Maximizing 3PL omnichannel fulfillment success

Omnichannel fulfillment helps provide this experience by making products flow smoothly across sales channels to meet customer demands. It’s different from multichannel fulfillment, where channels operate independently. Instead, omnichannel fulfillment integrates channels to create a unified shopping experience.

However, it can be overwhelming for retailers to manage this complexity in-house. Third-party logistics providers (3PLs) help tackle this task on warehouse managers’ behalf. Once focused mainly on warehousing and shipping, 3PL omnichannel fulfillment now uses advanced technology and strategic distribution networks to facilitate order fulfillment across multiple touchpoints.

Let’s look at the benefits of 3PL in omnichannel retail and explain how Logiwa IO integration helps warehouse managers enjoy these perks.

Key takeaways

• 3PLs allow businesses to integrate multiple sales channels, such as online and B2B operations, and provide real-time inventory visibility across these channels.
• The main benefits of 3PL omnichannel fulfillment are scalability, expertise, advanced technology, cost efficiency, and enhanced customer experience.
• Some must-have features for a 3PL include an advanced warehouse management system (WMS), integration capabilities, AI-driven automation, and cloud-based inventory management.
• When partnering with 3PLs, businesses may face challenges like data synchronization, maintaining brand identity, security, and compliance.
• The future of 3PL omnichannel fulfillment is rooted in cloud-based WMS and sustainable practices to reduce carbon footprint.

The intersection of 3PLs and omnichannel fulfillment

A well-structured 3PL fulfillment network connects ecommerce platforms, wholesale partners, and brick-and-mortar stores to make sure inventory is available wherever the customer is.

3PLs may use shared distribution centers to store products that serve multiple sales channels. Suppose there’s an apparel brand that sells through Amazon and its own website. They can store their inventory in a single 3PL warehouse to reduce duplication and improve efficiency.

3PLs also use advanced order management systems (OMS) to route orders dynamically. Let’s say a New York customer orders a product from an apparel brand on the West coast. Instead of shipping it from a California warehouse, the OMS can automatically select the closest fulfillment center for faster delivery.

Similarly, 3PLs unify return processes. Customers can return products they’ve purchased online to a physical store or return them via a shipping label. A smooth reverse logistics experience makes all the difference when it comes to consumer loyalty.

Real-time inventory tracking is a must in omnichannel fulfillment. 3PLs use cloud-based inventory management systems for a real-time view of stock across multiple locations. They can help prevent stockouts and even trigger automated restocking.

For example, if a product is selling fast at a flagship store, the system can allocate stock from a warehouse or transfer it from another store before it runs out. This way, customers are never disappointed by the ”out of stock” message.

Key benefits of leveraging 3PLs for omnichannel fulfillment

​When warehouse managers outsource inventory management to 3PLs, they can expect to see several benefits.

• Higher scalability and flexibility: Since the 3PL handles the logistics, investing in additional infrastructure in-house is unnecessary. Similarly, 3PL omnichannel fulfillment allows flexibility during periods of fluctuating demand, such as the holiday season or a viral product trend. Businesses don’t have to struggle to expand warehouse space on short notice. Instead, the 3PL’s existing network can handle these surges effortlessly.
• Access to expertise and advanced technology: 3PLs also bring expertise and advanced technology with them. For example, warehouse managers can benefit from AI automation in 3PL fulfillment with smart picking and packing. AI-powered optimization also becomes possible. Logiwa’s AI engine is a good example of a state-of-the-art system, allowing warehouse managers to analyze historical data for accurate forecasting and demand planning. It ultimately improves productivity by 58% and streamlines operations across the board.  
• Cost efficiency: An in-house fulfillment network is expensive to run since it requires labor, transportation, tech, and warehouse investment. 3PLs spread these costs across multiple clients to make fulfillment more affordable for individual businesses.
• Enhanced customer experience: The distributed fulfillment networks allow the shipment of products from the nearest location to the customer. Since customers now expect same-day and next-day shipping, the reduction in transit times helps provide them with their desired experience. Automated order picking also reduces error rates and leads to fewer returns and complaints.

Essential features of 3PLs in supporting omnichannel strategies

3PLs need more than just trucks and warehouses to truly support omnichannel fulfillment. They must have advanced warehouse management systems (WMS) to track inventory, provide analytics, automate picking and packing, and manage returns effectively.

Some advanced WMS features for 3PLs may also include predictive analytics and cloud-based visibility tools. Cloud-based 3PL WMS also integrates well with ecommerce platforms. So, warehouse managers can enjoy real-time inventory syncing and order processing.

Besides ecommerce platforms, the systems should also connect with marketplaces and enterprise resource planning (ERP) software, such as NetSuite. These integrations centralize inventory management for warehouse managers.

AI-driven automation is another must-have for 3PL omnichannel fulfillment. It can include smart order routing, automated sorting and packing, error detection, and predictive analytics. These technologies reduce shipment errors and speed up the packaging process.

Logiwa IO for 3PLs and omnichannel fulfillment

Warehouse managers who need scalable fulfillment solutions for ecommerce can turn to Logiwa IO for their omnichannel fulfillment needs. Logiwa is a full-fledged fulfillment management system with AI-driven optimization for historical data analysis and a microservice architecture that allows horizontal and vertical scaling.

Since the cloud 3PL software is headless, customers can integrate their add-ons as required. Plus, Logiwa is committed to continuous innovation for its customers. Users can experience new features and functionalities regularly.

Challenges and considerations in partnering with 3PLs for omnichannel fulfillment

As beneficial as 3PL omnichannel fulfillment is, it comes with some challenges. The first is making sure that order statuses, inventory, and customer data are consistent across all sales channels. Poor data synchronization can result in delayed shipments and incorrect order updates.

There’s also the issue of maintaining brand identity. When outsourcing fulfillment, businesses may lose control over customer service. The whole unboxing experience is also in the 3PL’s hands, and it might not align well with the brand. So, warehouse managers must choose 3PLs that are on the same page in terms of brand experiences.

Security can be a challenge, too. The increasing rate of data breaches and stricter regulatory compliance mean that 3PLs have to follow specific protocols. Businesses must verify that their 3PL partners follow data protection and compliance standards.

Future trends in 3PL and omnichannel fulfillment

Going forward, there will likely be a higher adoption of cloud-based WMS due to their scalability potential. These WMS can also use real-time data for better decision-making, a plus that warehouse managers seek.

Digital twins, which are virtual replicas of supply chain operations, will also become widely used. They will help optimize inventory placement and reduce bottlenecks in the fulfillment process.

Sustainability is also a growing focus in the industry. 3PLs will increasingly use technologies like recyclable packaging, carbon footprint tracking, and electric vehicles. These innovations will help retailers meet customer expectations in an eco-conscious market.

Enjoy 3PL omnichannel fulfillment with Logiwa IO

We have established that 3PLs can assist omnichannel fulfillment through automated order processing, inventory management, AI-driven optimization, cloud-based WMS, and more. All these benefits can only be unlocked if warehouse managers choose the right partner.

The current retail environment requires 3PL assistance, especially for businesses with dynamic customer demands. With Logiwa omnichannel integration, companies can keep their customers happy and order processing efficient. Schedule a demo of Logiwa IO by speaking to a fulfillment expert.
 

FAQs about 3PL omnichannel fulfillment