Assessing Online Fulfilment Options

May 8, 2023

Rise of online fulfillment.

Online volumes from a supply chain perspective are now reaching critical tipping points for Australian retailers – where key investment decisions are required – in order to support sustainable and efficient competition into the future.

Australia Post -eCommerce Industry eCommerce Industry Report 2023

Some example questions emerging for Australian retailers include: 

Centralised or Decentralised?

To what degree should we centralise our online fulfilment physical network?

Together or Dedicated?

To what degree should we bring together our store and online fulfilment operations?

Manual or Automated?

To what degree should we automated our online fulfilment – given volumes, product profile, etc.?

Push or Pull?

What is the optimal inventory operating model for online fulfilment?

Technology Options?

It is only once an organisation has a relative feel for the above that specific technology options should be considered.

What are the strategic online fulfilment options?

A key strategic decision for retailers is choosing the right online fulfilment channel, be it traditional stores, dark stores, dedicated online centres, or shared distribution centres.

How can online fulfilment channel achieve faster and cheaper online fulfilment whilst avoiding the “white elephant” when making strategic investment decisions ?

Finding the optimal channel will come from balancing factors such as range, responsiveness, product complexity, market maturity, set-up costs, and operating costs. By carefully assessing these elements, retailers can establish an efficient fulfilment system tailored to their needs, boosting customer satisfaction and driving long-term success.

It is never one consideration in isolation – the challenge is to overlay the considerations and identify the optimal point when balancing trade-offs.

Fulfilment Options

Store Fulfilment




Dedicated Online HUBs

Dark Stores







The visual below highlights the fulfilment options across two dimensions. On the Y-axis, level of centralisation and on the X-axis, level of automation.

What are the key supply chain considerations?

How can retailers shortlist online fulfilment options for consideration?

It can be daunting knowing where to start. At trace. we recognise it can be difficult to understand the strengths and respective trade-offs of common approaches to online fulfilment. This is why we offer a simple questionnaire to support our clients translate what they know of their existing business strategy, and targeted customer offer, into a shortlist of potential Online Fulfilment Models.

This hypothesis driven analysis simplifies the path forward by ruling out options that are not complementary to your strategic considerations.

Deeper analysis is often required, however this table can highlight the relative trade-offs to help shortlist scenarios for modelling.

Is your business transitioning from store fulfilment to dedicated or co-located fulfilment?

How to find the right online fulfilment option.

Below is an example 3 phase approach for this type of project.

1. Analyse & Design 2. Scenario Modelling   3. Business Case & Implementation

Our approach to helping our clients identify, select, design and implement the optimal online fulfilment option is hypothesis driven, structured and fact-based. We utilise a range of in-house developed tools for this analysis.

The objective is to design a network and online fulfilment capability that is able to deliver on the target customer promise at the optimal operating costs – whilst also providing a level of resilience to changing operating conditions – for example, as customer demands, product profiles, volumes, etc. continue to change and evolve.

Selecting Online Fulfilment Technology

Highly interrelated to the strategic direction is the selection of the technology to support the fulfilment solution. Below are some example options to consider – each with varying trade-offs that require balanced assessment.

Core Picking Technology


Person to Goods (PTG)

Popular & Emerging

Goods to Person (GTP)

Goods to Robot (GTR)

“…GTP and GTR can be 6 to 16 times more productive than traditional PTG…”

Picking Support Technology




Light Directed


Augmented Reality

Picking Methods: Cluster Picking, Batch Picking, Zone Picking

Popular & Emerging


Mobile Autonomous Robots

Multi-shuttle ASRS

Perfect Pick

Carousels (legacy)

Vertical Lift Modules (legacy)

Mini Load ASRS (legacy)

Order Consolidation and Unit Sortation


Put Walls (Batch to Order)

Popular & Emerging

Sure Sorter (Automated Put Walls)

Unit Sorters (Tilt Trays, Cross Belt, Bombay)

Pocket Sorter (Overhead Sorter)

Don’t let inventory be an after-thought.

Inventory management can be complex…

Extensive SKU Ranges

Multitude of Stocking Locations

Multiple Channels

Service Level Targets

Working Capital Targets

Customer Expectations

Large Vendor Lists

Varying Product Profiles

Demand Patterns & Variability

Product Lifecycles

Promotional Activity

Lead Time Variability

Storage Capacity Constraints

Returns & Excess Stock Mgt

Below we have listed a few drivers for the ‘big’ inventory questions – this assumes a co-located facility with a level of automation

Contact us today, trace. your supply chain consulting partner.

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