Supply Chain Expertise and Technology Blog by TMC, a division of C.H. Robinson

How Omnichannel Retailing Buys into TMS Technology

OmnichannelBlogThe 2015 peak holiday season highlighted changes that are transforming the retail industry. It also shed light on the key role that transportation management system (TMS) solutions play in helping retailers respond and adapt to the emerging industry landscape.

Online volumes surged during the holiday period while store traffic declined. Total eCommerce sales in November and December 2015 are expected to be around $69 billion, a 13% increase on the previous year, reports the Wall Street Journal [1]. A study carried out by retail analyst RetailNext estimates retailers experienced a 2% drop in sales on a 6.4% decrease in traffic in November and December [2].

In response to changing consumer buying preferences, retailers have implemented multichannel or omnichannel supply chains. The aim is to give shoppers a consistently high level of service regardless of which channel they use to buy and return products.

The multichannel, or omnichannel, experience probably isn’t new to you as a buyer. Before I had even heard of the terms, I was already using multiple channels to enhance my customer experience. Often I go to a brick and mortar retailer to touch and feel the product. Then, I research the product online at home to build confidence that I am making a good buying decision. Finally, I will often purchase the product online, but choose to pick it up in store.

To deliver this experience and meet the changing consumer demands, retailers are turning to TMS technology.

The role of TMS solutions in helping retailers make the transition to omnichannel logistics is explored in the TMC white paper Improve Multichannel Supply Chain Management with TMS Technology.

In every multichannel supply chain, efficient freight transportation melds the channels into a seamless service offering. TMS technology provides vital support by enabling shippers to more effectively manage the flow of both freight and information in this complex environment.

For example, proactive event management and on-time delivery performance are extremely important in the omnichannel world. Given the sheer number of events that have to be managed as freight moves between channels, and the volume of information generated, it is essential that shippers can link milestones to automated activity tracking and quickly flag exceptions.

TMS solutions helps shippers meet these demands in four important ways.

Defining, capturing, and measuring milestones customized to each channel. Multichannel shippers can ship direct from their suppliers and contract manufacturers to end customers, to standard retail distribution channels, or to brick and mortar stores. Alternatively, they can choose to use a hybrid solution based on these options. A TMS adds value by defining the milestones in each channel, and capturing them in any region across multiple service providers.

Focusing on exceptions—not every event. A TMS automatically pinpoints important anomalies, relieving the shipper of the need to evaluate every event and related piece of information.

Delivering the right information. Another way in which TMS technology lightens the information management burden is by disseminating targeted facts and figures to relevant recipients.

Capturing a complete view. Rather than trying to piece together the logistics picture from disparate sources—and there many in a multichannel operation—the TMS generates a holistic view of the supply chain. TMS with integrated business intelligent tools highlight trends and opportunities from multiple channels. This holistic view promotes faster, more accurate decision-making.

There are many more ways in which TMS solutions are supporting the transition to omnichannel retailing, and new ones will emerge as this innovative supply chain model continues to evolve.

[1] “Holiday Sales Rise, But Not All Retailers are Cheery,” Suzanne Kapner, Wall Street Journal, January 7, 2016
[2] Retail Stores End Year with Strong Holiday Performance, RetailNext press release, January 7, 2016