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Warehousing & Fulfillment

Why E-Commerce Fulfillment Is Just As Important As Sales & Marketing

Warehousing & Fulfillment
October 4, 2019
10 min read
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Whether you’re a large enterprise jump-starting a direct-to-consumer sales channel or a start-up just beginning to sell your products, developing a robust e-commerce strategy should be at the top of your priorities list. But before companies dive too deep into their online marketing and sales efforts, it is important to take a step back and consider all the steps involved with building a sustainable, long-term e-commerce strategy.

 

A Short E-Commerce Case Study

Almost three years ago, I was having lunch in Atlanta with a friend and aspiring entrepreneur who had just launched her own fashion brand. The clothing line, which consisted primarily of graphic tees and athletic apparel for young adults, had been specifically tailored to target my exact demographic. However, the apparel and retail space is an incredibly tough market to compete in. And as a marketing major who created ads for a living, I was itching to pry further into her go-to market strategy.

As we sat down and began our discussion, I was immediately impressed with my friend’s tactical approach to online sales. Having clearly understood the importance of establishing an e-commerce presence, she had hired a top-tier web designer to construct a visually appealing website, and the Google and Facebook ads she had deployed were garnering a significant number of impressions. After just 2 months of her site’s “go-live”, she had already attracted 5,000+ unique visitors. Very strong numbers considering her limited funding. However, only a few dozen of those visitors had actually bought something, and many of those were either friends or relatives. So, in hopes of helping out a friend and gaining a shirt, I decided to visit the site and make a purchase of my own.

About a week after our lunchtime conversation, I jumped on to her website to pick a shirt. It didn’t take me long to find one I liked. But as I went to complete my purchase, I stumbled across the root cause of her low turnover. The checkout experience was a major burden. While browsing the site was easy and you could very intuitively scroll through the range of items for sale, the nearly five-step checkout process was confusing and tedious. It wanted me to create an account, sign up for a newsletter, and refer a friend. I was just trying to buy a shirt. And, to make matters worse, shipping my $25 purchase would cost me $10. Paying $10 for shipping a $25 item seemed excessive. Clearly, the checkout and fulfillment pieces of my friend’s e-commerce strategy had taken a back seat to marketing.

 

E-Commerce is More Than Just a Marketing Platform: It’s an Entire Business Model

Whether you’re a large enterprise jump-starting a direct-to-consumer sales channel or a start-up just beginning to sell your products, developing a robust e-commerce strategy should be at the top of your priorities list. Given the rapid growth of both B2B and B2C e-commerce over the past decade and the strong projections for growth moving forward, businesses of all sizes and industries are investing heavily in their online presence as they seek to gain market share across a new generation of shopper. But before companies dive too deep into their e-commerce marketing and sales efforts, it is important to take a step back and consider all the steps involved with building a sustainable, long-term e-commerce strategy.

DEVELOPING AN END-TO-END E-COMMERCE STRATEGY


Considering all the steps to building a comprehensive e-commerce strategy

As businesses enter the e-commerce arena, brand awareness and positioning are almost always top-of-mind. In a world where companies collectively spend hundreds of billions of dollars on media advertising every year, data indicates that the average consumer is exposed to ~10,000 ads every day. These are the types of figures that keep business leaders up at night, and often serve as the driving force for companies to invest significantly in online ads and sales campaigns as they seek to stay abreast of their competitors. But what many businesses fail to recognize when deploying these campaigns is that streamlining their “back-office” e-commerce workflows (i.e. the workflows consisting of an online order being captured, fulfilled, and delivered to the customer) are just as important as optimizing the front-end marketing and sales efforts.

While many businesses invest significant time and money simply trying to drive customers to their site, they are less proactive in evaluating what happens when these customers actually visit their site and try to make a purchase. All too often, the checkout process is cumbersome, and the shipping options are expensive or slow. The result? In 2017, ~70% of online shopping carts were abandoned during the checkout process, with unexpected shipping costs serving as the primary abandonment factor. The takeaway? While promoting your brand and driving website traffic is crucial to e-commerce success, the simplification of your online check-out process and efficiency of your order fulfillment workflows are what will ultimately drive customers to complete a purchase and revisit your site for future purchases.

5 Tips for Streamlining Your E-Commerce Checkout & Fulfillment

For businesses looking to move beyond front-end e-commerce marketing and sales functions to focus on the bigger picture, consider the following checkout and order fulfillment tips. In the long run, incorporating these fulfillment strategies into your broader e-commerce game plan will allow you to win at every point of interaction with customers.

