Nearly 60% consumers are now willing to switch to a competitor with quicker and cheaper shipping.
Consumers are comparing their shipping options ahead of purchasing. They’re asking, “Can I find a better deal somewhere else?”
And it’s not enough to just win the sale at check out— you also have to deliver as promised. A negative shipping experience can have irreparable damage. 83% of consumers are less likely to re-purchase from a retailer after a negative delivery or shipping experience. And, about a third of consumers will leave a bad review or post on social media about it.
But, a lot of sellers still struggle to meet consumer delivery expectations. 95% of companies have experienced delays or bottlenecks in their order fulfillment operations in the last year . 45% faced issues with order picking and processing, while 37% struggled with inventory management.
This past year has put a lot of pressure on supply chains, exposing serious weaknesses. Most thought they had years though to fix these shortcomings in preparation for a shift to eCommerce, but the pandemic forced 10 years of growth in just 3 months.
Going forward, it’s clear that your supply chain operations can be a differentiator— creating value for your business and your customers. However, you need to digitally-enable your supply chain to meet today’s customer expectations and lower overall costs.
Benefits of Digitally-enabled Supply Chains
To address their most pressing fulfillment and distribution challenges, warehouse operators are:
- Working towards enhancing their process capabilities (45%)
- Making staffing changes (27%)
- Implementing or upgrading of order fulfillment software applications—including warehouse execution systems or WES (27%)
- Implementing or upgrading of order fulfillment technologies (24%)
- Using automated goods-to-person picking technologies (20%).
In other words, they’re investing in new technologies and digital processes to adapt their supply chains. But like any digital transformation, it’s more than just implementing a few systems. Instead, it’s a new mindset. It’s implementing technology that works in harmony alongside human individuals and new (or existing) processes.
When done right though, here’s the main benefits of a digitally-enabled supply chain that can differentiate your brand:
1. Same-day and Next-day Delivery
42% of warehouse operators say eCommerce’s biggest impact is dealing with customer expectations around same day/next-day delivery.
Consumers are increasingly raising expectations on fast shipping times. A few years ago 4 to 5 day was acceptable. Now, it’s either same-day, next-day, or two-day free shipping.
Nearly a third of consumers now say they feel frustrated when a company doesn’t offer same-day delivery. And, 74% say that after receiving same-day delivery, it made them more likely to purchase from that retailer again.
But, you can’t offer same-day or next-day delivery without automated workflows and strategically located inventory. You need a tight integration between your eCommerce platform and order management systems to sync new orders in time to your warehouse to pick and pack for next-day delivery.
2. Omnichannel Fulfillment
To get their products faster, consumers are open to different shipping options like Buy Online, Pick Up Instore (BOPIS), including curb-side delivery or traveling to an alternative pick up location with extended hours.
68% of consumers have made multiple purchases with BOPIS. Their main reasons for using it are: saving on shipping costs (48%), speed (39%) and convenience (28%).
BOPIS requires integrating your eCommerce and brick-and-mortar operations for a smooth experience. Read more about how to improve your BOPIS offering.
3. Real-time Inventory Visibility
Advanced operations rely on a single, global view of inventory and orders across your entire supply chain (including external partners). This global view allows you to know where inventory is at any given moment. It enables displaying accurate product availability across channels for customers, which can lead to increased purchases.
Real-time inventory visibility also enables you to opportunistically move inventory through your network as needed. You can send inventory to stores with high sales, avoid stock outs before they happen, and keep an optimized amount of inventory on hand to lower overall costs.
4. Fulfillment Partner Visibility and Control
In order to compete, many sellers are outsourcing parts of their supply chains to partners like 3PLs. But traditional order management systems made it difficult to work with external partners— their data and processes were in a black box. When an order was stuck in “to be fulfilled” status, you didn’t know when it happened or how long it’ll be there.
A digitally-enabled supply chain though relies on cloud-based infrastructure and web-service based integrations to optimize and automate processes. It allows you to treat all parts of your order fulfillment process as if they’re happening in the same organization—even if you work with multiple partners. Digital tools can give you real-time visibility (and control).
5. Improve Services, Lower Costs
As all commerce shifts to online, a natural consequence is rising costs of shipping and delivery. Most sellers are paying higher costs for transportation, warehousing, inventory storage, and packaging and material expenses.
Digitally-enabling your supply chain processes and technology can help lower costs like:
- Automatically choosing fulfillment carriers by factoring in location and delivery costs
- Dynamically route orders to the most efficient supplier
- Eliminate costly mistakes like late or wrong shipments
- Split orders to multiple fulfillment locations
- Accurately forecast demand to keep the right amount of inventory on-hand to avoid extra costs
- Reconcile shipping information, purchase orders, and payment terms (three-way match)
6. Build Resilience in Your Supply Chain
While the 2020 pandemic was an unexpected challenge, there will always be disruptions in your supply chain. They can be from natural disasters, transportation failures, product quality problems, price fluctuations, or even cyber attacks.
But the adoption of the right technology, processes, and infrastructure can help future-proof your business. You can diversify your suppliers, create redundancy for critical parts, and adopt risk evaluation tools. The goal is to build resilience in your supply chain so you can face any future challenges with confidence.
Long-time Seller Pulls Ahead with Revamped Fulfillment Operations
After 50 years in business, EasyCare knew they needed to make a change in their fulfillment operations. Initially, they did all their own warehouse management. But, they never felt efficient enough compared to the market leaders like Amazon. They realized operating their own logistics wasn’t worth their own financial costs or time to perfect.
They take the following steps to digitally-enable their fulfillment process:
- Outsourced to a 3PL partner Warehouse-Pro that was strategically located near their HQ and main customer based
- Implemented shipping software ShipStation to handle order tagging and automated workflows
- Integrated their ERP Sage 100 and ShipStation platform with nChannel. The new integration automated an order placed on the web to the product being picked and shipped from the warehouse.
The result? New orders (with all the right order detail) make it their warehouse within minutes of being placed online. This gives Warehouse-Pro plenty of time to ship as many orders as possible as same-day.
You can read their full story of how they use a 3PL to ship more orders same-day and handle returns like experts.
More Retail Supply Chain Management Resources
Forward-thinking sellers of all sizes are finding ways to digitally transform their supply chains and get ahead in their industry. They’re looking to transform their people, processes, technology and infrastructure to create value for their business and customers.
But, digital transformations don’t happen overnight. And every business and its supply chain is unique. There’s not a one-fit-for-all plan for success. It will take experimentation and effort to find what works best for your own business.
Keep reading about how to improve your supply chain management: