Blog Posts How Strategic DC Networks Help Satisfy Consumer Expectations
Twenty-one percent of merchants use a 3PL today – up from 16 percent in 2018, according to a recent survey by Multichannel Merchant. What is driving the increase? The need for strategic distribution networks is one factor. MCM Outlook 2019 examines how merchants are adjusting their ecommerce operations and order fulfillment to accommodate consumer expectations. The special report includes insights from Perry Belcastro, Saddle Creek’s SVP of operations, on distribution network configuration, technology and fast, cost-effective shipping.
Following is an excerpt from the report…
Distribution, Fulfillment Space Is at a Premium
A historically tight market for warehouse space is forcing ecommerce companies and fulfillment providers to get creative, including conversion of former retail stores; forward placement of inventory in smaller buildings near urban centers; a handful of multistory warehouse developments in major markets; and the increasing use of third-party logistics (3PL) partners.
Getting back to the ecommerce delivery expectations begun by Amazon, everyone is moving toward the magic two-day delivery target as the benchmark to hit, and setting up their fulfillment networks accordingly. 3PLs are one way that more of them are making that happen, partnering with companies that have strong networks and core competencies in logistics and fulfillment.
“From a delivery standpoint, you want to get inventory as close to the customer as you can,” said Belcastro. “You don’t need a distribution hub on every street corner, but two to four strategically placed in the U.S. allow you to compete and deliver in one to two days at a reasonable cost. That’s the ideal position to be in, for someone who doesn’t have the capability to put locations in every state like Amazon.”
For more on the latest trends and best practices in order fulfillment, download the MCM Outlook 2019 report.