Home Retail Group Boss Terry Duddy, said “fulfilment will be the major differentiator for retailers in the future.” Several pieces of research have been published that show how right Mr Duddy was last year. Retailers are increasingly placing more importance on a strong logistics strategy for multi-channel growth.
According to the American Customer Satisfaction Index customer satisfaction with eCommerce at it’s lowest in 12 years. Online customer satisfaction fell 4.9% last year to a score of 78, the lowest since 2001. The report reveals that it was largely smaller eCommerce players that resulted in the overall drop in customer satisfaction.
ComScore and UPS published a recent report finding that online shoppers in Europe and worldwide have a preference for increased control over their shipping and delivery experiences. The survey includes data from more than 14,000 frequent online shoppers across six countries in Europe, as well as the US, Canada, Asia, Australia and Mexico. Consumers are demanding the ability to select delivery dates and times, and to reroute packages based on personal preferences.
So what does all this mean for the internet retailer? According to the research in 2013 the customers desire for flexible shipping led to 44% of shoppers’ abandoned carts due to unsatisfactory estimated delivery times — a sharp increase over 2012. It is clear that shipping is driving consumer decision making leading retailers having to explore new ways to leverage logistics for multi-channel success.
An interesting example of this is in India where the recent boom in eCommerce sales has lead to a logistics bottleneck for India’s online retail industry. The same effect is present in the UK where logistics companies have had to adapt quickly to meet the changing demands of eCommerce.
The key to logistics success, and ultimately customer satisfaction, is dependent on logistic strategy essentials that seem to be separating leading multi-channel retailers from the rest.
The need for a single view of inventory across all channels that accurately feeds back stock levels is key to satisfying customer needs. This ensures they do not make a purchase of stock that is not available.
A good warehouse management system will provide intelligent reporting by using order data to accurately predict when products are likely to stock out. The best systems will take into account lead times to help prevent retailers from ever going out of stock and disappointing customers.
An efficient returns management solution should flag a return so the right department knows that an order is back as soon as it arrives. The best logistics companies may even be able inform the customer by email of the returns arrival at the distribution centre, easily cutting down customer service enquiries from anxious customers wanting an acknowledgement of a return.
The ability to track an orders progress from end to end in real time is now very important to meeting customer demands for flexibility. If a customer wants a change in delivery time or location, companies need to be able to see exactly where items are in the delivery chain. By integrating with carriers and providing a real time view of orders from the cart to the door in one place companies can more easily provide this level of flexibility.
Batch and lot control
Orders need to be dispatched in strict date order based on their best before dates and should be logged in the system upon arrival. A fully automatic batch and lot control system should link batches and best before dates so it is fast and easy to ensure specific best before dates can be picked for those major trade clients who demand longer shelf life.
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