5 tips for organizations to streamline their e-commerce order fulfillment process

  • Determine Whether In-House or Outsourced Order Fulfillment Makes More Sense. If your business is only dealing with a few dozen new orders per week, it’s probably easy and affordable to manage fulfillment in-house, as the burden of packing and shipping this volume of orders is not strenuous. But if you are dealing with overly bulky or heavy inventory (such as beach umbrellas, construction equipment, or machinery) or you’ve reached the point where hundreds of new orders are captured from across the country every day, you’ll either have to drastically expand your in-house distribution network or outsource the fulfillment process to specialists. Today, there are a large number of outsourced fulfillment options, including traditional 3pls, e-commerce platforms like Amazon and Shopify, and on-demand warehousing and fulfillment solutions like Ware2Go .
  • Analyze Customer Demand to Determine How Much Inventory You Should Keep. There are two reasons why demand planning is important. For one, stock outages and backorders can significantly impede your order fulfillment speeds and negatively impact customer satisfaction. So, always making sure you have enough inventory on hand to fulfill new orders is key to keeping your customers happy. However, keeping too much inventory on hand can be expensive and result in unnecessary storage costs. The objective is to identify the middle ground where you are keeping enough inventory to safely fulfill new orders, but not so much that your storage costs are a burden. In order to accomplish this, you should be keeping a detailed log of sales activity, including the date of purchase, type and volume of product, and location of the customer. Ultimately, the more you know about your sales volumes and how they shift by customer, product type, location, and season, the better you become at optimizing your inventory.
  • Let Customers Unlock Free Shipping After Crossing a Spend Threshold. How can you affordably offer faster or cheaper shipping to customers? One option is to set a price floor that consumers must pass in order to access such services. For example, run promotions where spending more than $50 online or purchasing more than 3 items at a time will result in free shipping or 2-day shipping. This allows you to ensure that the customers receiving faster shipping are qualified spenders. Examples of this are Walmart’s next-day free shipping service that requires a check-out cost of at least $35 to qualify. In a 2018 e-commerce survey, 76% of Millennials would add more items to their basket in order to qualify for free shipping. And in a 2019 UPS study, 82% of 17-24 year-olds were open to paying extra for accelerated delivery options.
  • Don’t Bog Down Your Checkout Process with Unnecessary Steps. This tip is pretty straightforward: as part of the checkout process, don’t require customers to fill out any unnecessary forms before they’ve made a purchase. The longer you drag out the checkout process, the more likely your customers are to abandon their purchase. After the checkout process is complete, you can then request that they sign up for email alerts, newsletters, referral programs, and all other manner of promotions. Just don’t let these campaigns interfere with your customers’ purchase decision. Remember, 70% of today’s online shopping carts ultimately get abandoned before the purchase is complete, and this is one of the primary reasons why.
  • Provide Delivery Status Updates to Customers. In today’s digital world, consumers are used to having visibility over their online activity. Whether it’s to track the location of their friends via social media or to track the location of their in-transit packages, the widespread availability and use of this type of functionality is having a major impact on how order fulfillment is executed. According to UPS’s 2019 Pulse of the Online Shopper, 56% of e-commerce customers track the status of deliveries to determine where their package is at in the transit process, and what the ETA is. This enables them to ensure the package won’t be left on their doorstep for hours (or days) on end, and allows them to plan for delays if they recognize a package won’t be delivered in time to fulfill its intended purpose (i.e. in time for a birthday or holiday). These types of updates add an additional layer of trust and transparency for your customers and foster greater appreciation for your overall service structure. Today, shipping providers like UPS and even plug-in apps on Shopify offer these types of tracking features at little cost.

Final Thoughts & Next Steps

As companies look to deploy e-commerce strategies, it is vital that they consider ALL the steps to successfully establishing their online presence. This requires looking beyond the front-end sales and marketing functions and spending an equal amount of time and energy on optimizing the check-out and order fulfillment processes. Remember, while effective sales and marketing efforts will drive customers to your site, a simple and efficient checkout and fulfillment process is what ultimately results in customers completing a purchase and revisiting your site for future purchases.

As you evaluate the best-fit fulfillment option for your business, we would encourage you to consider Ware2Go and the broader on-demand warehousing and fulfillment industry. Over the past 3-5 years, the on-demand fulfillment landscape has blossomed as a growing number of businesses recognize the time and cost-savings opportunities, as well as the benefits associated with having a 1-2-day delivery footprint for all their customers nationwide. For more information about the services offered by Ware2Go, browse our FAQs page or contact a representative!

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