Support Services: Navigating the Minefields of Shipping to Retail1 Apr, 2013 By: Ayal Latz Response
Following are several frequently asked questions we hear from marketers about shipping specifically to retail.
Question 1: Are all orders fulfilled the same way? What are the differences?
Marketers are faced with varying requirements for order fulfillment. The three most common categories are:
- Direct to Consumer (D2C): In the DR world, shipping to the consumer is the most common form of fulfillment; however, consumer expectations continue to change the landscape and challenge marketers who are competing for the consumer’s business.
- Retail Distribution (B2B): This is usually the end goal for DR marketers. Selling to retail often requires shipments to distribution centers or direct to stores in bulk quantities. The order fulfillment process is a different animal than shipping to consumers.
- Drop Ship: This hybrid between D2C and B2B involves direct-to-consumer fulfillment by the marketer on behalf of the retailer. This method is becoming increasingly popular as retailers expand their product assortments without the need to increase their distribution capabilities.
Question 2: Why is retail distribution important?
“The window of exclusivity for As Seen On TV products has gotten narrower, with some products introduced at traditional retail at the same time as their TV launch,” notes Rick Petry, creative writer and industry guru.
Increasingly, retail distribution for DR products is built into business plans. DR is the launch vehicle, charged with establishing a brand and a success story. Retail is the goal. Why? High volume opportunity is one carrot. Adds Petry “This acceleration helps keep knock-offs and competitors at bay.”
Question 3: How do shipping D2C and B2B differ?
Shipping direct to consumers involves picking and packing individual orders. Retail generally involves full case, or even pallet, quantities. In D2C, shipment volume is uncertain and is related to media timing controlled by the marketer, but also the success of that media. In B2B, shipments of known quantities are made in bulk well in advance of the retailers’ event.
Also, supply chain issues are different. With D2C shipping, marketers often rely on just-in-time product arrival to support the media campaign. With B2B, large quantities must be shipped in a predetermined window.
The most important and challenging difference is in shipping protocols. In D2C, the options are limited. In B2B, each retailer has its own set of requirements, which can be extremely different from one another.
Question 4: What do I need in order to ship to retail?
Sophisticated technology and ample shipping expertise are the keys. The software needed to ship to retail is expensive and complicated. A strong IT resource is critical. Generally, marketers do not have the budget to ramp up and do this function themselves even with higher retail volumes.
Question 5: What is EDI and how do I implement it?
Electronic Data Interchange (EDI) is a method for transferring data between organizations. The retail world has adopted EDI as the preferred method of transacting purchase orders, shipment notification and even invoicing. However, each retailer has the flexibility to set its own requirements within the data fields.
Due to the cost and complexity of EDI, more and more marketers are choosing to outsource their EDI to value added networks (VANs) and their fulfillment partners. These parties are already integrated with virtually all retailers allowing the marketer to piggyback on the existing connections.
Question 6: What are the marketer’s challenges?
Understand and appreciate the complexities of retail distribution. Rely on an experienced fulfillment center to help. They have the knowledge, software, equipment and physical space to handle the task.
At Response Expo this month, you will be able to meet with experienced fulfillment partners who are able to help you understand and implement the various strategies. ■