Today the average consumer browsing the Internet has very different expectations of delivery times than they would have had just five or ten years ago. With e-commerce giants like Amazon leading the way to speed up fulfillment times, two and three-day deliveries have become the norm. When it comes to improving this type of efficiency, we tend to stress two important concepts to our clients at DMW&H. Microfulfillment and omnichannel retail are two buzzwords that you will hear a lot when this topic comes up. Let’s take a look at them and some of the ways that they are transforming the future of shipping, receiving and warehousing.
Microfulfillment
If you lived in a metropolitan area and ordered a piece of clothing from a large online retailer in 2011, there were probably only one or two shipping routes the item was likely to take on its way to you. Your delivery time was likely dependent on how far your address was from the warehouse storing the item. If you lived close, it could be a few days, if you lived in a more rural area, you could be looking at a week or more. Rather than having a few large centralized warehouses to ship goods from, microfulfillment is the concept of scattering smaller fulfillment centers over a greater area to decrease shipping times. Microfulfillment centers are one of the most effective ways for new e-commerce companies to keep pace with the shrinking delivery times of behemoths like Walmart or Target. These locations are typically far smaller than normal warehouses, and often need to be resupplied more frequently. Microfulfillment centers are also often the areas where cutting edge developments like automated sorting systems, robotics, and advanced software programs are first put to use. After all, the better your data is about what goods are purchased when and where, the more feasible small microfulfillment centers are.
Omnichannel
Omnichannel fulfillment or omnichannel retail is a concept that is closely related to microfulfillment. While microfulfillment is a way of filling in shipping gaps with warehouses that are closer to customers, omnichannel adds more delivery pathways to the mix. Instead of shipping goods only in the conventional way, from warehouse to customer, today’s e-commerce leaders are utilizing more (omni) channels to get the job done. A product can ship directly from a brick and mortar retail store, a fulfillment center, a third party, or even a manufacturer. This concept would also include giving customers the option to visit a location close to them to pick up an item. Microfulfillment centers can serve as sites for omnichannel delivery, and can even be co-located with larger warehouses or other facilities.
Moving Forward
It is easy to see where this process of increasing delivery channels and building granular distribution centers is headed. It is all about finding more efficient ways to get goods into the hands of customers faster, and technology is a great way to do that. Automated drones represent an entirely new channel that can be added to the mix, and these machines will most likely need to operate using their own microfulfillment centers. Software and hardware can be used to shrink the paths from seller to distributor to customer, and even have the potential to eliminate pathways that may be cost prohibitive or environmentally unsustainable.
