Consumers expect to shop where they want and when they want. They expect to go online and easily find the product they’re looking for. They want quick delivery and cheap, if not free, shipping, as well as an easy return process. And they want retailers to personalize their experiences by anticipating where, when and how they want to shop and offering marketing and promotions that are tailored to their shopping preferences.
For retailers to compete and succeed in this new e-commerce environment, they need to be able to fulfill orders via any channel. “They’re learning the hard way that being a web-only retailer or only brick-and-mortar retailer doesn’t work anymore,” says Greg Morello, president and chief commercial officer at Port Logistics Group (PLG), an omnichannel logistics provider. “Customer demands are forcing retailers to expand into additional fulfillment channels.”
This shift in customer expectations creates supply chain challenges for both the multichannel and single channel retailer. To satisfy shoppers who expect to find any product they want online, retailers across the board are feeling the pressure to bring more SKUs into the mix, Morello says. “But there is only a certain amount of shelf space—so companies end up with huge levels of inventory for products that don’t move,” he says. “That becomes extremely expensive to store and even more expensive to dispose of and work out of the supply chain.”
To get a handle on this, Morello suggests retailers monitor demand patterns to determine consumers’ locations and their shipping preferences. “Then they can make decisions around how to fulfill orders and what shipping promotions to offer,” he says.
One way that retailers can address their fulfillment and delivery challenges is by partnering with a third-party logistics provider (3PL) that can help navigate the complexities, Morello says.
“With the help of a 3PL, for example, a web-only retailer can sell its products through major retailers’ sites, such as Macy’s,” he explains. “The 3PL can ship that product directly to the customer, with packaging and branding as if it came from the retailer’s own warehouse or store.”
3PLs, such as PLG, also help retailers personalize the customer experience by including customized marketing materials and promotions in the actual order packages, Morello says.
“When fulfilling an order for yoga pants, for example, we can include customized, high-quality marketing inserts based on the customers’ current purchase and buying patterns right in their package,” he says. “It shows the customer that the retailer is paying attention to her preferences, but at the same time, it’s helping the retailer increase sales.”
3PLs can also help retailers provide an easy shopping experience by offering the customer the ability to update or cancel orders any time after the order is placed up until it is sitting on the truck. “The customer can pause the order, and then we get a message to stop processing it,” Morello says. “At that point, they can change the order how they like, and an incorrect product never leaves the warehouse. That kind of flexibility is very valuable to the consumer.”
Retailers should partner with a 3PL provider, such as PLG, that can handle both retail and wholesale logistics, and direct-to-consumer fulfillment, he says.
“To be successful, retailers also have to be able to sell in any channel,” he says. “Companies need to take that into account as they build a supply chain strategy, and then find a 3PL partner who will not only help them execute on that, but also delight their customers with every order.”Favorite