Top 7 eCommerce Fulfillment Mistakes to Avoid
Online retailers must run a cost-efficient, streamlined eCommerce fulfillment operation to deliver exceptional customer experiences. But doing so can be challenging. Here are 7 mistakes that eCommerce retailers need to avoid to retain customers and generate loyalty.
1. Seeing Reverse Logistics as a Cost-Burden.
Returns are costly. Losing customers because of a bad returns policy is costlier. Many eCommerce businesses see returns as a burdensome cost center. Recently, we’ve seen retailers constrict their return policies to reduce the rate of returns. This helps decrease costs, but it puts the customer experience at risk.
Customers review return policies before they decide to purchase. They expect a hassle-free, easy, and ideally free (or minimal cost) returns process and if that is not promised to them upfront, they will choose a different retailer. The returns process is integral to the entire customer experience — and retailers must nail this in order to retain customer loyalty.
Take action:
- Automate workflows by integrating data and applications to ensure that customer data moves across channels, stores, and the supply chain as a single source of truth.
- Optimize reverse logistics to contain costs by making sure returned goods are made profitable again or returned to the manufacturer quickly.
- Dig into your data to determine primary return triggers so you can fix issues and mitigate the need for returns. For example, make sure your product descriptions and imagery match reality.
2. Not Giving Customers Delivery Choices.
Delivery speed is part of the customer’s buying decision. This information needs to be clear and upfront before checkout, and shoppers should be provided a range of shipping speeds and options to customize to their preferences. Most customers are willing to pay premium rates for the fastest shipping options; however, a majority will choose slower delivery for non-urgent items and will choose a retailer who offers this over one that doesn’t.
Take action:
- Provide delivery options, including an eco-delivery option to combine multiple orders into one delivery.
- Negotiate with carriers for the best rates and SLAs in contracts.
- Optimize final mile costs by ensuring inventory is located closer to your customer base or using micro-fulfillment centers.
3. Failing to Scale Fulfillment.
The Statista Digital Market Outlook forecasts that by 2029, online shopping revenue in the U.S. will surpass 1.1 trillion dollars. eCommerce retailers that are unable to scale fulfillment will not be able to stay competitive. Retailers will need more warehouses, suppliers, staff, robotics, and automation rooted in real-time data visibility across the entire supply chain ecosystem.
Take action:
- Build new warehouses or repurpose existing buildings (like vacant shopping malls) as new distribution centers. Micro fulfillment centers that are either in-store or near stores, and more localized to customers may offset the rising need for real estate.
- Move key systems to the cloud, integrate data and apps, and create automated workflows to scale fulfillment. This is required before robotic fulfillment solutions can be installed.
- Implement robotics where it makes sense for the business and improves customer and employee experience.
4. Not Prioritizing Data Visibility and Reporting.
Data visibility creates a unified view through easy to interpret dashboards that makes data actionable for decision making. It also enables better reporting, which helps management make strategic decisions. Connected data that is visible across the retailer’s systems helps create an easier, more personalized customer experience.
Take action:
- Create a single pane of glass view across the supply chain to deliver on customer expectations. Talk with partners, suppliers, shippers, and third-party logistics companies to see how your systems can be integrated.
- Break data siloes. When retailers manually source data from multiple locations, it leaves room for errors and makes it difficult to know what data is truly up to date.
- Move to data-driven decision making by making sure data is accurate and reliable.
5. Practicing Poor Inventory Management.
Retailers that have powerful inventory management systems and practices drive better customer experiences, contain and reduce inventory costs, and are better able to ensure they have the right inventory, in the right amounts, when they need it.
Take action:
- Deploy an order fulfillment solution that provides real-time inventory visibility and can integrate with your partners.
- Shift to a modern inventory tracking system with SKUs to eliminate manual inventory management, and provide the IoT basis for next-generation inventory management aided by artificial intelligence (AI).
- Improve demand forecasting with predictive analytics that do not rely solely on historical data.
6. Not Being Strategic with Omnichannel.
Omnichannel is a strategic goal, yet many retailers are not strategic in choosing which channels to prioritize. Mobile and apps are quickly becoming top channels for customers, with websites less so. An omnichannel strategy needs to be channel inclusive and optimized on the highest performing channels. In eCommerce fulfillment, delivering on omnichannel comes down to accuracy, speed, packaging, and providing the right information to the customer at the right time.
Take action:
- Prioritize and optimize your top channels and test the customer journey to make sure there are no gaps or disconnects.
- Evaluate fulfillment center operations to make sure people, processes, and technology work together to deliver a seamless omnichannel experience.
- Automate communication flows from start to finish to ensure that customers always know the status of an order and what to expect next.
7. Not Outsourcing When Volume Scales.
Many retail eCommerce companies continue to try to handle their own fulfillment operations after they get to a point where scaling is imperative. It takes major capital to expand fulfillment operations, and many retailers grow faster than they can build. Outsourcing to a third party logistics (3PL) fulfillment partner alleviates the capital expense and need for real estate, infrastructure, staff, and all the liabilities and costs associated with it.
Take action:
- Entrust fulfillment to an experienced partner can scale to meet your needs now and will be able to handle your needs in the future.
- Discuss customer experience SLAs and expectations with your 3PL, and be sure a fulfillment partner aligns with, and has proven evidence of being able to deliver on those expectations.
- Communicate transparently and often with your 3PL to stay on the same page, address any upcoming high-demand promotions or sales, and to prepare for peak season year-round.
Radial Knows eCommerce
For 30 years, Radial has been providing tailored eCommerce fulfillment services and partnerships to major retailers worldwide. We offer the locations, people, processes, and technology needed to deliver exceptional omnichannel customer experiences from click to delivery.
Learn how we can support your retail business.
