There’s no denying the impact that Amazon has had on online customers’ expectations. As evidence of the Amazon Effect at work, consider that 70 percent of shoppers said they expect free shipping for standard delivery during the holidays, according to a new Kibo Software study. They’re not willing to sacrifice speed, however. A Deloitte study found that 45 percent of consumers expect delivery within two days while 35 percent count on receiving their orders within three to four days.
Obviously, this poses real challenges to retailers and ecommerce companies competing with the online retail giant. Many find that outsourcing fulfillment to a third-party provider can help them achieve the fast, cost-effective shipping their customers are looking for.
Outsourcing Helps Cut Costs and Speed Deliveries
Third-party providers are particularly valuable in three key areas:
Optimizing distribution networks
To reduce shipping time and cost, many companies are expanding their distribution networks so that inventory is closer to their customers. With established facilities across the country, a third-party provider can facilitate the expansion process, getting you up and running quickly without a major overhead investment.
While you can reach about 70 percent of the U.S. in two days by ground service with a single DC, having multiple DCs will allow you to reach 99 percent of your customers, helping to lower your distribution costs and keep customers satisfied.
Automated fulfillment and material handling solutions can help to speed order turnaround times. Third-party providers can put advanced technologies at your fingertips – pick-to-light, pick-line trait capture, automated labeling, etc.
In addition, with a robust order management system (OMS), a fulfillment provider can help you route orders with maximum efficiency and fulfill orders from the distribution center closest to the customer to shorten ship times. If not all the items required for the order are available at one facility, the system can utilize multiple fulfillment sources so that each item arrives as quickly as possible.
A third-party provider will have an established carrier network, so you can leverage their relationships and buying power to select the most cost-effective mode and service level for each order. They can also pool shipments and leverage presorting and drop-ship options to help control costs.
To extend your shipping window, they can work with carriers to coordinate later pickup times, so more orders can be fulfilled same-day.
Want to stay competitive in today’s omnichannel environment? Enlist an experienced third-party provider to help you deliver the fast, affordable shipments your customers expect.