Warehouse Fulfillment in an Ever-Growing E-commerce World

Overview:

Online retail competition isn’t limited to advertising and technology. Amazon Prime has set a precedent for fast delivery. Now other retailers, from Apple to Sephora, are scrambling to offer customers the same quick order fulfillment. Since an increasing number of e-commerce companies are shipping products in two days or less, those that can’t afford to offer a fast turnaround risk losing customers and joining the ranks of the disenfranchised. All retailers now have to reduce shipping time to stay in the game, and that comes down to savvy warehouse fulfillment.

Third Party Logistics:

Choosing the right logistics company is detrimental to shipping efficacy. Each retailer is unique in terms of their needs and logistics budget. Once the retailer’s individual shipping requirements have been determined, they used to determine which capabilities are needed in a logistics provider. The following factors may be considered when considering logistics companies:

• Warehouse proximity to target customer demographic.
• Number of warehouse locations.
• Whether specialized packaging is required.
• Does the logistics provider need the capability to process returns?
• Customer reviews and online ratings.
• Cost of shipping and services.

Driving Distribution Logistics:

Let’s delve into this topic a little further. Since shipping times vary based on warehouse location, retailers choose logistics companies with warehouses near their target audience. The number of warehouse locations needed can be determined by the scale of the retailer and the location of that retailer’s main customer base. Plus, retailers have to take into account shipping times of their competition. Walmart and Amazon, for instance, are in a constant battle for which company owns the most distribution centers; thus which is better equipped to offer customers more timely shipping.

Some retailers require personalized packaging for branding and marketing purposes. Such marketing efforts aren’t fruitless. In fact, Shopify recently reported,

“Dotcom Distribution found that 52 percent of consumers are likely to make repeat purchases from an online merchant that delivers premium packaging.”

Well-designed branded packaging can increase the perceived value of a product, go viral over social media and work magic on a retailer’s ROI.

Medium to large sized retailers will need a logistics company that’s also equipped to process returns and issue refunds. Since most retailers don’t have the time to futz with these details, return processing is a pretty mainstream capability and is provided by many logistics companies. How these companies sort and process said shipments and returns is another story. Amazon’s robot army is catching on, and in the near future most warehouse processes will be automated.

The Final Word:

As E-commerce expands, the need for warehouse space is growing. Retail analysts predict that as underwhelming mall stores go out of business, unused retail real estate will become prime places for warehouse expansion. In light of an increasing number of warehouse fulfillment options, retailers are advised to do their research. Before signing anything, retailers should check online reviews, customer feedback forums and inquire with the Better Business Bureau to determine which logistics company is the best fit for their business.