Omnichannel Fulfillment: Pros, Cons, and Components

What Is Omnichannel Fulfillment?

Omnichannel fulfillment is a sales strategy in which all of your sales channels are integrated into a single view, helping you manage inventory and customer orders regardless of where an order is coming from. 

This means unifying sales data from: 

• Physical stores
• Websites
• Apps

According to Salesforce, 79% of customers expect consistent interactions across departments. 

Traditionally, each channel would be managed separately, with its own dedicated resources and inventory. Omnichannel enables a unified inventory pool, helping you process orders faster by dispatching from the nearest warehouse, store, or other fulfillment point. Another advantage of centralizing your sales data is that all customer touchpoints are linked. A customer can browse, buy, pick up, return, or exchange products across any channel, and their details will be accessible at any location. Meaning someone could arrange a return of a faulty product via Facebook, visit a physical store without notifying staff in advance, go home, and discuss potential compensation via email, and your staff will have a complete picture of what the customer has been through. 

Omnichannel fulfillment relies on real-time synchronization of inventory and order data across all channels, giving retailers the visibility needed to optimize stock levels, avoid errors, and deliver a consistent brand experience. 

Multichannel vs. Omnichannel Fulfillment

Another term you will see is multichannel fulfillment, which is often used interchangeably with omnichannel fulfillment. 

This can be frustrating for us who take definitions seriously, as there is a significant difference between the two. When it comes to multichannel vs omnichannel fulfillment, they both take different approaches to: 

• Inventory management 
• Customer experience 
• Operations 

Multichannel Fulfillment 

So, why would someone choose a multichannel strategy when omnichannel exists? Well, it ultimately comes down to whether you want to improve your sales channels or customer experience. 

Like omnichannel fulfillment, multichannel fulfillment involves selling products across multiple channels, both online and offline. Each sales point will have its own inventory, systems, and processes to manage operations at that specific point. This creates silos in that respect.

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However, the trade-off is that the multichannel fulfillment sales order strategy allows those touchpoints to operate at their best for that location and tailor strategies accordingly. 

Multichannel is well-suited for businesses with limited resources, enabling them to focus on building and optimizing the channels with the highest ROI. But as a business grows, an omnichannel approach may be better for maintaining consistency and managing an increasingly complex supply chain. 

There are more nuances to a multichannel order fulfillment strategy, but as we’re focusing on omnichannel in this article, we’ll continue on that topic, but you can use the following as a summary of the differences: 

• Omnichannel — Sales data is connected 
• Multichannel — Sales data is not connected 

9 Components of a Successful Omnichannel Fulfillment Strategy 

As pointed out earlier, customers expect a fully connected experience when shopping, making omnichannel fulfillment close to essential to implement in your processes. 

But, this will require you to figure out how to integrate your inventory, manufacturing, shipping, tech stack, and customer services into one place, and it probably goes without saying that this is going to be quite the challenge to solve. So, to get you started, here are the key components to building a successful omnichannel fulfillment strategy. 

1. Unified Inventory Visibility

At the heart of omnichannel order fulfillment is real-time, centralized inventory management. 

Rather than segmenting stock by channel, businesses need to maintain a shared view of inventory across all locations (your warehouses, stores, and distribution centers, anywhere inventory is stored). Doing this will help you prevent overselling, reduce stockouts, and enable dynamic allocation of products based on demand and proximity to the customer. 

2. Centralized Order Management (OMS)

Order management systems consolidate orders from all your channels into a single platform. 

Depending on the type of solution you opt for, they may analyze factors like inventory availability, delivery speed, and cost. An OMS will ultimately help you determine the most efficient fulfillment path for each order.

3. Integrated Tech Stack

For an omnichannel fulfillment strategy to be successful, it will need to rely on an ecosystem of tools and solutions, such as: 

• Order Management System (OMS) 
• Warehouse Management System (WMS) 
• Transportation Management System (TMS) 
• Point-of-Sale System (POS) 
• Customer Relationship Management (CRM) 

With these tools properly integrated, it will be much easier to coordinate inventory, logistics, order processing, and customer data to ensure accuracy, speed, and visibility at every step of the journey. 

