Blog postsJune 14, 2018
3 Things To Consider When Weighing Your (Delivery) Options
The logistics that support a compelling delivery promise require a lot of work behind the scenes, but consumer demands for better delivery options make a strong fulfillment strategy critical for growing your business.
We all know how we got here. Amazon spent decades building an incomparable eCommerce logistics infrastructure that makes high-volume, free, two-day delivery possible for its millions of Prime members. Now, its two-day promise isn’t even its fastest offer—for many Amazon purchases, next- or same-day delivery is available and free.
Matching Amazon’s delivery promise isn’t possible for most retailers, nor does it make sense. But offering fast and affordable delivery as an option does. For most, customer loyalty is more about your products and the experience they have when engaging with your brand—from discovery to check out to receiving their order—and how that meets expectations. How you fulfill orders is a significant piece of the buying experience.
Here are 3 things to consider when building out your logistics strategy:
- Determine which delivery promises are right for your customers
- Understand all your fulfillment options that will help you meet those customer demands
- Consider outsourcing expertise to augment your supply chain
Determining your delivery promise
We live in a world of data. Assumptions and intuition don’t drive business decisions, quantifiable metrics do. Understanding your product profiles and what motivates sales determines the delivery options that are right for your customers and your business. Do they want fast shipping? Free shipping? A highly curated delivery experience? Chances are it’s a mix of everything.
According to a UPS report, 74% of consumers say “free shipping” is the most important delivery option and 44% will choose a slower ship time if it means it’s free. However, 75% also said they are willing to pay a premium for expedited shipping—depending on the need. As consumers, clearly we want options.
Consider this: an online consumer packaged goods (CPG) company that sells everyday products may offer subscriptions and/or fast replenishment—getting toothpaste delivered every month or running out and wanting it the next day. Oppositely, a luxury clothing retailer may offer more delivery options that account for both immediacy (need new shoes for tomorrow’s event) and also the willingness to wait (want new shoes, but not for tomorrow).
Thankfully, many retailers and brands have the data to support what delivery options are right for their customers. Now, it’s about ensuring those delivery promises are kept.
Fulfilling your promise
Having a compelling delivery promise is important, but you need the right solution and operational rigor to make sure those expectations are met—on every order.
Since the rise of eCommerce, more and more data has been published about the importance of the post-purchase experience—the time between your customer hitting “Buy” and actually opening their package.
eCommerce is complex. Competitors are just a click away. So much effort is put into getting your customers to checkout on your site—advertising, storytelling, an easy-to-use website, the right delivery promise—but once someone submits their payment, there’s a pause. You made a promise on your website about delivery and now it’s about fulfilling that promise.
Post-purchase operations can feel like it’s out of your hands. A package could get lost or damaged in transit, there could be weather events that delay delivery, a customer could have entered the wrong address. Some things we can’t control, but making sure you’re in control of what you can be and having the right solutions in place to troubleshoot the uncontrollable is key to the customer experience and keeping your business running.
Because we live in a world of information, that’s exactly what we have to offer to each and every customer—tracking information, customer service, simple returns policies. These are equally as important to maintaining your brand as your social advertising strategy.
But, as a business, you shouldn’t be left in the dark either. Having the right fulfillment solution and logistics partners helps you stay in control and gain end-to-end visibility so you have more control over the uncontrollable.
You have options on delivery, too
You have spent thousands of hours creating amazing products. You know your customers and have built a brand they’ll love. Before eCommerce, big-box retailers had entire departments dedicated to supply chain and logistics. Many still do. But, to run a successful business, you no longer need to be an expert in fulfillment and logistics. You can partner with someone who is.
For fulfillment, you have options. Some of the most common are:
- Buying or renting your own warehouse
- Hiring a third-party logistics (3PL) provider
- Selling into a marketplace like Amazon that manages logistics and fulfillment
The above options enable businesses to reliably fulfill orders, but they come at a price. To buy or rent a warehouse, there are fixed-capital investments involved and then there’s the cost of operating it. With a 3PL, there are long-term lease agreements that provide little flexibility if and when there’s a change. If you need more than one facility, often times you’ll have to multiply efforts to source and procure the location and services you need. And with marketplaces, sellers often end up forfeiting valuable customer and sales data when outsourcing operations completely.
Finding a solution designed for the needs of your customers and business
There’s a fourth option. In the last few years, new logistics solutions for different supply chain functions have been cropping up—making it easier for dynamic businesses to manage supply chain operations and meet demand.
A flexible eCommerce fulfillment solution—one that isn’t mired in fixed locations and costs—enables you to build a dynamic fulfillment network that matches your needs today and tomorrow. The ability to scale down capacity and services throughout the year ensures your business isn’t spending money on resources you don’t need. Conversely, during peak seasons, you can scale up your fulfillment network to add more locations, more square footage, and more resources to meet your customer demands and deliver on your promise.
Not everyone needs to be a fulfillment expert. Finding a fulfillment and logistics partner that can help you augment that function in your business so you can stay focused on your customers is key to customer satisfaction and loyalty.
Look for solutions that are simple, transparent, and scalable—from freight forwarding to fulfillment to transportation, there are solution providers that can help you build a dynamic supply chain designed for every stage of your business growth.