The digital age has brought along the rapid expansion of eCommerce. And with this growth, the logistics of fulfilling orders have become a crucial component in the customer’s online shopping experience. From the moment the ‘Buy’ button is clicked, the process of eCommerce fulfillment kicks off. It entails everything from receiving the order, processing it, selecting the right product, packaging, and ultimately shipping it to the buyer. While businesses can opt to handle this entire process in-house, many choose to partner with specialized fulfillment providers to streamline operations.
According to a market analysis report by Grand View Research, the eCommerce fulfillment services market was worth $97.33 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 13.9% from 2023 to 2030. The underlying cause? A seamless fulfillment process has the power to convert a one-time shopper into a loyal customer, magnifying its importance.
However, with the boom comes the challenges. ‘Last mile delivery’ represents the concluding, and often the trickiest phase of the fulfillment process. Here, products are transported from local distribution centers to the end consumers. Factors like unpredictable traffic conditions, multiple delivery stops, and high customer expectations - particularly due to standards set by giants like Amazon - make it a complicated affair.
A successful eCommerce shipping strategy should take into account product dimensions, shipping rates, packaging, service levels, and the intricacies of tracking and returns. It’s worth noting that many customers willingly pay a premium for expedited shipping, making it imperative for businesses to offer a spectrum of delivery options.
Outsourcing fulfillment? Enter third-party logistics (3PL) and fourth-party logistics (4PL) providers. Leading names in this space include Amazon, Ingram Micro Services, and FedEx. Their expertise and infrastructure make them attractive choices for businesses that prioritize top-tier customer experiences.
The Financial Side of Order Fulfillment
Fulfilling an order isn’t free. For small businesses, there’s the time employees invest in processing and picking orders. Add to this the costs tied to package dimensions, weight, distance, carrier preferences, and potential seasonal charges. But that’s not all. Businesses must also factor in the product’s own cost, any transaction fees, desired profit margins, international customs duties, and perhaps most importantly, the price of customer satisfaction.
Zeroing In On The Right Fulfillment Partner
Selecting a fulfillment provider isn’t a decision to be taken lightly. Three main pillars guide this choice: cost, speed, and the quality of the customer experience. In a survey conducted by UPS, a whopping 80% of customers placed higher importance on real-time tracking than on attributes like swift or free shipping.
Fulfillment Metrics To Keep An Eye On
- Customer satisfaction: Tailored, brand-specific alerts are a treasure trove of feedback.
- Perfect order rate: This metric looks at shipments that have been dispatched without a single hiccup.
- On-time delivery: Meeting or exceeding those promised delivery timelines is key.
Tackling Fulfillment Obstacles
From addressing the surge in orders during peak seasons, managing returns, navigating delivery exceptions due to inaccuracies in addresses, to grappling with unpredictable weather-related delays, transit losses, and potential package damage, the challenges are multifaceted.
The solution? Open and effective communication. 85% of online shoppers say that a poor delivery experience would prevent them from ordering from that retailer again.
Optimizing The Fulfillment Process
Modern eCommerce platforms are stepping up to the challenge. For example, consider project44’s case study on UrbanStems, a rapidly growing modern floral and gifting company that was struggling to gain visibility into their perishable deliveries and address a high volume of WISMO inquiries. To get on top of these issues and deliver a superior last-mile experience, UrbanStems partnered with project44 to optimize their delivery process. The results?
- 63% reduction in WISMO inquiries
- 85% customer care cost savings
- 75% decrease in time to resolution
Dive Deeper with the Full Guide
For a more detailed breakdown of the world of eCommerce shipping and fulfillment, we highly recommend checking out the comprehensive eCommerce Shipping and Fulfillment Guide. Use it as your roadmap to mastering the complexities of the eCommerce landscape.