Blog Posts 3 Things You Can Do Right Now to Improve Ecommerce Fulfillment
Faced with the need for social distancing and sheltering in place, consumers are turning to ecommerce to meet their needs. Retailers have seen a 1,200% increase in online shopping account registrations and a 300% increase in mobile app downloads in the past month, according to a survey by Mercatus. As a result, many companies are shifting more of their business online.
While adding or expanding an ecommerce sales channel may seem like a simple solution in the face of current uncertainty, it is not without challenges. Often, companies find that their fulfillment operations are ill-equipped for the move to ecommerce.
Gearing Up for an Online Sales Channel
If your company is expanding its presence online, here are three steps to take in the short term:
- Assess processes
Ecommerce pick-pack tends to be slow-going and require skilled decision making since pickers have a large number of SKUs from which to pick. As you adapt operations to suit an ecommerce order profile, carefully consider fulfillment processes.
Review every step – from receiving inbound products to shipping orders – and look for ways to improve efficiency. Are there opportunities to finetune receiving and put-away or pick-pack processes? Could you improve racking systems or incorporate technology? While you may not be able to make major modifications in the short term, even minor adjustments can have a significant impact.
- Expand your labor pool
The need for piece picking makes ecommerce fulfillment labor intensive. Greater demand for customer service and a high return volume can further complicate staffing needs.
As a rule of thumb, fulfillment operations generally require two to three times more staff than traditional warehouse operations. If you don’t have the necessary head count, temporary staffing may be an option in the short term.
- Educate yourself on parcel shipping
Since you’ll now be shipping small packages under 150 pounds, get up to speed on the ins and outs of parcel shipping. Take time to understand your current volume, geographic reach and required level of service. Learn how dimensional weight rates and surcharges for fuel, delivery area and more can affect your parcel spend.
Also give careful thought to delivery options. More companies are now offering fast, free shipping to get essential items to their customers as quickly as possible. While it is important to meet customer demand, expedited service quickly erode your margins. If your customers would be satisfied with two- or three-day service, refrain from promising faster service that they don’t necessarily need. Depending on your distribution network, you may be able to reach your customers in two days with more affordable ground service.
Once you’ve identified the level of service you need, establish relationships with a variety of carriers and negotiate competitive rates.
These three strategies will serve you well in the short term. If you decide to make ecommerce a bigger part of your long-term sales strategy, you’ll need to make more significant operational changes. At that point, you’ll want to look more closely at a variety of issues, including facility design, network configuration, inventory management, technology, parcel management and more.