Subscription box companies have experienced exponential growth in recent years – 100% every year for the past five years, according to McKinsey. As a rule, subscription orders automatically ship on a scheduled basis to help subscribers replenish often-used items or introduce them to unique curated products.
However, many subscribers are interested in purchasing additional items as well – perhaps a full-size version of a sample they tried the previous month or another item in the product line. Adding an ecommerce channel can enable subscription box companies to enhance the customer experience while generating a new revenue stream.
Adjusting Subscription Operations to Accommodate Ecommerce Fulfillment
When adding an online channel, companies should plan to make some operational adjustments. Here are 7 things you need to focus on to help ensure your ecommerce fulfillment is a success.
Make Information Easily Accessible
Unlike subscribers who are replenishing frequently bought items or looking forward to a monthly surprise, online shoppers tend to research purchases extensively online. They expect up-to-date information about inventory and availability, and, once they place an order, they expect real-time shipment tracking. A robust order management system (OMS) can help to provide the desired visibility.
Prepare for Multiple Order Profiles
For companies with a batch subscription box model, all orders are usually identical and can be fulfilled easily all at the same time. By contrast, ecommerce orders are more likely to be unique. As a result, online order fulfillment typically requires piece picking. This labor-intensive process requires more staff with higher decision-making skills to ensure that the proper item is selected from hundreds (or thousands) of options. To support ecommerce and subscription box fulfillment, companies must be able to accommodate both order profiles.
Picking items individually increases the potential for error. Barcoding can help to ensure accuracy. Utilizing Lean and Six Sigma methodologies also can help to improve quality, consistency and efficiency.
Accommodate Higher Inventory Volume
Ecommerce orders may require more inventory on hand than subscription box orders with a set number of SKUs. To provide greater storage density and increase picking efficiency, a warehouse facility with higher ceilings, narrow aisle widths and strategic racking systems can be beneficial. If inventory is distributed across multiple locations, an OMS offers the ability to pull from numerous fulfillment sources.
Speed Up Turnaround Times
Unlike batch subscription orders which are usually processed in a peak period once a month, online orders generally are expected to ship the day they’re placed. Getting shipments out the door efficiently requires more manpower and efficient processes. Automated fulfillment solutions such as such as conveyance, scanners and label applicators help to speed order processing time.
Meet Delivery Expectations
Accustomed to Amazon’s fast, free deliveries, ecommerce customers have higher expectations for speedy service than subscribers looking for monthly shipments. A strategic distribution network can move products closer to customers, helping to provide two-day deliveries via cost-effective ground service. Establishing relationships with numerous carriers, understanding various pricing considerations and shopping for the best rates also can help to ensure the fastest possible service at the lowest cost.
Manage reverse logistics
Approximately 20% to 30% of all online purchases are returned. Consumers expect those returns to be efficient and hassle-free. A sophisticated OMS can provide a unified solution for managing returns and exchanges and get salable products back into inventory more efficiently and cost effectively.
When careful attention is given to factors like these, an ecommerce channel can be a valuable addition to your subscription box business model.
Nicole Lee is director of fulfillment for Saddle Creek Logistics Services