4. Flexible Fulfillment Options

Omnichannel fulfillment gives customers the freedom to choose how they receive their orders:

• Buy Online, Pick Up In-Store (BOPIS)
• Curbside pickup
• Same-day or next-day delivery
• Ship-from-store

Having multiple options available to customers improves convenience, accommodates a diverse shopping experience, and can even be a key differentiator in a competitive market.

5. Seamless Customer Experience

Using a unified system to manage your orders will deliver a consistent shopping experience for your customers across all touchpoints. 

Not only that, pricing, promotions, product availability, and service quality remain consistent regardless of where the customer is or when they interact with your business. To fully utilize this in your business, it’s best to use an omnichannel inventory management software with features like: 

• Real-time order tracking
• Synchronized carts across devices
• Easy cross-channel returns 

6. Efficient Returns and Reverse Logistics

Returns are a critical part of the fulfillment process. 

Omnichannel systems allow customers to return any item to any of your sales points, regardless of where the purchase was initially made. An integrated return management approach will enable faster processing, restocking, and customer refunds, while minimizing waste and maximizing inventory recovery.

7. Strategic Fulfillment Models

Omnichannel fulfillment enables you to develop unique solutions to reduce delivery lead times. 

For example, retailers are increasingly using stores as mini-fulfillment hubs through strategies such as micro-fulfillment or dark stores, as an omnichannel model helps bring inventory closer to customers and enables faster, more cost-effective fulfillment. 

8. Advanced Analytics and Optimization

Real-time data from all channels feeds into centralized analytics tools, allowing businesses to track performance, forecast demand, and fine-tune operations. 

Having this information ready will help you easily identify bottlenecks in your supply chain and even offer personalized promotions as you can learn more about your customers' buying habits. 

9. Scalable Infrastructure and 3PL Partnerships

As businesses grow, partnerships with third-party logistics (3PL) providers can extend fulfillment reach, add capacity, and support peak-season scalability. 

When integrated into an omnichannel system, 3PLs function as a seamless part of the broader fulfillment network. 

Omnichannel Fulfillment Models and Strategies 

So, you now know what omnichannel fulfillment is and what the components of building a successful strategy. 

Now comes understanding the different models and strategies you can follow to start implementing them into your business. Here's a closer look at the core strategies and fulfillment models that other businesses use to optimize and manage their omnichannel operations.

5 Strategies for Omnichannel Fulfillment 

Building a high-performing omnichannel fulfillment system, you’re going to have to adopt strategies that prioritize: 

• Flexibility
• Transparency 
• Responsiveness

Starting with: 

1. Unified inventory management — Omnichannel order fulfillment starts with a single, centralized inventory pool shared across all sales points, eliminating silos between your storefronts and warehouses, reducing overselling, and enabling real-time inventory visibility for both staff and customers.
2. Flexible fulfillment options — As already mentioned, customers expect flexibility. If you don’t offer flexibility, then you can expect customers to shop elsewhere. From home delivery to collection-point pickups, offering flexible fulfillment options helps you give shoppers the most convenient way to receive their purchases.
3. Ship-from-store — By turning your retail location into a local fulfillment hub, you can fulfill online orders directly from store shelves. This not only reduces delivery times but also maximizes in-store inventory utilization and lowers last-mile costs. 
4. Buy online, pick up in-store (BOPIS), or click and collect — This model blends digital convenience with in-person efficiency. Customers shop online and then collect their orders at a nearby store, helping you save on shipping costs while boosting in-store foot traffic. However, you’re not limited to your own stores either. You can partner with another business to use drop-off lockers or even another store. 
5. Centralized order management — All orders, regardless of origin, are routed into a single system for streamlined picking, packing, and shipping. A centralized view of all your orders supports better coordination, faster fulfillment, and a more consistent customer experience across your entire business. 

4 Omnichannel Fulfillment Models

Once these strategies are in place, the next challenge to overcome is the execution of those strategies. 

Retailers must decide how and where to fulfill orders in the most efficient and scalable manner. Here are some of the fulfillment models that provide the operational backbone for omnichannel success, each offering a different approach to speed, cost control, and geographic reach.

