To deliver the best shipping experience, retailers increasingly need to anticipate their customers’ need for real-time information.

Thanks to Amazon.com Inc., online shoppers not only expect free shipping, they also expect to receive products the day after they order them, or even within a few hours. That’s putting pressure on retailers to deliver orders cheaper and faster than ever before.

To deliver the best shipping experience, retailers increasingly need to anticipate their customers’ need for real-time information, says Bill Gibson, CEO of Deposco, a supply chain software company. “Customers expect rich data when making product selections—including accurate pricing, shipping fees, time in transit, availability and post-shopping service,” he says. “To offer that, retailers must provide a seamless shopping experience across all channels—but that is often hindered by disparate systems.”

Advanced warehousing tech lets retailers reduce shipping times

Bill Gibson, CEO, Deposco

The only way to provide real-time inventory information to customers and ultimately improve fulfillment and delivery is to take a unified commerce approach, and to integrate store, web and marketplace inventory into one system, Gibson says. “There’s certainly an investment in IT and supply chain software required to attack these fulfillment challenges, but significant profit retention can be achieved by implementing more automation between warehouse, shipping carriers and suppliers,” he says.

By using advanced warehousing technology and analytics, retailers may be able to increase sales and reduce shipping times across all channels, Gibson says. With Deposco’s distributed order management (DOM) applications, for example, companies can route orders for last-mile fulfillment based on cost, location, time and available inventory—significantly reducing shipping times and order fulfillment costs, Gibson says.

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“A DOM enables an order to be filled from the optimal location, leaving inventory where it’s still most likely to sell and can be shipped quickly at a low cost,” he says. “This strategy helps companies optimize their fulfillment and operations, while reducing the need to retain inventory in their own locations—letting suppliers drop-ship or house the inventory on their behalf.”

Most importantly, it improves the overall customer experience by allowing retailers to offer more product variety via the endless aisle, Gibson says. “Retailers benefit from the ability to bring more products to more markets faster, increasing their competitiveness and ability to attract and delight loyal shoppers,” he says. “These improvements have a ripple effect throughout other departments like merchandising, sales and customer service. With improved interoperability and data flows, companies can try to be more collaborative to plan for more profitable sales.”

Educational Development Corp. (EDC) was challenged to fulfill a growing number of online orders on time, causing a significant backlog in shipments to be processed. Using Deposco’s supply chain solutions, EDC eliminated paper processes and manual entry, and added scanning technology while also optimizing their inventory replenishment processes. The new supply chain solution improved warehouse efficiency without increasing headcount or adding more labor hours—helping EDC to reduce its cost to fulfill an order by more than 75%. The customized Deposco solution also allowed EDC to boost its warehouse output 150% to 15,000 orders per day from 6,000, which meant the company was able to lower costs while drastically increasing profits.

“We engaged industry experts to work with our management team to implement the enhancements, and the results have been very successful,” says Randall White, EDC’s CEO. “We’ve had an increase in sales but what we’ve really done is consolidate our expenses and honed in on how to increase the profit margins.”

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Fulfillment is extremely challenging, but it’s not impossible. “It takes the right combination of expertise and technology to make significant operational improvements, but fulfillment optimization can result in a big ROI in comparison with other investments companies can make,” Gibson says. “The ability to grow is limited only by the ability to sell and ship orders to customers.”

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