Larry Wu, CEO of the global online B2B supply chain solutions provider Gigacloud Technology, is a fountain of knowledge on omnichannel retail.
Despite the growing importance of omnichannel in a retailer’s strategy, every retailer is at a different stage. Some have already invested heavily in inventory or warehouse space while others are newer to the business and are still figuring out what works best for them.
Wu said that adopting a new model takes time, and that what worked yesterday might not work tomorrow.
“The retail environment is constantly evolving,” he said. “We think flexibility is one of the most important qualities a retailer can have today. Whatever strategy a retailer chooses, GigaCloud is designed to support a more flexible way of sourcing and fulfilling products for our retailer customers.”
The company’s omnichannel model connects online ordering with in-store/showroom buying behavior because, according to Wu, retailers shouldn’t have to choose between a physical showroom and an online assortment.
“The two should complement each other,” he explained. “Retailers can showcase representative samples in their showroom while exploring a much broader selection through GigaCloud Marketplace. Once a customer places an order, our Supplier Fulfilled Retailing model enables the product to be shipped directly to the end customer through our nationwide flat-rate shipping network. The result is a more efficient operating model. Customers still get the confidence of seeing and experiencing the product in person, while retailers can expand their assortment without taking on additional inventory risk or expanding their showroom footprint.”
For retailers who need advice on adopting an omnichannel strategy, Wu said to start with a clear understanding of your customers, then build gradually.
“You don’t need to invest heavily upfront or carry inventory for every product. The more you can stay lean, reduce risk and adapt as demand changes, the better positioned you will be for the long term,” he said.
He also laid out six essential aspects of an omnichannel strategy:
1. Omnichannel should be measured against consumer behavior
Approximately one-third of consumer spending already occurs online. So online penetration should be evaluated against how consumers shop, not just a retailer’s internal channel mix. Retailers below that level may be falling behind changing consumer behavior, while those above it are more likely gaining share. Improving your online mix alone does not necessarily indicate business growth.
2. Consumer behavior continues to shift online
Younger consumers increasingly default to shopping online as a habit rather than making a conscious channel choice. Retailers cannot expect consumer behavior to reverse and should adapt their business model accordingly. Continued migration toward online shopping is likely to shape how retailers allocate resources and engage with consumers.
3. Openness enables variety, scale and better benchmarking
Online customers expect a significantly broader assortment than physical stores can offer. Closed business models focused on controlling sourcing and maximizing gross margin can limit assortment and scale. Open ecosystems enable broader product selection, higher transaction volume, greater operational scale, and a more objective benchmark of where value is being created.
4. ROI is more meaningful than gross margin alone
Gross margin, net margin and ROI measure different aspects of performance and should not be viewed interchangeably. Maximizing gross margin does not necessarily maximize overall business performance or returns. Benchmarking capabilities externally — such as whether sourcing can succeed beyond internal retail channels — helps identify where value is actually being created.
5. Retailers and brands create value differently
Retailers create value through assortment, accessibility and customer choice, while brands create value through product differentiation and brand equity. Exclusivity is not the only way to protect margin, and even strong brands benefit from broad distribution. Well-known brands can also serve as reference points that help customers evaluate value alongside exclusive or private-label products.
6. Omnichannel is more than e-commerce
Omnichannel is not simply about having an online storefront; it encompasses sourcing, partnerships, fulfillment, assortment and the measurement of business performance. Building an omnichannel business requires changes to the operating model, not just the sales channel.
