shopping experience, regardless of their channel. This is why omnichannel third-party logistics is becoming increasingly crucial for businesses of all sizes.
Now is the time to start if you’re not yet implementing omnichannel third-party logistics. In this blog post, we will discuss what omnichannel 3PL is and how to launch it in your business. Keep reading to learn more!
What Is Omnichannel Third Party Logistics?
Omnichannel third-party logistics (3PL) involves the coordination of multiple channels to provide a seamless customer experience. This could include anything from managing inventory levels across different channels to ensuring that orders are fulfilled on time, regardless of the channel they were placed on.
Benefits of Omnichannel Third Party Logistics for Retail Businesses
Omnichannel retailing improves the customer experience by providing multiple ways for customers to purchase your product. Customers can buy products through mobile, web, or in stores. This increased availability of purchasing channels leads to increased sales and traffic.
Just like omnichannel logistics, the retail industry also takes advantage of on-demand logistics to increase sales revenue.
Here are some of the benefits of implementing omnichannel third-party logistics in your retail business:
1. Reduce last-mile delivery times and costs
Making your delivery faster and more affordable is essential. This is what is called last-mile logistics. It is the part of the supply chain that is the closest to the end consumer. This part of the chain needs to be optimized so that you can offer more competitive delivery promises and omnichannel distribution options.
Speaking of delivery, check out our guide on the difference between shipping and delivery!
2. Increase profit margins
Almost one-quarter (23%) of people are willing to spend an extra $20 or more to get free delivery. When there are minimum spending costs, retailers don’t have to pay the shipping cost, but customers don’t either through higher prices.
3. Reduce the impact of disruptions
Omnichannel allows for more choice when something bad happens. Centralized logistics networks are more vulnerable to disruptions. That’s because they have fewer places where things can go wrong. But distributed networks are more shock-resistant.
They also let companies deliver on their promises faster and more cheaply – which can help keep customers from leaving during tough times.
Interested in learning more about retail logistics in general? Check out our guide on things you need to know about logistics in the retail business.
The Ultimate Guide to Implementing Omnichannel Third-Party Logistics in Your Business
There is no one perfect way to do omnichannel logistics. You must consider what each brand and channel needs when implementing omnichannel third-party logistics in your business.
In addition, plenty of the strategies below are also worth considering when optimizing logistics operations as a whole.
1. Ensure your 3PL has B2C expertise
If your company sells products to other businesses, you might also sell products to consumers online. This is a different process than selling to businesses. When you are working with an omnichannel logistics provider to help with picking and packing products for eCommerce, keep this in mind:
B2C has a different system to B2B
With B2C/eCommerce logistics, orders are processed through a selling platform like Shopify. This system must be integrated with your warehouse management system (WMS). This would allow the WMS to create orders, modify inventory, print labels, and drive efficient packing and shipping.
2. Have your 3PL system fulfill B2B and B2C orders from the same inventory
Your omnichannel 3PL company’s WMS system helps you manage your warehouse. It tracks inventory, orders, and how well your workers are doing.
A WMS system from your 3PL can help you manage inventory for omnichannel distribution. This means that all orders are fulfilled from the same inventory pool. This will help you reduce your warehouse footprint and storage costs.
In addition, your 3PL’s WMS can also give you access to information and key performance indicators that are important to your business. Many WMS systems allow for a lot of customization, so you can choose the metrics most important to you across multiple customers.
3. Most 3PLs provide warehousing space – take advantage of this!
The pandemic-related surge in eCommerce sales has companies looking for more warehouse space to store and ship products. All sizes of companies are competing for this space, so the competition is fierce, and space is becoming scarcer.
There are two types of warehousing: shared and dedicated. With shared warehousing, you simply pay for the space you need as you use it. With dedicated warehousing, a 3PL provider will run your entire warehousing operation from a facility only used by your company.
