Blog Posts Preparing for the Year Ahead: Distribution Networks
- With continued ecommerce sales growth expected in 2022, retailers and brands need to optimize ecommerce fulfillment operations.
- Distribution network configuration can play a key role in ensuring peak performance.
- Moving products closer to consumers can provide a number of benefits.
U.S. retail ecommerce sales will grow 16.1% this year – reaching $1.6 trillion, according to eMarketer projections. If your ecommerce order volume is on a similar trajectory, you’ll want to do everything you can to optimize your ecommerce fulfillment operations.
What can you do to achieve peak performance in 2022? Check out the latest Multichannel Merchant column from Perry Belcastro, Saddle Creek’s Senior Vice President of Fulfillment. He shares strategies to help fulfillment operations fill and deliver orders faster, scale for growth and fluctuations, and control costs.
The following excerpt details his insights on distribution network optimization…
Strategically Approach DC Network Configuration
If you need to deliver orders faster and more economically, take a careful look at your distribution network. You might be surprised to see how much you can reduce transit time and cost by moving products closer to end customers.
Distributing inventory across facilities in different geographic areas also gives you more ecommerce fulfillment options to help when you experience spikes in volume, staffing issues or supply chain challenges.”
Perry Belcastro, Senior Vice President of Fulfillment
Saddle Creek Logistics Services
With one facility on the West Coast and one on the East Coast or in a central location (based on U.S. population), you can reach more than 90% of the U.S. within two business days using ground service. Additional distribution locations can improve service levels even further.
Distributing inventory across facilities in different geographic areas also gives you more ecommerce fulfillment options to help when you experience spikes in volume, staffing issues or supply chain challenges.
If your operations support both B2B and DTC fulfillment, micro-fulfillment centers (MFCs) and dark stores can be an attractive alternative to store-level fulfillment. They allow retail locations to focus on their core competency and avoid alienating customers with congested aisles.
A word of warning: Historically low vacancy rates and high ecommerce demand are driving up costs for industrial warehouse space. This trend is expected to continue through 2023, making it more challenging for retailers and brands to secure space for ecommerce fulfillment.
For more fulfillment strategies to help your business thrive this year, read Ecommerce Fulfillment: 3 Ways to Optimize in 2022.
Related to: DC Network Configuration, Managing Growth, Selling Online