Warehousing Considerations in an Omnichannel World
As companies continue to expand into omnichannel distribution, their warehousing needs must be adjusted to meet those needs as well. But first, let’s chat a bit about what omnichannel means.
Omnichannel describes a company’s retail strategy to unify the customer experience across all channels, meaning in-store, online, via a mobile app, through social media, etc. to give an integrated experience. As part of this unified omnichannel experience, companies must consider the effects of warehousing for omnichannel and be prepared to meet the demands of warehousing in this realm.
Warehousing for Omnichannel
When considering warehousing options for an omnichannel retail strategy, it is imperative to take all of the avenues, or channels, where customers can purchase a product into account. Unlike an eCommerce warehouse that only distributes for online orders, omnichannel warehouses must make considerations for brick-and-mortar stores within their region as well as the online orders that will come from multiple sources.
Omnichannel warehouses must be prepared to handle incoming orders from online eCommerce orders, in-store orders, and store replenishment orders, meaning that the workers at the warehouse will be spending a lot of time looking at forecasts, store inventory, and warehouse inventory to meet the demands of each channel they serve.
Factors to Consider when Building an Omnichannel Warehouse
When building a new omnichannel warehouse, there are plenty of external environmental factors that must also be considered. This does not just apply to the environment itself, although that is an important factor! For example, if products are heat sensitive, it will not make sense to store them in a warehouse in the desert without proper climate control. Also, if products need a dry environment, it will not make sense to build in a flood zone.
Other external environmental factors to consider include the external market and its proximity to the brick-and-mortar stores it replenishes. It makes sense to put a warehouse close to the target market of customers to reduce shipping costs and to assist in turning inventory over quickly.
Speaking of proximity, it also makes sense to consider customers that are not located nearby and determine the best method to serve them as well. In this instance, it would be beneficial to consider relative distance from an airport, shipping port, railroad, and major highways. Likewise, considering distance to other major cities would be beneficial as well when looking at target market, store replenishment, location of brick-and-mortar stores, and distance needed to travel for these deliveries.
Next, also in the realm of external environmental factors, it is important to look at the area where you are planning to build and consider the area. What does the unemployment rate look like, and will there be enough workers to staff the warehouse? What kind of tax incentives may be available to build a warehouse in that location? Are there any local laws or regulations that may impede your ability to build a warehouse or distribute effectively? What level of compliance must be met when looking to set up a warehouse – this could mean anything from reporting, labor, health and safety, etc.
Final Thoughts
To recap, when looking at building an omnichannel warehouse, there are many considerations to make such as:
- Climate
- Proximity to target market
- Proximity to brick-and-mortar stores
- Distance to other major cities
- Location relative to:
- Airport
- Railroad
- Shipping port
- Major highways
- Local laws and regulations
- Compliance activities
- Workforce availability
- Tax incentives
When considering building an omnichannel warehouse, what do you look for? Is there anything missing that was not discussed?
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