Viewpoint: Two retail strategies to use now for optimizing order fulfillment

This commentary was written by Nicola Kinsella, senior vice president of global marketing for Fluent Commerce. The views expressed here are solely those of the author and do not necessarily represent the views of Modern Shipper or its affiliates.

During the pandemic, retailers worldwide evolved their practices to switch to contactless sales, whether online with traditional delivery, or arrangements like curbside pickup. The trick was to provide customer experiences that were on par with traditional in-store shopping to maintain sales.

Now that many restrictions have been lifted, customers have the freedom to shop in person but still rely on online sales more than prior to the pandemic. Retailers must now deliver memorable post-COVID shopping experiences in a way that is both profitable and sustainable while seamlessly integrating the new experiences they have added into their traditional sales channels.

Much of this effort depends on discovering and delivering available stock fast and managing inventory effectively to maximize margins. Customers must have easy access to products and know exactly what is available, when and where. Many retailers are making this happen with near real-time inventory visibility and a distributed order management system to route products from the most optimal location.

For example, an electronics retailer might make it possible for customers to know if a specific camera or smartphone is available in a store closest to them or have a good idea of how long it will take for that product to be shipped to their local store. Alternatively, they will be able to show them what the closest store is where it is available immediately. Two fulfillment strategies—virtual inventory catalogs and dropshipping—make this customer experience possible by improving control of stock availability while minimizing business risk.  

Virtual inventory catalogs

Virtual inventory catalogs improve control and critical product availability by segmenting stock data by channel, market, region and product. In addition, inventory rules such as buffers or safety stock levels can be set up to ensure products are not oversold.  

Controlling what is sold and where creates opportunities to cross and upsell. Here are a few ways retailers can optimize sales with virtual inventory catalogs:

  • Adapt to new social marketplaces. Transactions over social media are opening doors to a new level of sales and customer interactions. Virtual inventory catalogs help retailers ensure they are selling the right products through this channel by controlling which products or categories are sold in a particular market. They can also set specific buffers and safety stock levels for each channel, meaning they will sell more of the right products in these spaces.
  • Upsell across multiple channels. Retailers need to maximize visibility for multiple banners or brands to the specific target markets. Virtual inventory segmentation enables them to carefully manage which products are made available to each brand and then set custom buffers or safety stock for each.
  • Sell across multiple regions. When managing international sales, it can be difficult to know which products are available, particularly from a shipping perspective, when they are heavy, fragile or restricted for transportation. Some retailers may only want to ship international orders from locations set up to handle customs processing. Virtual catalogs make it easier to manage product availability by region and set custom rules to manage product or category exclusions. 
  • Create VIP experiences. Virtual catalogs can help improve sales to VIPs and top customers. Retailers can create a special pool of inventory that is only available to the brand’s most important customers. This inventory can be used to offer VIPs exclusive delivery options or perks based on their preferences, and it’s possible to control back-end sourcing to expedite their orders.
  • Support market research. Retailers that want to expand into new markets need to know which products will be successful. Virtual inventory catalogs enable easy segmentation of a retailer’s inventory to test certain products or categories in a new market. Once proven, retailers can make more intelligent, data-based business decisions. 

Virtual inventory catalogs provide information across all customer channels so stock can be more easily controlled and sales fulfilled. This builds efficiencies within the business and meets customers’ needs who expect increasingly rapid and convenient purchases. Ultimately, delivering the most products through the right channels into the hands of the right customers will mean omnichannel retail success.


Dropshipping is an order fulfillment method that doesn’t require a business to keep the products in stock. Instead, the store purchases items as needed from a third-party supplier to fulfill sales. The third-party supplier then ships items straight to the customer.

This can be a great business strategy for businesses to create additional revenue from selling complementary items from other suppliers. However, choosing the right dropship partner is vital to ensure a consistent customer experience. Here are a few things to consider before implementing the strategy:

  • Start small. Dropshipping makes it easy to test products for a short trial period before committing on a large scale. In addition to demonstrating whether the product will sell, it will also estimate the quantities needed for an initial stock. This reduces the inherent risk that comes with new product types.
  • Choose trusted partners. Before getting into any partnership with dropship vendors, retailers must do their research. Getting recommendations for dropship vendors can be challenging, as many can be used by competitors. By starting conversations early, retailers can determine whether or not a vendor will deliver on expectations. 
  • Work with distributed order management systems. One obstacle to dropshipping can be an outdated OMS. Many can’t keep up the pace for dropshipping as they’re not flexible enough to handle company-owned and third-party stock. 
  • Reconsider high-cost items. Some products, such as fragile or valuable items that might need additional security, cost more to stock and ship than others. Unless your entire company specializes in these types of products, paying additional storage and shipping fees for a small subsection of your business doesn’t make sense. However, you can still keep your customers happy by offering these products through dropshipping.
  • Don’t oversell. Market fluctuations aren’t always predictable. Having a dropshipping supplier as a backup allows retailers to avoid raising inventory costs by overstocking to meet unlikely maximums.

In a post-COVID world, retailers need to optimize global inventory to boost online sales and maximize margins. Virtual inventories and dropshipping can make this happen by allowing retailers to stock a wider range of products across multiple regions and channels. They also help reduce the potential to overstock or outsource the stocking and delivery process entirely. These advanced strategies can enable retailers to adapt quickly to changing market conditions and demands, allowing them to thrive and survive both on and offline.

About the author

Nicola Kinsella is senior vice president of global marketing for Fluent Commerce, which offers a cloud-native distributed order management system for omnichannel retailers.

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