Blog Posts Fulfillment Operations Adjust as More Shoppers Move Online
- In 2020, retailers and brands experienced dramatic shifts in ecommerce order and return volume.
- With no slow-down in sight, their fulfillment operations must adapt quickly or risk alienating customers.
- Third-party logistics providers (3PL) can help to improve the agility of fulfillment operations in several key ways.
No one could have foreseen the rapid escalation of the ecommerce trend over the past year – accelerating the shift as much as four to six years, by some estimates. The associated growth and fluctuations in online order volume have tested the limits of many fulfillment operations.
In a new ebook, Saddle Creek Logistics Services examines six common pain points that retailers and brands commonly face today. First among them, the challenge of supporting a greater portion of sales volume through online channels.
Following is an excerpt from The Complete Guide to Ecommerce Fulfillment Outsourcing…
Fulfillment Challenge: Ecommerce Growth/Fluctuations
Ecommerce sales increased 32.4% year-over-year in 2020.
The past year has been one of extremes. Some companies have seen record ecommerce growth while order volume has plummeted or fluctuated wildly for others.
With volatile demand likely for the foreseeable future, fulfillment operations must be ready to change course on short notice – ramping up or down as volume dictates. To prevent service issues or delivery delays, operations need space and staff available to handle peak volume – even when sales slow.
As volume increases, so does the need for efficiency. Process optimization is critical at every step – from receiving and put-away to picking, packing and shipping outbound orders.
Ecommerce fulfillment operations also must be prepared for high return volume. Roughly 20 to 30 percent of all online purchases are returned. To keep customers coming back, returns, exchanges and refunds must be fast and hassle-free.
- Scale space/labor. With a shared-space environment, a 3PL can adjust resources to meet your needs, flexing to accommodate peaks and valleys in order volume.
- Optimize processes. By leveraging best practices, proven processes and quality methodologies like Lean Six Sigma, 3PLs can help to increase efficiency and improve throughput.
- Manage returns. A 3PL is likely to have the systems, distribution networks and transportation capabilities necessary to process returns efficiently and cost-effectively and get salable products back in inventory. They may also refurbish or repackage items as needed.
To learn how outsourcing can help to address five more ecommerce fulfillment challenges, read the ebook.
Related to: selling online, managing growth