Global Ecommerce and International Expansion | Pitney Bowes

How to optimize fulfillment for omnichannel ecommerce

By John Kruzan, Senior Director Shipping Solutions, Pitney Bowes

What’s the most important quality of an effective omnichannel ecommerce experience? Your products.

Customers will buy from you on any channel, unless they can’t find what they’re looking for, or have a hard time with shipping. So, if your mobile app offers a limited product catalog, or if it takes way too long for an order to reach their doorstep, you’ve created friction points that are likely to frustrate your customer.

Fulfillment is a core part of the shopping experience, meaning you can’t afford to ignore what happens behind the scenes. As I discussed in a recent webinar alongside analyst Chris Cunnane of ARC Advisory Group, the best omnichannel fulfillment and shipping networks need to be cost-efficient, offer full visibility of product inventory and status and allow you to ship products from anywhere to everywhere.

If you have these qualities, you’re in the best position possible to exceed customer expectations across different channels. If that doesn’t describe you, here’s what you should consider to engineer an optimized fulfillment and shipping system.

How do you fulfill ecommerce orders?

Online shoppers expect product transparency, easy ordering and speedy delivery. Your ability to meet those expectations often depends on your choice of fulfillment center.

An ARC Advisory Group survey of retailers found that only 32 percent said they have a dedicated distribution center for ecommerce. The majority (77 percent) said they fulfill online orders in the same distribution center that they use for brick-and-mortar orders.

Concerningly, 44 percent of survey respondents said they fulfill online orders straight from their actual stores, which is the option that offers the least visibility into product availability and the least efficiency in product picking. These retailers could be holding back their entire online operation because of an inefficient fulfillment option.

Are you able to handle cross-border shipping?

Our annual online shopping study found that 66 percent of global online shoppers have bought something from a foreign retailer in the past year. Do you have an efficient carrier network that can get your products into an international market as fast and affordably as possible?

That means optimizing all the way down to the last mile, the most expensive part of the delivery process. The ARC study found that 88 percent of retailer respondents still use traditional couriers in the last mile, and that option might not always be the most cost-effective or fastest for your international deliveries.

Of course, creating a flexible mix of international couriers and service providers will also help you tackle import/export regulations and duties and taxes, which are some of the most complex aspects of cross-border shipping.

Can you offer real-time product visibility?

Transparent end-to-end inventory is another important factor for omnichannel ecommerce. It allows you to communicate delivery expectations to your customers, which is a crucial capability in online shopping today.

The ARC survey found that 75 percent of retailers have full visibility of outbound shipments from their warehouse to the customer, which is a good start. However, inbound shipping is actually a major blind spot for retailers – only 35 percent say they have visibility over shipments from their supplier to their store.

Clearly, there are gaps that need to be addressed. Since products are naturally at the center of any retail strategy, online retailers need to work toward achieving an end-to-end view of shipping status from the minute a product leaves their supplier, all the way to the customer’s door.

So, if omnichannel is what you’re working toward, keep in mind that it involves much more than the front-end apps, websites and payment portals that customers use to shop on any device. Your back office, from fulfillment to delivery, needs to be fast, efficient and affordable to keep online customers satisfied. 

Learn more about the habits and purchasing expectations of global online shoppers with our 2016 Pitney Bowes Global Online Shopping Study

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