Top 7 Challenges of order fulfilment for eCommerce retailers
Rethinking Retailer Fulfilment
Claire Umney, managing director, explores the top 7 challenges of order fulfilment for eCommerce retailers.
UK sales grew 74.4% year on year to January 2021*. It goes without saying that the acceleration of ecommerce throughout the world has been hard to ignore. Consumers have had to shop online out of necessity, but the reality is that this has caused a permanent shift in buying habits. Our recent research of 1,500 consumers found that 82% said they expected to maintain or increase current levels of online spending. With increasing volumes, managing deliveries and returns while trying to ensure accuracy and improve sustainability, have made order fulfilment ever more critical to drive repeat business and maintain loyalty.
As the country starts to open back-up following lockdown 3, many businesses are breathing a sigh of relief that they can get back to some normality. For the retail sector however, the surge in online shopping experienced during the first lockdown has continued to provide unprecedented levels of demand. This has provided a difficult challenge to e-tailers when trying to find the optimum balance between customer delight and maintaining an economically viable operation, through the obvious scale up that has ensued. Central to taking advantage of this new and evolving landscape has been the ability to incorporate an agile, flexible and streamlined order fulfilment process.
There are some challenges for eCommerce retailers to overcome in order to provide an optimised fulfilment processes and deliver on their customer promises:
Challenge 1: Matching technology to the needs of the customer
There is no doubt that eCommerce fulfilment strategies have had to evolve quickly. Maximising the amount of orders you can fulfil, requires robust physical and digital technology within warehouses and distribution centres. Many businesses we work with know they need to automate to hit the levels of fulfilment the market demands, but don’t always know where to start. It can be perceived as daunting or cost prohibitive, but you don’t have to go from zero to 100% straight away. Robotics for example, offer a level of flexibility, scalability and fantastic ROI, which makes them an attractive and affordable solution to compete in the eCommerce space.
Challenge 2: Satisfying the call of “I want it now”
Failure to deliver to customer expectations can mean losing sales to competitors – a third of consumers would rather buy elsewhere than suffer an extended delivery service. Retailers like Amazon are setting the pace with increased shipping options of same-day and one-day delivery. A delivery management software platform that integrates all your carrier partners will ensure you can; remain flexible to keep your operations moving through surges in demand, lower your costs by selecting the optimum carrier to meet performance metrics and improve accuracy to ‘get it right first time’.
Challenge 3: Managing Peaks
Making sure your order fulfilment processes are set up to cope with everyday order volumes can be a challenge in itself, but coping with seasonal peaks will only add to the pressures retailers are facing. Ignoring the opportunities that automation provides and not making better use of existing warehouse systems limits your ability to flex around operational fluctuations. To manage increasingly complex operations effectively in today’s uncertain times, retailers need smart end-to-end systems that integrate software and machinery and provide accurate, real-time data to support agile decision making.
Challenge 4: Multichannel Selling
With over half of global eCommerce sales occurring on marketplaces, it’s not surprising that brands are trying to establish a presence in these channels. But as well as opportunity, marketplaces present huge challenges too, with strict performance metrics driving the need for seamless fulfilment processes. Failure to adhere to these can result in hefty fines and even termination of the opportunity to sell via that channel. This is why software needs to be front and centre of your warehouse, integrated with each and every process. Software that optimises your throughput from; picking, packing, labelling and despatch as well as being integrated with multiple carriers and the marketplaces which enables you to meet your service level commitments.
Maximise Order Fulfilment
Challenge 5: Return to sender
Returns policies are a major brand trust factor; make it easy for consumers to return goods, and you encourage them to buy. For many customers, returns are now considered part of the buying experience. The downside for retailers is that reverse logistics can be complicated and expensive. Retailers need to understand what is being returned before it reaches the warehouse to effectively allocate resource and process the return efficiently. Using an established software solution that provides visibility and a streamlining of the returns management process cuts costs and can be a key enabler in making it possible for retailers to offer customer-friendly return policies.
Challenge 6: Understanding the friction within your order fulfilment process
Order fulfilment is complex, encompassing everything from point of sale to delivery to the end customer. For retailers this complexity creates an extra level of challenge in realising the potential the market has to offer. Supply chains that incur delays, stoppages, blind spots, manual errors or data silos will have a level of friction which inhibits the ability for the business to react in an agile way as necessary to match the needs of the customer. It has never been more critical for barriers to growth to be removed through automation in your workflow and effective system integration. This automatically drives efficiency gains, reduces mistakes and ultimately provides enhanced sales opportunities
Challenge 7: Keeping up with the pace of change
For the eCommerce retailers looking to stay ahead of the curve there inevitably will always be a new operational model to consider in order to tackle changing consumer demand. Already we are seeing the acceleration of dropship programs to provide customers with access to stock outside of the standard stores and warehouses. Likewise, the introduction of microfulfilment is likely to be the ‘next big thing’ for retailers. With each challenge comes an opportunity; successful retailers will take a holistic view of their operations across both physical and digital automation to determine where efficiencies can be made. Collaboration with a systems integrator will ensure you receive the expertise required to get the right level of innovation to meet your unique business needs and the investment required to support them.
Breathe Fulfil
Are you managing rising order volumes? Are your order fulfilment processes as fast and efficient as you need them to be? Any delay in this process is a friction you can’t afford, especially with increasing consumer demand to contend with at the moment. Customer expectations have soared; many want more for less and I’m afraid to say they will turn elsewhere if they can’t get it.
We have just the solution to support your growth journey in eCommerce: Breathe Fulfil – The flexible fulfilment software solution for UK retailers.