1. Centralized fulfillment centers — The good old-fashioned warehouses will continue to play a key role, especially when integrated into the omnichannel network, supporting bulk storage and high-volume processing while synchronizing inventory with other fulfillment points.
2. Distributed sales order management —  A distributed sales order management system routes each order to the most efficient fulfillment location based on factors such as current inventory levels, customer proximity, and shipping costs.
3. Micro-Fulfillment Centers (MFCs) and Store-as-a-Hub — Touched upon earlier in the article, but these methods of storing and selling inventory will help bring your products closer to urban-dwelling shoppers, enabling faster delivery and in-store pickup options.
4. Drop Shipping and 3PL Integration — For products not stored in-house, businesses can rely on drop shipping or partner with third-party logistics (3PL) providers, as these models expand assortment and geographic reach without the burden of holding additional stock. 

10 Benefits of Using Omnichannel Fulfillment in your Business 

The benefits of implementing this sales strategy are experienced by both you and your customers. 

This is because taking a comprehensive approach, such as this one, helps you not only improve logistics but also deliver consistent, flexible, and profitable shopping experiences by leveraging all the data you have centralized. Here are some of the benefits you can enjoy when you get an omnichannel order fulfillment strategy up and running in your business. 

1. Improved Customer Satisfaction

This is a major benefit, as the flexibility allows customers to shop with you on their own terms, improving satisfaction and driving future business by fostering loyalty. This translates into repeat purchases and even free advertising as they will likely recommend you to their friends and family. 

2. Personalized Shopping Experiences

The unified customer data collection you will undertake will help you tailor product recommendations, promotions, and communications across all your channels, leading to more relevant and engaging customer journeys.

3. Consistent Brand Experience

With everything centralized, there won’t be an opportunity for incorrect information to be displayed anywhere or for a selling location to go rogue. You’ll have standardized pricing, messaging, and services to ensure shoppers have a consistent positive experience across online, in-store, and cross-channel channels, helping strengthen brand trust and loyalty. 

4. Optimized Inventory Management

Having all your inventory data synchronized and centralized to one inventory system improves stock accuracy, helping you reduce overstocking and stockouts, and increase turnover by dynamically allocating your inventory to where it’s needed most.

5. Lower Fulfillment Costs

Omnichannel systems can route orders to the most efficient fulfillment location, whether it’s a warehouse, store, or partner, supporting you in minimizing shipping distances, labor costs, and last-mile delivery expenses. 

6. Increased Revenue Opportunities

Omnichannel fulfillment enables better stock availability, flexible delivery options, and fewer missed sales due to out-of-stock items, leading to a higher conversion rate and higher average order value. 

7. Improved Operational Efficiency

By creating an ecosystem of integrated tools and software, you’ll see a reduction in manual tasks, streamline your order processing, and allow physical stores to operate as fulfillment hubs, which will help maximize your existing infrastructure and labor.

8. Enhanced Operational Visibility

With your data in one place, easily allowing you to see all your sales, inventory, and fulfillment, provides you with a clear view of performance and operations, enabling faster, more informed business decisions.

9. Data-Driven Optimization

To build on the previous benefit, access to unified analytics enables ongoing improvement in inventory placement, order routing, customer engagement, and supply chain performance.  

10. Scalable Growth

Having all your business integrated in such a manner will give you a framework that supports the expansion into new channels, markets, or fulfillment models with minimal disruption, giving you agility and long-term scalability.

10 Challenges of Omnichannel Fulfillment to Look Out For  

At this point in the article, we wouldn’t be surprised if you’re already contemplating hopping off the internet to get your omnichannel fulfillment strategies up and running. 

Unfortunately, putting theory into practice isn’t all sunshine and rainbows, and executing it effectively comes with complex challenges. Here are just some of the challenges you’re likely to run into as you try to implement omnichannel order fulfillment into your business. 

1. Real-Time Inventory Visibility and Accuracy

Maintaining accurate, up-to-the-minute inventory counts across stores, warehouses, and digital channels is one of the biggest hurdles in omnichannel fulfillment. 

Stockouts, overstocking, and fulfillment errors often come from poor visibility caused by data silos, outdated systems, or manual processes (the latter probably being the biggest driver of these inventory woes). Factors such as in-store theft, damage, or display merchandise further complicate inventory accuracy, making real-time synchronization across locations critical to reliability and customer trust.

Many people solve this by using serial number tracking software to more accurately track their stock. 

