Support Services: Does Your Fulfillment Partner Have the Right Technology?1 Aug, 2013 By: Ayal Latz Response
Technology drives everything in today’s fulfillment operation. System capabilities evolve constantly. This drives efficiencies, decision making and the customer experience. Were your PC and software the same five years ago as they are today? It’s not close.
The same goes for that of a fulfillment provider. Many in the direct space have worked hard to build robust, PCI-compliant platforms that support the sales cycle. But this doesn’t mean that they are fast, efficient or capable of making cost-saving decisions. Progressive fulfillment providers understand the value and opportunities that modern technology brings to its clients.
A progressive architecture begins with an integrated E-commerce platform, through order management, payment processing and order fulfillment. It continues with shipping via logic-based optimization to support customizable goals that balance cost and transit time, and back in from returns when necessary.
One of the most significant trends in direct marketing is the development of increasingly sophisticated technologies for back-end processes, including fulfillment. Read on! This is not just a boring article about technology. It is about the cost of not using technology.
Perhaps the most notable change is a shift from free shipping to fast shipping. This is consumer driven, because as more companies offer fast shipping options, consumers become more accustomed to receiving their orders quickly.
What are the negative consequences for marketers who do not adapt? First, they will see higher abandon rates at the shopping cart. Promise the consumer shipping in two-to-four weeks and watch them bounce away from your website. Second, slow shipping means more WISMO calls (“Where is my order?”) to customer service. Each call costs you money. Third, longer ship times lead to increased opportunity for buyers’ remorse.
Fast shipping can be a major challenge for marketers. The nuts to crack include:
- Process time: How long does it take for orders to get from the point of acquisition (call center or website) to fulfillment? If the answer is more than a few seconds, it’s unnecessarily long.
Technologically sophisticated partners are able to support live data feeds in real time. The faster the data gets to the warehouse, the sooner the order can be picked, packed and shipped.
- Fast fulfillment: If you don’t have this, you will spend unnecessarily on faster shipping options to achieve the goal. First, find a fulfillment partner that has the “fast” mindset — not all do! The right partner not only understands the value of fast turnaround, but also employs advanced systems, including an order management system (OMS) and warehouse management system (WMS) that are key to moving orders efficiently through the fulfillment process. The systems ensure both accuracy and throughput.
- Transit time: Advanced fulfillment providers have logic-based technology that determines the optimal shipping carrier and method to utilize in order to accomplish the marketer’s goal at the lowest possible price. For example, these systems can be programmed to choose the lowest cost (ground service for any customer addresses that are within a two-day transit from the warehouse) but upgrade the shipping method (to two-day air for those that are not). This is a great way to offer two-day service without paying two-day rates in all instances. The newest software packages that make a difference to optimize shipping costs and transit times can cost more than $100,000. Most marketers cannot afford this investment on their own. But experienced fulfillment centers are constantly researching the newest tools and upgrading to gain efficiencies.
- Geography: A strategic location will play an important role to minimize distance and cost to the consumer. Compare these two scenarios: ship 80 percent of your orders across the country, taking four-to-six days; or ship 80 percent of your orders closer to the customers in two-to-four days.
Be certain that you partner with a fulfillment provider that embraces technology and employs the best systems available — and one that upgrades regularly. Our industry offers many opportunities for marketers to meet with qualified fulfillment providers. Now is a great time to reach out and learn what you are missing. ■