Efficient fulfillment is key to sustainable growth
Tara Daly
·July 26, 2024
Today’s customers have high expectations when it comes to ecommerce businesses. They want their orders delivered on time, with order tracking that lets them know the moment a package has shipped, and when it has arrived. In order to meet these demands, efficient fulfillment processes are essential for sustainable growth. In fact, 85% of retailers say that better fulfillment practices gives them a competitive advantage over other businesses in their space.
In this article, we’ll look at the factors that go into building a best-in-class fulfillment center.
What is order fulfillment?
Order fulfillment involves five stages:
- Sourcing products from a manufacturer or distributor
- Receiving items to your distribution center
- Storing products on warehouse shelves
- Processing items for delivery once a customer places an order
- Shipping the order to your customer
It’s important to prioritize supply chain visibility, so you always know where products are in the inventory management process. By ensuring that you know how much stock of any product you have available in your warehouse, you can predictably meet your customers’ demand and avoid overstocking or stockouts. You should be able to track when products are being shipped to customers; when they’ve been delivered; and, if the customer decides not to keep the product, when they are en route back to your warehouse for restocking. Smooth integrations with your manufacturing partners, warehouse team or 3PL, shipping carriers, and reverse logistics partners can ensure that you have complete visibility into your end-to-end order fulfillment process.
Customer expectations around order fulfillment
As far as customers are concerned, they want their orders fast—with frequent updates around delivery status.
Ninety percent of customers see a two- to three-day delivery window as the baseline, and 30% even expect retailers to offer same-day delivery. And when it comes to order tracking, 90% want the ability to track their orders in real time, with 60% even saying that the inability to do so would cause them to choose a different merchant.
It’s also important to provide a superior reverse logistics experience, in the event that a customer needs to send back an item. Eighty percent of customers expect free returns, and 54% say they prefer to drop off their boxless returns at a designated drop-off location, rather than repackage and ship the item back from home.
At every stage of the transaction, customers are seeking efficiency and transparency. By delivering on these key qualities, you’ll be able to drive higher customer satisfaction and retention.
How to excel at fulfillment
In order to meet your customers’ demands, it’s important to build a streamlined and well-integrated system for managing your inventory throughout the supply chain.
Use an inventory management solution that captures data including supplier updates, current inventory status, customer orders, shipment status, and return status. By bringing together all of this vital information in a centralized platform, you’ll be able to easily track the movement of your inventory through your supply chain, and leverage data insights to help you determine when it’s time to reorder stock, run a promotion, or liquidate merchandise. By using historical data and predictive insights to track product demand, you’ll be able to calibrate your inventory levels to meet your customers’ needs.
Once a customer has placed their order, the next step is getting the package to their doorstep. To effectively manage logistics, your warehouse team or 3PL should determine which of your warehouse locations has the closest stock to the customer’s destination. You can compare carrier routes and options to determine the most efficient way to get the product there.
When the product has shipped, you can provide your customer with a shipping confirmation and order tracking number, which they can use to check the package’s progress in real-time along its journey. When the package has been delivered, you can send the customer a final alert so they’ll be able to collect it.
If there are any hurdles with delivery, such as a delay or a missing package, make sure that you proactively communicate with your customer and let them know the updated status. If a package goes missing, you can issue an immediate replacement and provide them with an order tracking number for the new package.
A smooth order-tracking process is no less important when it comes to reverse logistics. When routing packages back to your warehouse or distribution center, you should be able to use an automated platform to choose the most cost-effective route for your package delivery. Or, if the customer chooses to drop the product off at a drop-off location, you can consolidate multiple product returns into one bulk shipment, which will help you save money on your product return while minimizing your environmental impact. Your brand should be able to track the delivery status of the return from the moment it’s scanned in, so you’ll know how many returned products can go back into your inventory.
By using Loop integration partners, you can even get insights on your item condition, ensuring that you know whether the item is in resellable condition. If not, you can choose to recycle, donate, or sell it to an online secondhand store. This entire process can be automated, using set conditions to determine the ultimate destination for the product.
Building a comprehensive process for managing your fulfillment process will help you build a more efficient business operation—resulting in higher profit margins and improved customer retention.
Learn how to boost your fulfillment process with Loop.
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