According to a 2023 study by Insider Intelligence, 51% of baby boomers prefer to shop in-store as opposed to Gen Z, 38% of whom prefer to shop via digital platforms. TikTok is driving social commerce adoption and was expected to gain 9.6 million social buyers last year, more than the net increase of Facebook, Instagram and Pinterest combined. Livestream shopping is on the rise, and 55% of U.S. buy-side ad decision-makers say they’re significantly focused on cross-platform measurement.  

With so many commerce channels, it makes sense that consumers today are taking a “channel-free” shopping approach and leveraging many different channels to make one purchase. To illustrate the concept of “channel-free,” a customer may try on a pair of shoes at a physical store, purchase them later via a mobile app and elect to get them delivered to their house, or pick them up curbside.  

There’s more pressure than ever on retailers and brands to integrate modern solutions to meet consumer expectations. They must offer fast delivery, easy returns, robust in-stock inventory across retail channels (in-store, online, in mobile apps, from a catalog) and delivery channels (direct shipping, pick up in store, curbside delivery and locker/parcel pickup). Retailers and brands should evolve their operations to match these dizzying consumer shopping habits. They can do this by taking a channel-free approach to their operations and harnessing the latest integration, tracking and tracing technologies — getting shipments where they need to go more efficiently. 

Let’s dive deeper into the many benefits of adopting a channel-free mindset to inventory and logistics.   

Sustainability  

Retailers can easily reduce enormous amounts of waste by changing the way they operate — from dumping in landfills, to carbon emissions, to building unnecessary distribution centers. By using existing infrastructure like under-utilized space in shopping malls, inventory is housed closer to the end consumer, lessening transit time and CO₂ emissions. It also keeps more product on the shelf and out of landfills. 

To take an example from the 2022 Closed Loop Impact report, a leading channel-free logistics provider was able to keep 18 tons of returned material out of landfills by getting it back on shelves quickly, and saved 65 tonnes of carbon dioxide equivalent (CO₂e) emissions by avoiding use of inefficient large scale distribution centers. This reduced overall transportation miles, while also keeping more product in circulation through middle-mile quality control and disposition. 

Cost Savings 

According to the National Retail Federation and Appriss Retail, total U.S. returns in 2023 amounted to $743 billion in merchandise (14.5% of all sales). The total amount of dollars lost to returns abuse and fraud was $101 billion. 

By taking a channel-free approach to inventory and logistics, retailers and brands can accelerate return-to-stock and increase full-price sales, streamlining the returns process for enhanced margins.  

The first step is implementing a clear and customer-friendly returns policy. By offering an easy-to-follow returns process, retailers can build customer trust and encourage repeat purchases.  

Next, they should invest in modern technology, like an automated returns processing system or a reverse logistics platform, that can expedite their returns procedure. This allows for quick product inspection, refurbishment and restocking. By accelerating the returns process, they can reduce costs and optimize inventory turnover. And by integrating the returned items into the inventory management system, retailers can efficiently incorporate returned products back into the sales cycle, minimizing inventory write-offs and preventing unnecessary stock accumulation. 

The Middle Mile 

Return aggregation in the middle mile makes inventory more productive.  

Consolidation and deconsolidation are two key elements of this. By consolidating multiple shipments into one shipment or de-consolidating one large shipment into smaller shipments at strategic points along its route, companies can reduce costs associated with loading/unloading while still ensuring timely delivery of goods to their final destination.  

Point-to-point shipping may seem like it would save time and money by skipping over unnecessary consolidation steps but, oftentimes, this strategy fails when trying to maximize operational efficiency, due to higher handling costs associated with smaller shipments. Aggregation is better, because it allows you to consolidate multiple shipments into one larger shipment, which then reduces overall handling costs while still getting goods delivered quickly and efficiently to their final destination.  

Channel-free logistics connects existing infrastructure to simplify the whole order-to-delivery process. Companies that prioritize this way of doing things will be able to quickly evolve with the market, because everything will already be connected and cohesive. They will encourage circularity and sustainability, maximize profits and streamline operations overall.  

Bill Thayer is CEO & founder of Fillogic.