According to a recent report from Shopify, order fulfilment is emerging as a competitive differentiator for 2021 and beyond as consumers demand fast and free shipping with sustainable and branded packaging. This emerging trend is one of several identified in the recently released Future of eCommerce report based on data collected from online sales in 2020. While we can all agree that COVID helped to expedite the popularity of eCommerce, according to the report, the actual numbers show 10 years’ worth of eCommerce growth in just 3 months! With this type of growth, it’s going to take a lot more than just a well-designed website to thrive in the future, and it’s no surprise that fulfilment is one of the biggest trends identified by Shopify. Other trends identified in the report include:
- Record online competition
- New consumer behaviour is helping to reshape the future of eCommerce
- Consumers started purchasing items rarely bought online before the pandemic and the desire for convenience and immediacy when shopping online significantly increased
- Marketplace domination (think Amazon) is challenging companies' brand-building efforts
- With half of all global purchases happening on marketplaces, consumers are using these types of websites as new search platforms to find solutions rather than brands
- Customer acquisition costs are increasing worldwide across channels
- Businesses need to prioritize retention and come up with ways to incentivize and reward repeat and loyal customers
You can find the full Shopify Future of eCommerce report here to read more about each trend above, but today we are going to focus on how wholesalers and distributors that also sell online can use fulfilment to their advantage to win more customers and thrive in the future.
Key takeaways for wholesalers and distributors
As we learnt over this past year, eCommerce emerged as an opportunity for every type of business, including wholesalers and distributors. While many wholesale companies were already selling online, 2020 reiterated the importance of having proper systems to manage front-end sales and back-end operations when trying to reach customers, and according to Shopify, the following key trends emerged around order fulfilment:
Consumers are favoring businesses that provide fast, free and sustainable shipping
- 67% of U.S. consumers expect same-day, next-day or two-day delivery times. Add to this the fact that 64% of global consumers want their orders shipped for free, and it’s obvious that successful companies need to put fulfilment at the forefront of their business priorities. If that wasn’t enough pressure for small businesses, 75% of consumers are also more likely to buy a product that has been packaged sustainably.
Carrier and shipping costs are increasing
- As more and more consumers looked to purchase online in 2020, shipping companies were operating at peak season levels for most of the year, resulting in higher service rates and FedEx announced that customers worldwide can expect an average 9% rate increase for 2021.
Consumer expectations are becoming more complex
- More and more consumers expect free returns with the worldwide total cost of returns topping $1 trillion in recent years.
How to improve order fulfilment to succeed in 2021 and beyond
While it may seem daunting to move forward after hearing stats like the above, the good news is that there are lots of ways your business can automate processes, streamline operations and increase efficiencies to remain competitive and thrive in the future.
eCommerce ERP Integration
First and foremost, if 2020 has taught us anything, it’s that eCommerce ERP integration is a must. Proper integration means that there is minimal (if any), human intervention between customers placing an order online, and warehouse staff being able to pick, pack and ship the order. Proper integration pushes and pulls data between your ERP and eCommerce site in real-time and provides one system to manage sales from all channels.
Improve Shipping Processes
Getting a handle on your shipping processes will help to reduce costs, keep customers happy and improve order fulfilment. Rate shopping functionality allows you to quickly compare carriers to find the best price and shipping method for each order. Even if you have a good relationship with a local carrier company, it is always a good idea to sanity check the prices they are charging and have a back-up if they become too busy. Consolidating shipments that are going to the same region can also help to cut down on costs and shipping times.
Proper warehouse management and organization helps you improve your picking, packing, shipping and receiving processes. With bin and shelf labelling and an optimized warehouse layout, you ensure that you have easy access to fast-moving items and can quickly find the right product for each order. Virtual warehouses allow you to maintain separate inventory for eCommerce sales in the same physical location as inventory for wholesale orders to better manage stock levels.
Mobile Barcode Scanning
Mobile barcode scanning allows you to scan product as you pick items, helping to cut down on the number of picking errors and speeding up the order picking process. Employees can scan items into boxes as they walk the warehouse floor or bring items to a packing station for a double-check. Barcode scanning makes it easy to find products when you don’t know where they are in the warehouse and helps improve the picking process when dealing with different inventory items that look similar. Because barcode scanning helps to reduce the number of picking errors, this also helps decrease the number of returns due to shipping the wrong product.
Automate Inventory Management
Automating the inventory management process allows you to accurately forecast demand by making use of min and max levels for purchasing and replenishment. Tracking inventory from one system allows you to fulfil orders from multiple sales channels, and if you have multiple warehouse locations, look for a system that automatically fulfils orders based on whichever location is closest to the customer. This helps reduce shipping costs and shipping times.
How Blue Link can help
With a focus on wholesale and distribution, Blue Link ERP has been helping businesses automate the order fulfilment process and streamline operations for over 25 years. We understand that wholesale and distribution is changing, and have advanced functionality for managing online sales through integration with existing eCommerce sites and marketplaces such as Shopify and Amazon, plus our own B2B Online Ordering Portal. Learn more about how the right software can help your business grow and succeed today and into the future.