As eCommerce continues to grow, so does the pressure on retailers to deliver a seamless omnichannel experience. This is particularly challenging in the order fulfillment process when retailers do not have the infrastructure, modern technology, or skilled labor pool to meet those expectations. For many brands, the cost to build out warehousing and distribution centers, implement new technology, and scale staffing is prohibitive. This is where a strategic third-party logistics (3PL) provider can deliver immense value.
A solid 3PL partner will have extensive infrastructure, years of expertise in order fulfillment and supply chain management, the latest technology, and the flexibility to scale staffing and resources as needed for each client. It will have a wealth of data gleaned from across its network to help each client optimize its fulfillment process.
But, not every 3PL provider is equal in terms of what it delivers. There are 3PL companies that have not kept pace with the times and, while they still meet key deliverables, they may lag behind in their ability to innovate on the brand experience. Before we dive into three key attributes every retailer should require in a modern 3PL partner, let’s take a closer look at strategic partnerships overall.
What is a Strategic Partner?
Retailers have multiple vendors and suppliers. These relationships are based on contracts and are transactional in nature. The vendor provides the goods and services as agreed to in the contract and no more. Once the contract ends, the vendor relationship ends, too. Communication is usually limited to deliverables and contract details.
A strategic partner may be a vendor, but its approach to the relationship is different. A strategic partner becomes invested in mutual success and growth strategies. Communication revolves around contract terms, deliverables, and discussions on how the partner can optimize the retailer’s business. A strategic partner works with the retailer’s team to innovate and enhance the customer experience. It will include tailored strategies so the retailer can deliver on its brand promise more efficiently or in new ways.
It’s important to know the difference when evaluating 3PLs. Look beyond a company’s marketing and pay attention to how its people relate to your team, the questions they ask, and what their motivation seems to be. A strategic 3PL partner will ask questions that are focused on your brand’s growth strategy, current bottlenecks or challenges, areas you want to expand into, and your vision for brand experience. It will believe in what’s possible for your brand even if you cannot yet see the way forward. Non-strategic companies will often keep the conversation centered on themselves, what they provide, and how they will meet your service level agreements. They leave strategy in your court.
That said, even among strategic 3PLs, you want to be sure you’re engaging with a company that is truly future-focused.
3 Ways a Modern 3PL Partner Delivers Strategic Value
A modern 3PL will have more value to offer in solutions than a retailer may be able to leverage in any given moment. It will have a solid track performance track record and the stats to prove it. But, as we’ve noted, a track record of efficient order fulfillment operations is no longer enough to keep retailers’ competitive.
Today’s retailers need a 3PL partner that meets or exceeds their own investment in shaping the future.
Here are 3 critical attributes to look for in a strategic 3PL partner:
- Provides a consistent omnichannel experience. This is table stakes, and undoubtedly promised by every 3PL, but truly delivering an omnichannel experience in each channel, consistently, across the end-to-end post purchase journey is easier said than done. A strategic partner will thoroughly learn your desired brand experience by channel, then shape strategies to deliver on that brand experience. It will implement those strategies consistently from eCommerce fulfillment, last mile delivery, to reverse logistics, to customer care, so that your customers feel a true omnichannel experience on every channel.
- Demonstrates a commitment to innovation and technology. Many 3PL companies still have legacy tech stacks that are costly to upgrade and maintain. 3PLs have the opportunity to lead their industry with technology, automation, robotics, and app and system integration. They should offer cloud-based technology, like powerful order management systems and real-time inventory visibility capabilities, that unifies the supply chain and drives new solutions. A modern 3PL will have an innovative development roadmap and seek ways to create added value. They take pride in shaping the future; not reacting to it.
- Scales with varying market demands. Few retailers have the capacity to scale order fulfillment and staffing during highs and lows. Strategic 3PLs will scale automatically to give retailers the assurance that no matter the seasonal surge or slow time, their fulfillment needs will be covered. 3PLs should have the infrastructure capacity, sourcing, staffing, and flexibility to adjust to each client’s unique needs at any time of the year.
3PLs deliver on all three of these attributes by embracing artificial intelligence, machine learning, and automation. Automation needs appropriate human oversight and recognition of when the human touch is necessary, and when used well it gives retailers a strong competitive edge.
Benefits of a Strategic 3PL Partner
3PLs serve as an extension of a retailer’s distribution operations and handle complete fulfillment operations. They also provide services such as transportation management, omnichannel solutions, store fulfillment support, inventory management, and business intelligence. Some, like Radial, may also provide payment and fraud solutions and customer care. A strategic partner will offer guidance and collaborate with retailers to create the right solutions now and a strong plan for the future.
Learn how Radial provides strategic 3PL services.