The past year has redefined how Americans shop. Online order volume has risen exponentially. Buy online, pick-up in store (BOPIS) and curbside pick-up have become commonplace. Free shipping is practically an industry standard. Already underway prior to the coronavirus pandemic, ecommerce fast became the new normal – and it promises to be a force to reckon with this year.
What exactly does that mean for ecommerce fulfillment operations? Now more than ever, they must be strategic, sophisticated and responsive. Following are 10 key areas to master to be on top of your game in 2021.
CX Strategy
As shoppers move online, there are fewer opportunities to connect and engage with them in person. Therefore, it is critical to ensure the best possible virtual customer experience (CX). Establish meaningful key performance indicators (KPIs) to help measure your effectiveness in delivering fundamentals like quality, accuracy and timeliness.
Also, look for ways to increase and improve communication around each step in the order process. Enhancements might include live chat to support buying decisions or post-purchase surveys for voice-of-the-customer (VOC) research.
Ease of Omnichannel Purchase
As buying habits have changed in the past year, so have consumers’ expectations for a seamless experience across sales channels. Can you make it easier for them to research, buy, ship and even return your products?
If you’re not doing so already, share information about product availability and inventory levels as well as updates on order status and tracking. Offer a variety of delivery options (i.e., BOPIS, same-day delivery, and/or white glove services) and ensure ease of returns with expanded options and timelines.
Bridging the Online/Offline Gap
In the wake of the pandemic, the urgent need to accommodate accelerated ecommerce volume often resulted in makeshift solutions. When overwhelmed with online orders, for example, many brick-and-mortar retailers opted to fulfill ecommerce orders from stores. While the solution worked temporarily, it is unlikely to be sustainable in the long term unless you have extensive resources.
If you need to support both business-to-business (B2B) and direct-to-consumer (DTC) ecommerce fulfillment, it can be helpful to use micro-fulfillment centers where products can be picked, packed and shipped without causing congestion in stores. Another option is to outsource order fulfillment to a 3PL with both B2B and D2C fulfillment capabilities.
Real-Time Visibility and Reporting
Real-time inventory management and system integrations will be key to executing an omnichannel strategy, particularly if you have a multi-node distribution network.
In today’s ecommerce environment, you need to capture relevant data in real time and interpret it in a way that is actionable. Do you know which products you have, and where they’re all located? Can you tell which SKUs are selling and how fast?
Margin Management
As order fulfillment options expand, it is important to reevaluate SKU profitability. Cost metrics for a product will vary by delivery method. You likely will need data capture across the different systems and operational processes to accurately measure cost drivers.
When you combine real-time inventory with margin management, you can build custom deal structures that increase average order value (AOV) – such as product bundles or “mystery items.”
Personalization
Customization is another increasingly popular way to add value and provide a memorable customer experience. Orders can be personalized through packaging, style, size, kitting, embroidery, engraving and more.
Keep in mind that today’s consumers expect rapid turnaround times. If you decide to personalize products, make sure you can do so efficiently to be responsive to customer demand. Performing these functions closer to the customer can help to speed response times.
Fulfillment Automation
Finding sufficient labor to support ecommerce fulfillment continues to be a challenge, despite current unemployment rates. To supplement their workforce, many operations are increasing their reliance on automation and robotics.
If your investment in fulfillment automation is cost neutral – or close to it – it is likely to be worthwhile.
Parcel Management
Shipping tends to be one of the highest cost components of ecommerce fulfillment. Parcel carrier pricing strategies are complex, inflated and implemented with little notice.
This year, it will be critical to develop parcel strategies that allow you to pivot when carriers impose higher rates and new surcharges. Now is a good time to optimize your shipping portfolio. Explore opportunities to utilize regional carriers, other niche carriers, postal workshare options, etc.
White Glove Services
With more consumers buying large, bulky items online, there’s growing demand for integrated white-glove and final-mile services.
Instead of scheduling deliveries while making their purchase in a store, consumers now expect to do so online. If you wish to offer these services, you’ll need to orchestrate integration with white-glove service at checkout.
Supply Chain Diversification
During the pandemic, merchants that relied exclusively on a single supplier or carrier partner found themselves particularly vulnerable. In 2021, expect to see more diversification across sourcing, fulfillment channels, marketplaces and carriers.
To limit your exposure, build the potential for catastrophic events into your business plan and identify strategies to mitigate potential service disruptions. For example, many companies are adding distribution centers in multiple locations to move products closer to consumers and offer alternative fulfillment options.
As you contemplate the year ahead, take time to evaluate your ecommerce fulfillment operations and ensure that you have the right resources and expertise necessary to navigate today’s complex ecommerce landscape.
Perry Belcastro is SVP, Fulfillment Services for Saddle Creek Logistics Services