Online Retailers—Five Customer Fulfillment Resolutions for 2008
Damon Schechter, Shipwire founder and CEO, and author of, “Delivering the Goods: The Art of Managing Your Supply Chain,’ shares lessons learned from helping online retailers with their holiday warehousing and shipping demands.
By now online retailers have recovered from their holiday shipping headaches. And what a season it’s been. According to comScore, consumers more than $29 billion online over the 2007 holiday season, up 19 percent over last year, and on December 10 (“Green Monday”), e-commerce sales jumped a whopping 33 percent over the same day last year, for a single-day record of $881 million. Those increased online sales translated into greater demands for inventory and shipping, at times stretching retailers’ fulfillment operations to their very limits. So now is the perfect time to pick some new resolutions for 2008 to avoid shipping and inventory headaches in the next holiday season—and all year long.
1. Don’t pay too big a price for free delivery. The big trend in online shopping this holiday was offering free delivery. The risk is that shipping costs can exact a big price – especially when major carriers are again raising their rates this January. You can’t control how much they charge per mile, but you can decide how many miles your products need to ship. Warehousing solutions designed for smaller businesses now make it possible to follow the example of Fortune 500 companies that locate their inventory closer to the end buyer. When your Arizona customer gets product from the Los Angeles warehouse, and your Cincinnati buyer’s order is shipped from Chicago, you get real shipping cost savings.
2. Limit surprises to birthday parties. Renting a warehouse is rarely as simple as it is supposed to be. If you lease your own, you never know when you’re going to face repair costs, injured employees, or too much growth for your space. Some warehouse services handle the risk, but they also have hidden costs that make your once-attractive lease not so attractive. Why not convert your warehouse lease to a monthly service—one that doesn’t require pre-payment and provides you crystal clear visibility into all storage and shipping costs. It’s one way to get the best in professional warehouse management while losing those unwanted surprises.
3. Delight your customers. Customers rate merchandisers, not just on their online shopping experience, but how easily they can get the right product delivered, on time, and in good condition. Now the analytics that large retailers have used to improve customer service—like "breakage", "shrinkage", "returns percentages," are becoming available to small and mid-size businesses via fulfillment service providers. Look for Internet-based warehousing and shipping services that, not only offer real-time order fulfillment as soon as customers push “buy,” but also real-time reporting and carrier tracking, along with analytics to evaluate product delivery effectiveness. And when problems pop up, make sure your provider also offers easy claims submission and fast product redelivery.
4. Reduce your retail carbon footprint. You may have eco-friendly products based on renewable resources and organic ingredients or fibers. But how green is your shipping? Look for warehousing services that support innovative new packaging and don’t require items to arrive on pallets. By reducing product packaging, you lower how much fuel is required to transport your merchandise, along with your costs. You can further reduce your need for fuel by placing merchandise in multiple warehouses that are closer to customers, minimizing the carbon footsteps required to get to their doorsteps.
5. Focus on growing your business. Successful business owners know that sales and marketing are primary drivers of business growth. Make sure you’re not spending more time on order fulfillment, returns and packaging than you are on generating more sales. If you are, consider outsourcing your order fulfillment. When you’re not consumed with how your products get to buyers, you can focus on growing customer demand.
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