Blog Posts Outlook 2020: What to Expect in Order Fulfillment
Order fulfillment operations will play a vital role for retailers, ecommerce companies and brands in 2020. To kick off a new year – and a new decade – here’s a look at fulfillment trends that will be top of mind in the year ahead.
8 Order Fulfillment Trends to Watch
Expect greater focus on the following eight order fulfillment issues in the coming year:
- Ease of purchase. To make it easier to shop, purchase, pay for and ship their products, merchants are adding new mobile apps, store fronts, subscription services and other buying options. To support multichannel expansion and improve the customer experience, they need more nimble fulfillment operations, inventory management and robust systems.
- Warehouse automation. With the unemployment rate at 3.5 percent, fulfillment centers are adding more automated solutions to help compensate for the labor shortage and associated costs. More DCs will begin utilizing robotics, sortation, pick-to-light, drones, etc.
- Shipping costs. Rising parcel costs are a constant battle, with another general rate increase from major carriers again this year. Merchants must continue to find ways to lower shipping costs while improving delivery service to compete with Amazon.
- Distribution network expansion. To meet customer expectations for fast and/or free delivery, many merchants are adding strategically located DCs to get inventory closer to the consumer.
- Micro distribution centers. Using brick-and-mortar stores as DCs for online orders often increases congestion in stores. Many retailers (especially grocery chains) are moving fulfillment to micro distribution centers where products can be picked, packed and shipped more efficiently without impeding store foot traffic.
- Personalization. As merchants look for opportunities to stand out from the competition, personalization will play a bigger and bigger role in order fulfillment. Customers’ orders can be customized through packaging, style, size, delivery timing/location, etc. This will be a significant value add in the subscription space.
- Data security. Cyber security is a top priority. Merchants and their third-party providers must evaluate how they maintain data and ensure security on a continuing basis.
- Cross-border expansion. While larger brands have been expanding internationally for some time, smaller brands now are looking to join them. Naturally, this adds to the complexity of fulfillment operations. Added requirements include calculating fully landed costs such as shipping, customs duties and tax at check out. It’s also important to provide the proper information for timely customs clearance, provide track and trace visibility, manage international returns, and comply with GDPR.
Take these issues into account when planning for the year ahead in order to optimize your fulfillment operations. If you’re unsure how to proceed, a third-party fulfillment company can be a good resource.