Blog Posts Competing with Prime? Fulfillment Strategies to Help You Stay in the Game

Amazon Prime continues to raise the bar for ecommerce shipping and delivery, pressuring retailers to match its high service levels. Do smaller companies really stand a chance of competing with the online giant?

Retailers may not be able to beat Amazon at its own game, but they can change the playing field, says Perry Belcastro, Saddle Creek’s senior vice president of fulfillment services. He discusses how companies can balance their delivery capabilities with consumers’ expectations in a Q&A with Internet Retailer. The interview appears in the 2020 Leading Vendors to the Top 1000 E-Retailers report where Saddle Creek ranks #2 in the Fulfillment Services category.

Following is an excerpt from the article…

Reliable Service Aligned with Customer Expectations is Key to Competing Against Amazon

What are some of the biggest challenges Amazon Prime currently poses to online retailers?

Retailers feel compelled to compete head-to-head with Amazon, but shipping every order with expedited service is simply not economical for the average retailer. It’s important to weigh the cost for one- or two-day deliveries against consumer demand.

Consumers are more likely to buy when deliveries are free, but of course shipping isn’t free for retailers. Whether the retailer absorbs the shipping cost or passes it along to customers, it’s critical to keep shipping costs down. That can be challenging as parcel costs continue to rise.

How can online retailers balance their shipping and delivery capabilities with customers’ expectations?

The key is to provide the level of service shoppers expect— reliably and at the lowest possible cost to the retailer. In most cases, receiving an order when expected is just as important to consumers as speed. Consumers are also often loyal to brands, so a strong social media presence and brand presence help to offset the “I have to have it tomorrow” mindset in most cases.

What strategies can online retailers implement to ship faster and more cost effectively?

Moving inventory closer to the customer is a good place to start. Using multiple, strategically located distribution centers allows retailers to reach 90% of the country using two-day ground service—helping to reduce transit time and cost. Retailers also should establish efficient processes for managing orders so that inventory is pulled from the best fulfillment source to ensure the fastest and most affordable service for each order.

Effective parcel management is also critical. Working with multiple carriers and shopping for competitive rates can help. To negotiate the best rates, retailers should take time to understand all the pricing considerations at play such as point of origin, order volume, surcharges and dimensional weight.

For more on competing with Amazon Prime, read the full article on page 61 of the report.