Nearly 50% of Retailers Are Expanding eCommerce Fulfillment Options to Meet Customers’ Expectations
By Brady Berg, VP of Sales, Radial
Retailers are gearing up to meet consumers’ expectations for convenience, fast delivery times, and omnichannel shopping experiences during peak season 2022 by investing where they believe it will matter most to shoppers. In a recent LinkedIn poll, respondents answered the question:
What strategy are you investing in most to reduce costs, increase revenue and, most importantly, meet consumers’ expectations for peak season 2022?
- 47% are investing in expanding eCommerce fulfillment options
- 28% are investing in an order management system
- 17% are investing in faster delivery options
- 8% are investing in eCommerce fraud prevention
These investment areas correspond to the increased pressure eCommerce retailers face in a near post-pandemic marketplace. Upstream retailers are still facing supply chain challenges, rising inflation, and higher transportation costs, while shoppers now consider pandemic-inspired fulfillment options to be par for the course.
Convenience is still a top priority for consumers, as they shop for bargains and choose brands based on product availability and delivery times. Research shows that shoppers have returned to pre-pandemic expectations for two-to-three-day delivery times and consider store fulfillment options like buy online, pickup in-store (BOPIS) and buy online, pickup curbside (BOPAC) to be here to stay.
In an ever-tightening and already competitive market, customer experience remains the number one differentiator for eCommerce retailers. For most, this means they must optimize their order orchestration technology, eCommerce fulfillment processes, transportation management and last-mile logistics, and omnichannel shopping experiences.
Competing on customer experience also requires retailers to streamline their end-to-end customer journey while implementing ways to still surprise and delight customers—and keep them coming back. Improving their core solutions—whether back-office or customer-facing—is key to this process.
Let’s take a closer look at the four areas identified in the poll.
Expanding eCommerce Fulfillment Options
Customers expect a variety of fulfillment options including direct-to-consumer home delivery, BOPIS, BOPAC, ship-to-store, and associate delivery. As retailers expand their fulfillment options, they add more complexity to an already burdened system. Order orchestration becomes paramount as every order needs to be intelligently routed for the most efficient fulfillment process, location, and delivery option.
Retailers that previously handled their own fulfillment may find that expanding options requires the ability to scale beyond their current infrastructure or employee base. This is when a proven third-party logistics and eCommerce fulfillment provider can provide best practices and expertise to support and improve customer satisfaction. With regional and global distribution centers, automated fulfillment center operations, and cloud-based integrated technology, eCommerce fulfillment providers alleviate the burden on retailers and can help them meet customers’ rising expectations for fast and convenient fulfillment.
Store fulfillment has become table stakes for retailers. Existing brick-and-mortar stores serve as mini-distribution centers, with store associates serving as fulfillment personnel. Whether shipping from store or fulfilling an order in-store or curbside, store fulfillment adds a new layer of responsibility and operations for store operators. Intelligent order orchestration is needed to identify inventory proximate to the customer and calculate the fastest shipping times—keeping product closer to customers and lowering last-mile delivery costs.
Order Management System
Without the right technology to manage inventory, however, retailers cannot effectively compete in today’s market. A cloud-based order management system (OMS) brings real-time inventory visibility, intelligent order orchestration, coordination with carriers, and full integration with other critical systems like customer relationship management (CRM) and enterprise resource planning (ERP).
Many retailers are grappling with aging or on-premise order management systems—some working with multiple systems across retail and eCommerce channels. Rather than being siloed, a modern, omnichannel OMS provides a single integrated view across all channels and the order fulfillment ecosystem so that everyone—including shoppers using the brand’s app or website—can see inventory and eCommerce fulfillment status in real time.
While shifting to a modern OMS may seem daunting to some, retailers that make the transition with best-in-class OMS providers find that it introduces immediate benefits that impact customer and employee experience. During peak, this can be particularly important in handling spikes in volume.
Faster Delivery Options
When it comes to transportation management, retailers are renegotiating shipping costs with carriers like FedEx and UPS, when possible, and seeking to decrease last-mile delivery costs while increasing efficiency and accuracy. The last mile—the portion of the fulfillment process when the package is delivered to the customers’ doorstep—tends to be the most expensive and most inefficient due to lower residential delivery density in suburban areas and heavy congestion in more urban settings.
This inefficiency plagues rural areas and urban areas alike. The last mile is also, understandably, where customer expectations are the highest in the supply chain, as they track “out for delivery” messages from retailers and will return items or switch retailers if they have a bad delivery experience.
Most retailers who offer free shipping (or if they charge shipping for home delivery, offer a free ship-to-store option), the high costs of the last-mile delivery process have to be absorbed. Some retailers, like Amazon, are operating their own last-mile delivery vehicles, while most rely on major carriers like UPS and FedEx, and supplement with lower-cost regional carriers like LaserShip/OnTrac and Lone Star Overnight.
The industry’s best eCommerce fulfillment providers manage carriers to optimize last-mile networks, reducing the cost of delivery, managing mode optimization, and measuring delivery performance to improve customer satisfaction and loyalty. Non-systemic carrier management, developing and challenging carriers on drop times, piloting new services, and forecasting are all ways to develop stronger relationships with major carriers. Engaging with a proven partner can be a cost-effective and time-efficient strategy for retailers that are scaling their operations and dealing with major spikes of high-parcel volume.
eCommerce Fraud Prevention
Fraud protection, once in the back alleys of the dark web, is now a front and center issue for eCommerce retailers during the payments process. Improving fraud prevention before peak season helps ensure that trusted customers are approved and that bad actors are blocked.
Customer satisfaction depends on their ability to trust that retailers protect their data—especially since fraud rates increase by 25% or more during the holiday season when shoppers are under the most pressure to complete their purchases. Improving eCommerce fraud detection and prevention can help reduce risks and improve revenue as more trusted transactions are approved. While there are multiple fraud prevention technology solutions in the market, an all-in-one payments, tax, and fraud solution built specifically for eCommerce retailers can simplify these processes with a single platform.
Investing in core business functions that will improve customer experience during peak and throughout the year helps online retailers improve brand loyalty, maximize revenue, and increase customer longevity. Radial is here to partner with retailers to provide an end-to-end solution for streamlined payments and fraud prevention, omnichannel order management, eCommerce fulfillment and transportation management, and customer care.