How to excel at E-Commerce order fulfillment

by | Nov 21, 2019 | eCommerce, Omnichannel, Retailers

As the 2019 holiday season quickly approaches, it’s no surprise that e-commerce order fulfillment is capturing headlines and mindshare. On-time shipments, BOPIS/BORIS options, and recognizable packaging can make or break a consumer’s shopping experience. If done right, they’ll return. If not, forget about a repeat purchase.

To create the optimal shopping experience, e-commerce retailers (and their drop-ship suppliers) have found that it all comes down to the three F’s:

  • Fast Delivery
  • Flexible Orders & Returns
  • Free Shipping

The secret to the success of each of these steps is automated trading partner relationships. Only when a retailer and a supplier (and their systems) work together can these processes can become deliver the speed and visibility necessary for e-commerce order fulfillment.

Fast: E-Commerce order delivery times get shorter

A recent e-commerce study of online consumer expectations from Dotcom Distribution found that 55 percent of shoppers expect to receive their orders in 3-4 business days and 38 percent expect it within 48 hours. At a time when Amazon has introduced same-day or hourly deliveries in several markets, a few business days should be manageable.

Any online retailer should be able to manage these tight timeframes by now, but even the most streamlined supply chains can be taxed with Black Friday and Cyber Monday order volumes.

Speed is essential, but can you consistently deliver…especially with drop-ship orders that are out of your direct control?

The key is to automate your trading partner relationships. E-commerce orders should flow directly into an ERP, OMS or WMS solution so fulfillment can start the second it’s received, routing orders to the supplier for drop-ship fulfillment if necessary. Any stops along the way for keying in orders translate into delays that are no longer an option. Orders simply cannot sit on a desk for data entry at your site or your suppliers.

Why does fast shipping matter? Does your customer really need their purchase tomorrow? It doesn’t matter, it is expected. And, if an e-commerce order is slow to reach its destination, 83 percent of shoppers said delayed shipments would influence their decision to purchase from you again (Dotcom Distribution).

Flexible: order and return options required

Retailers are no longer an online store or a brick-and-mortar store, it’s all omnichannel. Shoppers think of you as one entity and want to interact with your website, stores and staff as a single brand. You no longer get to choose how a shopper can order and return their items.

They decide. And, if you make it difficult, they won’t be around for long.

BOPIS and BORIS are an important part of a retailer’s operations. The Dotcom survey showed the BOPIS has more influence over repeat purchases than free returns or exchanges. Shoppers are embracing this channel as a means to skip the line and save time.

Retailers, especially Walmart and Target, have tuned their BOPIS/BORIS strategies with approximately half of U.S. consumers who use BOPIS having done so at Walmart in the past year. Not only does BOPIS make e-commerce orders easy and faster to pick up, but retailers are also finding that 85 percent of shoppers make additional purchases in-store when picking up an order.

The same can likely be said of shoppers coming in-store for a return. If you aren’t offering this service today, you are missing sales opportunities. With more holiday purchases being done online (60 percent) versus in-store (24 percent), according to Dotcom, it’s no surprise that shoppers are looking for retailers who offer BOPIS.

This delivery method’s popularity is growing thanks to its convenience and as a means to prevent package theft. Return options are an important part of a shopper’s buying decision. Dotcom found that 84 percent of shoppers are more likely to make a purchase if given the option to return the item in-store.

The bottom line is that customers like choices. With automated trading partnerships, retailers can better manage inventory at all of their stores, DCs and suppliers. You can place items where they are most likely to be purchased and/or shipped for fast delivery.

Free: e-commerce order fulfillment at no cost to consumers

Lastly, shoppers do not want to pay for shipping. This continues to be one of the biggest turnoffs to online consumers who have grown accustomed to free shipping, thanks to Amazon Prime. Retailers and suppliers must streamline their operations to cut costs if they want to maintain their margins on e-commerce orders.

We’ve seen retailers and drop-ship suppliers tackle new efficiencies from a number of avenues. The first is often to automate with EDI or APIs to improve trading partner compliance, thus avoiding any chargebacks or other fees. Secondly is to integrate their orders with a shipping solution to make the picking, packing and labeling process faster and less error-prone.

Last, retailers are teaming with their suppliers to receive inventory updates more often, especially during peak seasons, to ensure they have access to more items if sales take off. And, in the case of drop shipping, inventory details to ensure they can fulfill every SKU listed on the retailer’s website.

All three foundations of digital order excellence rely on fulfillment and strong vendor partnerships. To learn how your omnichannel retail relationships can provide more profits and better customer service, download the Order Fulfillment in the Digital Era research report from SPS Commerce. It contains advice and learnings from more than a hundred experienced drop-ship vendors on how they automated to meet the demands of today’s e-commerce customers.

Order fulfillment is more complex in an omnichannel environment.

Order fulfillment is more complex in an omnichannel environment.

Enlist the help of your trading partners to profitably satisfy today’s consumer. Download our white paper to help you strategize your action plan.

SPS Commerce Blog Team
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