The recent shift towards online shopping has been nothing short of seismic. We’ve seen ecommerce sales at a record high as a result of the pandemic, with nearly 150 million people shopping online for the first time during the COVID crisis1.
This rapid acceleration away from physical stores has skyrocketed demand for online orders, often far beyond retailers’ fulfilment capacity. With a large portion of ecommerce growth set to remain long after the high streets have reopened and life has returned to “normal”, retailers simply can’t afford to sit back in anticipation of demand reducing back down to previous levels.
Instead, it’s the merchants who are proactive in their attempts to strengthen their fulfilment capabilities who are best placed to experience lasting benefits from this COVID-induced elevated rate of trading. A reliable and flexible fulfilment strategy is essential for keeping up with demand and standing out from an increasingly competitive ecommerce crowd.
In this article, I’ll explore why fulfilment is so important to ecommerce success and what today’s consumers expect when it comes to delivery of their online orders. I’ll share with you how retailers can transform their ecommerce fulfilment into a competitive advantage in 2021 and beyond – from expanding the fulfilment options you offer customers, to choosing the right partners to work with, and optimising your returns process . Plus, a closing idea around how to fund improvements to your fulfilment operations – that doesn’t require outside investment.
Fulfilment is a critical part of the ecommerce puzzle
Ecommerce fulfilment refers to the processes that take place from the moment a customer completes their purchase, to the point their order is delivered to them – think storing inventory, picking, packing and shipping. It also includes the returning of goods. Fulfilment can be completed in-house by retailers themselves, or outsourced to a third-party logistics service provider (a 3PL).
Having streamlined fulfilment capabilities is essential for ecommerce success. Think about it: you can have razor-sharp front-end sales and marketing functions, with engaging content, incredible products and excellent conversion rates – but all of that amounts to nothing if you can’t get your products to your end-customers.
87% of shoppers say that the delivery experience directly impacts their decision to shop with a retailer again2. With stats like these, it’s clear that ecommerce fulfilment is something you want to conquer, and fast.
Get it right, and fulfilment can be a powerful tool for converting one-time shoppers into loyal customers who will become advocates for your brand, saving you money on marketing costs and spending more with each purchase. Get it wrong, and you risk eroding customer trust, attracting poor reviews and losing shoppers to your competitors.
Consumers’ fulfilment expectations
It’s safe to say that shoppers’ expectations have increased massively in recent years – when it comes to fulfilment, we’re a rather demanding bunch.
Thanks to Amazon and its Prime service, customers have pretty high expectations when it comes to ecommerce shipping. In this age of instant gratification, next-day delivery is regarded as “normal”, and we’re even seeing same-day and 1 to 2-hour delivery for certain postcodes.
And it’s not just Amazon that you need to think about. As an ecommerce business, you’re competing in the world’s largest shop: the Internet. If you can’t offer a customer the fast shipping service that they’ve come to expect as standard, they’ll just look towards your competitors.
What’s more, 64% of global consumers want their ecommerce orders shipped for free3. Many online shoppers will suss out shipping costs before adding items to their cart, with 65% of consumers reporting that they look up a store’s free shipping thresholds before getting to the checkout4.
Not only do today’s shoppers want shipping that’s fast and free, they also expect it to be “green”. More and more consumers are taking a stand against excessive amounts of plastic packaging materials, with initiatives that focus on zero-waste or minimalist packaging fast becoming high priority for shoppers.
And these smart, sustainable packaging initiatives are only expected to increase in importance as we learn more about the negative impact of plastic waste on the planet.
Clear, transparent communication
Customers like to be kept in the loop when they’ve made a purchase. They want regular updates about their orders, starting with a timely order confirmation email. After this, they’ll expect you to send an email once their order has started being processed, and then another to communicate when it’s been dispatched.
Not only does communication around the fulfilment process need to be regular, it needs to be open and honest. Transparency around shipping costs and delivery times is key for building customer trust and creating a positive ecommerce experience.
How to make your ecommerce fulfilment best-in-class
If you don’t want your brand to be left behind in 2021, or on the back-foot for future years, it’s crucial that you take time to optimise your ecommerce fulfilment capabilities in line with consumers’ developing expectations. Investing in speedy, streamlined, sustainable fulfilment processes could do wonders for attracting new shoppers and keeping your existing customers happy – both of which will point you towards epic growth.
Let’s look at a few ways you can transform your fulfilment offering into a competitive differentiator for your brand.
#1 Increase your fulfilment options
Launch a click and collect service
Many brands are getting flexible with fulfilment and have started offering new options to customers, such as “click and collect”. Click and collect services have become increasingly popular amongst consumers, as they offer an attractive blend of speed and convenience, whilst also enabling shoppers to skip the shipping costs.
For retailers, offering click and collect fulfilment can reduce cart abandonment and increase conversion rates, not to mention slash your fulfilment costs. It’s also a great way to make use of physical stores that aren’t being used at the moment.
If you don’t have a physical footprint of your own, explore options provided by the click and collect network. Collection points at supermarkets could be a great, convenient option for your customers.
Provide local delivery through multi-warehousing
How about expanding your fulfilment options by offering local delivery? Could you use your physical stores as local fulfilment centres? Consider optimising your fulfilment by distributing inventory to multiple locations in the vicinity of your customers.
Keeping the distance between your stock and your end-consumers as short as possible makes it faster to distribute items to nearby customers, without your costs spiralling out of scope.
