As brands make investments to accelerate their direct-to-consumer efforts, some are finding the fulfillment process to be costly and logistically challenging. But there are technologies and “tactical approaches” that brands and retailers can take to improve efficiencies and drive sales.
Stephan Schambach, founder and chief executive officer of NewStore, feels the pain of companies struggling with fulfillment. He said today’s shoppers “have been trained to expect goods to be purchased easily and shipped quickly, and at a reasonable cost. It’s the Amazon effect.”
To make it work, Schambach said brands and retailers should be shipping goods directly from stores. To succeed, though, they “must have accurate inventory and modern technology that makes shipping from store easy.”
“Leveraging stores as fulfillment centers is not a new concept,” Schambach told WWD. “It’s been a topic of discussion for more than a decade, however, it’s still a major challenge for retailers. Traditional point of sale [POS] systems are clunky and difficult to use, and historically haven’t been connected into order management systems [OMS]. This makes it extremely time-consuming for stores to be leveraged for fulfillment. Legacy systems simply were not designed for omnichannel.”
Fulfilling online orders from stores makes clear business sense, according to experts, because it directly addresses many of the challenges of omnichannel retailing. Schambach said retailers and brands need to address staffing, and “ensure you have enough associates on the schedule to manage the added tasks that come with store fulfillment.”
With merchandising, he noted that companies need to take into consideration “the historical supply and demand for both in-store, as well as online orders and endless aisle in the region.” Schambach said retailers also need to “determine who will get credit for the sale and communicate it clearly throughout the organization” while also preparing and training staff “to handle the new processes.”
In regard to high costs, there are several approaches to keep in mind. Johannes Panzer, head of industry strategy for e-commerce for logistics solutions provider Descartes, told WWD that by “focusing on two major fulfillment components — streamlining and improving logistics processes — e-commerce companies are better positioned to mitigate extra spend.”
“By improving these processes, companies can find new opportunities to sell additional value-added services like more shipping options, additional white-glove service for bulky products, free shipping for longer delivery windows or an additional fee for two-day delivery,” Panzer said.
“What’s more, by implementing automated scheduling and optimized routing processes, businesses can offer dynamic booking, or more delivery choices [e.g., two- or four-hour window, same-day, next day, etc.] at the point of sale,” Panzer said. “In addition, by utilizing automated dispatch and tracking, retailers are better equipped to ensure successful delivery and swiftly manage hiccups in the process.”
Embracing automation can also help. “By eliminating manual and paper-based systems and automating warehouse operations with an e-commerce-enabled warehouse management system [WMS], companies can increase the speed, agility and accuracy of fulfillment processes,” Panzer explained. “These automated systems are also user-friendly and can dramatically reduce the amount of time required to train warehouse staff — ensuring processes run smoothly and timelines are met.”