The retail logistics industry is in a constant state of change because online retail growth is quickly outpacing brick and mortar retail growth. This is largely due to the growing popularity of omnichannel retailing. This shift towards e-commerce puts a significantly stronger focus on the distribution segment of the supply chain. Traditional distribution methods are proving ineffective in meeting consumer needs as they are designed to deliver solely to store locations rather than directly to consumers and are much more costly due to higher inventory holding and material handling costs upstream. Retail logistics operations are moving towards identifying and implementing strategies that allow them to be more responsive while also reducing overall distribution costs. More strategic distribution strategies that have proven effective for serving omnichannel customers include crossdocking where large shipments enter a facility to be broken down into smaller shipments for local delivery; direct to store (D2S) distribution where customers can order online and pick up in store with little to no shipping cost; and direct to consumer (D2C) where items are shipped directly to consumer homes or strategically located pick-up lockers. These strategies are more successful due to their ability to reduce inventory “touches”. These distribution methods require less material handling and inventory storage which leads to a lower average order fulfillment cost. To learn more about implementing one of these distribution strategies or how they can improve the profitability of your operation contact Datex experts today at firstname.lastname@example.org or 800.933.2839 ext 243.
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