Protect margin while improving omnichannel fulfillment
Retail leaders are judged on experience and profitability. The winners align customer promise, inventory, and cost-to-serve with an operating system teams can run every day.
The question behind this piece
Omnichannel often becomes a speed contest. Teams push for faster delivery windows, more ship-from-store, and broader assortment availability, then wonder why margin erodes and store execution breaks. The problem is not ambition. It is misaligned decisions. How do you design omnichannel fulfillment so the customer promise is reliable, inventory is positioned intelligently, and every order is routed with margin in mind?
Why this matters now
Omnichannel growth is not automatically profitable growth. When networks are stretched, hidden costs show up fast: split shipments, expediting, store labor disruption, damages, and returns handling. Those costs are easy to miss until margin is already gone.
At the same time, customers treat omnichannel as table stakes. They expect accurate availability, predictable delivery dates, and simple pickup and returns. When those expectations are missed, the penalty is immediate through cancellations, negative reviews, and churn.
Old approaches fail because they treat fulfillment as a downstream logistics function. In reality, omnichannel margin is determined upstream by the promise you make, the inventory you expose, and the routing rules you enforce.
If your promise is not costed, you are selling margin without noticing.
Our perspective
Margin-protective omnichannel fulfillment requires three things: a clear promise architecture, routing rules that reflect cost-to-serve, and ownership that closes the loop. Technology enables this, but operating discipline sustains it.
I. Define a small set of promise tiers and the rules that qualify an order for each tier.
Examples include standard delivery, expedited delivery, pickup today, pickup tomorrow, and ship-to-store. Each tier should have explicit guardrails tied to inventory location, labor capacity, carrier options, and margin thresholds. Not every SKU, basket, and geography should qualify for the fastest promise. Leaders need to be explicit about where speed wins loyalty, and where predictability wins trust.
II. Make cost-to-serve visible at the order level before routing decisions are made.
Omnichannel breaks averages. Profitability varies by basket size, weight and dimensions, distance, node selection, and handling complexity. The goal is not perfect precision. The goal is consistent directional economics so teams can see when a split shipment, expediting, or ship-from-store choice changes the unit economics materially.
III. Redesign routing to reduce splits and exceptions.
Split shipments quietly compound labor, packaging, carrier cost, and customer service contacts. A margin-protective model prioritizes basket integrity first, then speed within guardrails. Common moves include tightening ship-from-store eligibility based on labor capacity and queue health, reserving certain SKUs for specific nodes, using zone-based routing to reduce long-haul shipments for low-margin orders, and setting “do not split” thresholds unless service risk is high. The objective is fewer manual interventions and fewer orders in exception queues.
IV. Treat stores as fulfillment nodes with a designed operating model.
Ship-from-store and pickup work only when store routines are engineered for it: pick paths, staging rules, cutoff times, packaging guidance, exception handling, and training. Incentives must also match the job. If stores are measured only on sales and shrink, fulfillment will be treated as a distraction. Balanced scorecards should include fulfillment accuracy, speed, and cancellation rates, weighted by store format and volume.
V. Assign owners to the decisions, and tie KPIs to those decision points.
Omnichannel failures often live in the gaps between merchandising, marketing, supply chain, digital, and stores. Make ownership explicit across three layers: promise tiers and guardrails, inventory exposure rules, and routing logic and exceptions. Track a tight set of metrics that connect to margin and experience: availability accuracy, split shipment rate, cancellation rate, exception rate, on-time performance, and cost-to-serve by route and node.
Omnichannel performance improves when decisions have owners, and owners have metrics they can control.
At Strathen Group, we can run an omnichannel fulfillment diagnostic. Over 3 to 4 weeks, we can quantify where margin and service are leaking, then deliver updated promise tiers, routing guardrails, KPI definitions, and decision rights your teams can run.