The bonus here is that if you’re keen to uphold your “green” brand positioning, reducing your total delivery mileage also gives you an advantage when it comes to CO2 emissions.
#2 Choose a reliable logistics partner
If you’re outsourcing your fulfilment operations to a 3PL, they’ll handle the entire fulfilment process for you at their own centre. They’re in control of a critical part of your business, with the power to significantly impact your brand reputation, so it’s essential that you look for a quality provider renowned for their first-class service.
Think value, not cost. You want a reliable, reputable, tech-enabled 3PL that will connect you with several courier companies and help you compete with the big players in your field. They might not be the cheapest, but, if they help you keep your customers happy and coming back for more, your investment will pay for itself through customer retention and recommendations.
#3 Don’t rely on a single courier
As we’ve seen throughout the pandemic, relying exclusively on a single courier can leave retailers particularly vulnerable. Consider increasing diversification across your supply chain and using a couple of courier companies so that you’re not dependent on a single service provider. This is important for mitigating against potential service disruptions.
Working with multiple shipping providers also means that you can cater to different needs. You might be able to move products closer to consumers and even offer alternative fulfilment options by diversifying.
And make sure that you’re always checking fulfilment rates – if a courier’s fulfilment rates drop, respond quickly by switching to another provider.
#4 Align your fulfilment operations with your brand values
It’s also important to review your logistics operation from a position of “brand” – in terms of both your public and private values. Customer service standards are an obvious one, as discussed above, but you should also think about wider values that are important to your company.
For example, if you’re conscious of sustainability and “green” practices, it’s important to use a logistics company that can connect you to couriers that support you with these values. If that means paying more for say, an electric fleet, then so be it. You can always look to offset costs by leveraging the value through your customer communications, and using it to win and retain customers.
Also, revisit the earlier note about local delivery and reducing mileage to lower the overall environmental impact of your operations.
#5 Reduce uncertainty post-purchase
Let’s jump back to when a customer pays for a product on your site. The time between payment and your customer receiving their product is crucial for customer relations, yet it all-too-often falls under the radar. That period of time is a huge test of trust – you’ve got a shopper’s hard-earned money, and they have faith in you to deliver the goods (their promised item/s, on time, and in excellent condition). They’re experiencing both anticipation and uncertainty; the former being positive and exciting, the latter being potentially negative and unsettling.
What you need to do is keep the post-purchase experience as positive as possible – by reducing uncertainty as much as you can. This means keeping customers in the loop with dispatch updates, live tracking, SMS alerts, or any other messaging channel that is relevant for your demographic.
#6 Provide a fast and easy returns process
Returns are a key part of ecommerce fulfilment. When you consider that 96% of consumers will shop with a retailer again because of an “easy” or “very easy” returns experience, it’s not something you can afford to get wrong5. A flexible, customer-centric approach to returns with a solid reverse logistics process can certainly play to your advantage as a retailer and help differentiate your brand from the competition.
To start with, make sure you have a clear and simple returns policy easily accessible on your ecommerce site. Many shoppers are put off making a purchase if they can’t find information about the returns process, so it’s important to prioritise this information on your online store. Consider dedicating a link on your website footer to your returns policy, or including a detailed returns section on your FAQ page. This is a simple way to build trust, reassure uncertain customers and ultimately drive sales.
Consider offering a self-service returns portal which enables customers to easily initiate a return and create a label in just a few clicks. Streamlining the process like this ensures a simple and consistent experience for users, which is likely to encourage repeat purchases and boost customer loyalty.
When it comes to fast return processing, having local fulfilment centres definitely makes a difference. If you’ve got a warehouse near the end-consumer, you can get products back in stock in a speedy manner.
Even better, if a local customer has ordered the item that’s been returned to stock, you can fulfil from your local warehouse. This is the perfect fulfilment loop. It’s saving you time and money on sending products back to a central hub, when you’ll receive them again a few days later to fulfil a local order.
Funding your investment in ecommerce fulfilment
Of course, investing in excellent fulfilment services can be costly, and some business owners might consider it to be a risk. But, if you’ve got a high number of returning customers, have you considered offering a delivery subscription package to secure recurring revenue? A subscription model could help you to generate the cash that you need to make the investment in stronger fulfilment as low-risk as possible.
Let’s take Amazon Prime (which admittedly includes other services, but has express delivery front and centre) and ASOS Premier Delivery as examples. With these models, subscribed customers pay a single fee to get unlimited “free” express delivery for a set amount of time. Last year, Amazon Prime cost £7.99 a month and Amazon had 150 million members. And ASOS Premier Delivery cost £9.95 per year and subscriptions increased by 30%. That’s a significant amount of money upfront to help support your fulfilment service improvements!
The way you manage ecommerce fulfilment can impact your reputation, customer relationships, profitability, and, ultimately, your brand’s growth. It’s no exaggeration to say that fulfilment can make or break your ecommerce business.
With demand for online shopping increasing, and consumer demands intensifying, look at your ecommerce fulfilment as an opportunity to differentiate yourself among your competitors. It’s all about optimising fulfilment processes for speed, efficiency and reliability, whilst keeping your customer’s expectations at the forefront.
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With over a decade of experience in the ecommerce industry, we know what it takes for a brand to succeed in the competitive world of online retail. Whether it’s getting more of the right people onto your store, increasing your conversions, or helping you optimise the post-checkout experience, our Shopify Plus experts are clued up and ready to help you unlock your ecommerce potential!
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