2. Fragmented System Integration

If you fail to properly integrate all your essential business tools, your omnichannel fulfillment strategy will collapse like a house of cards. 

Many businesses, especially retailers for example, still rely on legacy systems that weren’t built with the complexity that comes with omnichannel management, leading to data disconnects and process inefficiencies. Without seamless data flow between online and offline systems, businesses struggle to unify operations, leading to delays, errors, and missed opportunities.

3. Complex Order Orchestration and Logistics

Determining the most efficient fulfillment location requires order-routing rules and real-time decision-making. 

Factors such as inventory availability, proximity to the customer, shipping cost, and delivery speed must all be considered. As order volumes grow and customer expectations rise, routing and managing multiple carriers for last-mile delivery adds another layer of complexity and cost.

Achieving this effectively will be nearly impossible without ERP software. 

4. Costly and Complicated Reverse Logistics

Since a customer will have the opportunity to buy something online, but then return it to a different selling point, to handle returns you will need a well-integrated system and streamlined processes. 

Omnichannel logistics can be costly and labor-intensive, involving product inspection, restocking, refurbishing, or disposal. Since return rates for online purchases continue to exceed those of brick-and-mortar sales, managing the financial and operational impact is increasingly important.

5. Delivering a Seamless, Consistent Customer Experience

If your systems aren’t properly connected or aligned, processes can frustrate shoppers and damage brand credibility, as there will be contradictions between systems or channels. 

Another thing that customers expect is fast, often free, delivery, making the last mile one of the most expensive and operationally challenging components of omnichannel fulfillment.

6. Segmented and Siloed Supply Chains

A major barrier to efficiency is the lack of coordination across the supply chain.

Treating stores, distribution centers, and online channels as separate entities limits visibility and agility. Breaking down these silos and managing your entire fulfillment network as a single, cohesive operation will require major organizational and technological shifts and investments. The amount of effort it will take to break down these silos actually deters many businesses from making a switch to this strategy and can drive up costs if not carefully considered when jumping in blind and implementing omnichannel selling strategies on the fly. 

7. Workforce and Operational Readiness

Which brings us to the next challenge — training your workforce in new processes. 

You’re going to have to make considerable investments into employee training, task management systems, and technologies to support these new workflows effectively and consistently across all your different locations.

8. Balancing Costs and Profitability

Managing the trade-off between fast, flexible service and cost control is a constant challenge.

You’ll need to offer multiple fulfillment options to improve delivery speed, and maintaining a decentralized inventory incurs costs. For smaller orders or customers farther from your fulfillment points, fulfillment costs can quickly erode margins, meaning you will need to carefully balance customer expectations with operational sustainability.

9. Strategic Inventory Allocation

Determining the right inventory placement strategy is critical for performance. 

Whether using a centralized model for economies of scale or a decentralized model for faster local delivery, each approach comes with trade-offs in cost, complexity, and service levels. Poor allocation can lead to stranded inventory, fulfillment delays, and lost sales.

10. Scalability and Network Design

As businesses expand into new channels or regions, their omnichannel fulfillment networks must scale to accommodate this expansion. 

This means you will have to rethink your store roles, invest in micro-fulfillment centers, or expand warehouse capacity through internal resources or a third party to design a flexible, scalable network that will be able to handle the extra complexity that will come with your expansions.

Because of these challenges and the difficulty of manually managing omnichannel fulfillment, many businesses turn to software solutions to implement and manage their strategies. 

Using Digit for Omnichannel Fulfillment  

Digit is a tool built primarily for manufacturers that has the necessary features to help them support omnichannel fulfillment by centralizing: 

• Inventory
• Orders
• Shipping 

It does this by integrating your favorite e-commerce tools like Shopify to automatically import sales data, reducing manual entry and errors. Digit also enables efficient multi-order shipping by batching orders to the same address, helping you streamline picking and packing and build an omnichannel warehouse. Your sales orders can also trigger manufacturing orders if you use a make-to-order workflow within your business, meaning that MOs are automatically triggered only when you need them. 

With real-time inventory visibility, customizable workflows, and internal notes, Digit can give your teams the tools they need to optimize in-house fulfillment and provide the foundation for implementing omnichannel operations that scale with your business.

Want to see for yourself? Try Digit for free and start implementing your omnichannel fulfillment.