FACILITY DESIGN IN OMNI-CHANNEL RETAIL – A LOGISTICS POINT OF VIEW

Abstract

Omni-channel retailing enables customers to switch seamlessly between all available sales channels of a retailer during their customer journey (pre-purchase, payment, delivery, return). This leads to vanishing boundaries between virtual and physical commerce. As retailers and their assortment become more and more interchangeable from a customers’ point of view, especially delivery service and operational excellence along the supply chain represent a major foundation for creating competitive advantage. As omni-channel solutions arise from physical and virtual appearance, mostly former stationary B&M retailers face the challenges emerging from seamlessly linking multiple sales channels. From a logistics point of view, decisions need to be made if and how former distribution centers designed for “mass delivery” servicing point-of-sales (e.g. pallets, replenishment boxes) can handle single piece distance customer orders. As personal contact and physical customer proximity are major advantages over pure eCommerce retailers, the utilization of existing stores as “linking-hubs” between virtual and physical commerce is indispensable in today’s markets. This leads to new logistics functions at the store level, requiring infrastructural and procedural changes in order to handle channel-independent deliveries and returns. With an analysis of the existing academic literature, this paper aims to map out results of existing publications available, regarding the question, how omni-channel retail impacts distribution facility (and process) options in retail distribution networks and which advantages and disadvantages may exist in order to achieve delivery service targets while minimizing related logistics costs. The results indicate, that the design and scope of activities in distribution centres become a key challenge and success factor in the transformation process of creating omni-channel retail. Furthermore, the integration and set-up of stores play a vital role for creating supply chain excellence and success for retailers. However, the interior design of stores to efficiently execute new logistics tasks need further investigation. Results may be used as a conceptual basis for further research in order to improve about description, analysis, improvement or (re)-design of distribution facilities within omni-channel retail environments. Practitioners may find valuable input to improve and expand their own facilities in their omni-channel transformation process.

Key words: omni-channel retail logistics; operations facility design; distribution network; retail store; distribution centers