4. Let your 3PL take care of hiring the talent
It can be hard to find and keep logistics employees. If you decide that it is not worth your time and resources to do this, you can partner with a 3PL provider who will take care of omnichannel logistics for you. This includes managing the labor involved in this process.
3PLs can adjust their staffing to meet the demand that is higher and lower than usual. Your business likely has times when it is busier and slower. If you are managing your logistics workforce yourself, you may find that you need to hire new talent when it is busy and let go of talent when it is slow.
This can be a costly mistake because there is no guarantee that the well-trained person who just left will be replaced with someone just as good.
5. Have your 3PL scale operations based on order volume
In logistics, scalability means being able to support a wide range of operations. This can include a low number of orders or a high number of orders. It also has everything in between. This is what mainly goes on in on-demand logistics.
You can build a large operation that anticipates thousands of weekly orders. Still, if those orders don’t come as forecasted, you’ll be wasting a lot of money on space, labor, and equipment.
Outsourcing can help you use a 3PL’s fulfillment infrastructure. This will help you only use the space and services you need today. But if your business grows, the 3PL can help you expand using space, labor, and automation.
6. Most 3PLs provide value-added services
Some of the most common value-added services offered by third-party logistics include the following:
- Inventory postponement
- Labeling and packaging
- Repackaging and damage handling
- Storing items
Businesses with Successful Implementation of Omnichannel Third-Party Logistics
1. The Caker with ShipBob
The Caker is a bakery founded in 2010 by Jordan Rondel. ShipBob has allowed this business plenty of flexibility when fulfilling orders from both online and offline channels, providing a consistent customer experience.
2. Oatly with Red Stag Fulfillment
Oatly is the world’s original and largest oat drink company. Red Stag’s mission has always been to support Oatly’s growth by offering an expanding roster of carrier options and multiple distribution locations.
3. KUSSHI with MasonHub
MasonHub overtook all fulfilment operations at KUSSHI, allowing their team to focus on other initiatives in marketing, hiring, and product development.
4. Upper Limits with Magestore
Upper Limits uses Magestore to centralize all operations in one place and offer an omnichannel shopping experience for customers.
Overall, there are lots of necessary factors to consider when choosing a 3PL provider to partner with for your business.
How Dropoff Can Assist with Omnichannel Logistics
To omnichannel fulfill orders, businesses must have a robust system in place for tracking inventory levels and incoming orders. They must also seamlessly connect their various sales channels so customers can order products from any medium and deliver them through a single distribution process.
Dropoff can help your business with omnichannel logistics by providing a comprehensive online platform that connects all your sales channels and provides real-time visibility into the status of your deliveries. We offer a range of services, including same-day delivery with advanced last-mile delivery tracking technology.
We understand the challenges of omnichannel logistics and are committed to helping our customers succeed. This is why we continuously invest in cutting-edge technology to keep up with current logistics innovations and trends.
Talk with a Dropoff expert today about how we can help you launch or improve your own omnichannel strategy.
1. Why is omnichannel logistics necessary?
Distributing products through many different channels makes it easier for more people to buy them. This makes it easier to fulfill orders and results in increased productivity, accuracy, and a smoother shipping system.
2. How can 3PLs assist businesses in omnichannel logistics?
Third-party logistics providers can be a valuable asset for businesses looking to implement omnichannel logistics. An omnichannel logistics strategy requires a high level of coordination between various channels, including brick-and-mortar stores, eCommerce platforms, and mobile apps.
A 3PL can help streamline the process and ensure that orders are fulfilled accurately and on time. In addition, a 3PL can provide transportation services, as well as order tracking and management tools.
3. How can you handle inventory across an omnichannel?
An omnichannel inventory management system helps you keep track of your inventory on different platforms. This gives you a better idea of how many lists you have and helps you predict demand so that you don’t run out of stock.
4. Why is omnichannel retail essential?
Omnichannel retail lets you reach new audiences and sell more. Offering a unified, seamless experience across your customers’ preferred channels enhances their experience and builds brand loyalty.