4 Strategies for Accelerating Ecommerce Order Fulfillment

ecommerce fulfillment center conveyor and bins feature

In 2005, Amazon debuted its Prime membership program to the world, offering free two-day shipping and an inexpensive one-day, overnight option for members. Since then, Amazon Prime has set new standards for ecommerce order fulfillment time. In fact, 63% of U.S. shoppers in a 2019 survey reported that they now expect orders to be delivered within three days.

However, keeping up with these new expectations has proved to be a challenge for many retailers, both when shipping to stores and direct to consumer (DTC). In MHI’s most recent Industry Report, meeting consumer demand for speed was cited as one of the three toughest challenges in the supply chain today. Among the report’s survey respondents, 54% noted it as extremely or very challenging.

With customer satisfaction and loyalty on the line, many companies are looking for ways to accelerate ecommerce order fulfillment and their logistics operations. If you find yourself in a similar struggle with “the need for speed,” here are four strategies that can help.

Opening Micro-Fulfillment Centers (MFCs)

Rather than traditional distribution centers with large footprints, there’s a growing interest in opening micro-fulfillment centers (MFCs). These mini warehouses, often a fraction of a typical facility’s size, are strategically located in and around major urban areas.

The goal is to store products in facilities near stores and consumers and shorten order delivery time. If you plan on developing multiple MFCs around the country, be mindful of the cumulative real estate costs.

Partnering with Third-Party Logistics (3PL) Providers

If current consumer expectations for speed are outpacing your distribution infrastructure’s capabilities, you can look at outsourcing to a 3PL provider for support. In essence, you hand off all order fulfillment tasks, from product receiving and storage, to order picking and shipping, to a trusted partner.

A 3PL provider often has established fulfillment centers in multiple regions, which helps accelerate order delivery. Further, more 3PLs are automating their fulfillment operations for even greater efficiencies. Companies find 3PLs helpful too if they’re running out of storage space in their own facilities due to growth and SKU expansion. The cost benefit is the elimination of investment in additional owned or leased facilities.

Leveraging Brick-and-Mortar Stores

For ecommerce orders, many more retailers are leveraging their store network and store inventory to augment fulfillment from FCs to increase speed and expand assortments. This model is the foundation for the growing e-grocery sector. It’s how innovative grocers including Whole Foods, Walmart, Target and Kroger are able to offer same-day and even two-hour delivery.

Investing in Warehouse Automation

Consider retrofitting an existing ecommerce fulfillment center or building a new facility centered around automation. Robotic order picking systems can store, retrieve and move products with high speed and precision. Such robotic handling can fill any operational gaps left by labor shortages.

For those challenged with SKU proliferation, a system that uses high-density storage creates significant space savings, providing room for future growth. Also, look for solutions that offer a modular, scalable design so you adjust based on demand. This helps keep costs low while delivering rapid results. Notably, automated FCs are up to six times more efficient than their manual counterparts.

Ultimately, accelerating ecommerce order fulfillment is a matter of not only operational efficiency, but also competitive differentiation. The ability to meet rising consumer expectations by delivering orders rapidly and accurately gives you a clear leg up on the competition. Customers that know you can make this happen are far more likely to become loyal and grow in lifetime value.

Derek Rickard is ‎Distribution Systems Sales Manager for ‎Cimcorp Automation Ltd.

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