The experience that shoppers have with your ecommerce brand isn't limited to interactions with your website. It continues offline through the product fulfillment process – including how an order is packaged, the condition of the items in an order, and efficiency of the returns process. While your direct control over shipping and handling is limited during the last mile, there are a few things you can do before packages leave your warehouse that will go a long way toward giving customers a delivery experience that makes a good impression.
In a Harris Poll survey (funded by packaging manufacturer, Sealed Air) of more than 2,000 U.S. adult consumers, 66% believed that an item’s packaging tells them something about how much the brand cares about them. From excessive or messy dunnage (like Styrofoam peanuts) to small products in oversized containers – when customers are left to do the dirty work of cleaning up all that wasteful material, their experience with your brand suffers. Customizing your packaging to an optimal size can not only help create a better brand image in the eyes of your customers, it can reduce shipping and materials costs over the long-term.
In the previously mentioned survey, 59% of consumers believed that retailers and carriers are equally responsible for damage to a product that was ordered online. By right-sizing your containers and using the latest in dunnage technology, you can better protect your shipments and spare your customers the disappointing experience of waiting for an order, only for it to arrive in less than mint condition. Additionally, since customers are more likely to place the blame on you if your products arrived damaged, strive to work more closely with your carriers and/or 3PL provider to find solutions for reducing damaged inventory.
By mastering reverse logistics, you can minimize the cost of the returns processing and recoup lost profit from the returned product. But more importantly, customers love a smooth returns process, so your customer satisfaction can increase as well. Remember: Every return is another point of engagement with your customer. It should reflect the same focus and attention to detail as every other part of the customer experience. Once you assure a customer that your returns process is easy, then you eliminate hesitation from the next purchase and convince them to shop with you again and again.
Continuous process improvement strategies can make or break businesses in the order fulfillment industry. But with day-to-day operations as complex as they are, it can be challenging to rethink processes in order to find and fix inefficiencies. If you find yourself struggling with improving your fulfillment capabilities, stop and look closely at these essential areas.
Costs per order
Group and measure your fulfillment expenses into categories of
- Direct and indirect labor
- Facilities (including operating expenses like utilities and security)
- Shipping supplies
By understanding the financial impact each area has, you'll be better prepared for identifying where improvements will net the greatest ROI. Since freight expenses are usually greater than all of the other areas combined, renegotiating with carriers for better rates is a common starting point for improving cost efficiency. Enterprise shipping systems (like what we provide to our clients at Fulfillment Works) are excellent for streamlining this process for ongoing freight cost optimization.
Analyze your service workflows and their performance metrics. Compare your metrics with industry averages to see how you measure up. Similar to understanding your costs per order, the goal here is to hone in on the areas that will benefit the most by improving efficiency.
Optimizing the layout of your facility and how you slot inventory can yield major efficiency improvements. Be sure to periodically review your slotting assignments to account for feedback from pickers or changes in order volume.
Consider whether opening more distribution centers would help you reduce shipping costs and delivery times. Strategically located DCs put inventory closer to customers, which improves sales through better satisfaction rates. In most cases, an in-house multi-DC network is not cost-effective to implement – but that doesn't mean you can't enjoy the logistical advantages of a new distribution center. For many companies, outsourcing fulfillment to a third-party logistics provider (3PL) is a better way to efficiently set the stage for rapid growth and improvement of services. Since 3PL providers already have robust distribution networks established, they can help clients ship products to more customers, faster and at reduced cost.
Most folks think of warehouse buildings as big empty rooms for sale or lease. But if you've ever considered expanding your ecommerce business by opening or moving to a new distribution center, you know there's a lot more to those "big empty rooms" than meets the eye. Before touring potential properties, identifying your space requirements in detail is crucial for finding facilities that meet your needs today, and in the future. When shopping for warehouses, keep the following ideas in mind to help you find facilities that will fit your space and functionality requirements.
In product fulfillment and distribution, the height of a warehouse is just as important as its square footage. A low ceiling building obviously requires many more square feet of footprint space to have the same cubic capacity. Use square feet when planning how much space is needed for all department functions (staging areas, packing stations, office areas, etc.). Use cubic feet when planning bulk storage areas - making sure to account for your maximum pallet height, the total number of pallets you are planning to store, and the minimum clear height required by local regulations.
Finding a building with the right amount of cubic space doesn’t mean much if it’s arranged in a sub-optimal footprint. Consider how the warehouse’s shape will influence space planning, workflow, and peak productivity. For example, a long, narrow, or L-shaped building may negatively affect the flow of merchandise, create congestion points, and extend travel time for pickers.
Lot size & expansion potential
If you were to expand a facility in the future, what’s the maximum footprint you could achieve? Would there still be sufficient space for employee parking and shipping truck access? If you’d only be able to expand linearly, beware of creating a sub-optimal building shape.
Certain types of products and warehouse devices need stable and clean environments with minimal exposure to things like dust, temperature swings (which create condensation), humidity, and excessive heat. Evaluate facilities for the quality of climate control units, airflow, ambient temperature, and maintenance requirements for minimizing dust and dirt.