Logistics Technology: The Unsung Hero of Convenience Commerce
E-commerce, Descartes, jpanzer@
descartes.com, 800-419-8495
As consumers embraced online ordering during the pandemic, e-commerce sales ballooned from $571.2 billion in 2019 to $815.4 billion in 2020—a 43% jump—according to a recent Census Bureau retail survey. Although online sales have cooled since the initial pandemic-driven fervor, consumers continue to drive convenience commerce, with e-commerce sales increasing 6.7% in Q1 2022. More than 20% of consumer spending from January to March occurred online.
How does the rise of the convenience economy impact retailers’ ability to create a positive customer experience that drives repeat business and continued revenue growth?
With today’s customers expecting on-time and cost-efficient delivery, shipping transparency and choice, and responsive communication across the order lifecycle, successful retailers recognize that customer satisfaction and top- and bottom-line growth hinge on a high-performance logistics workflow.
As they grapple with ongoing supply chain disruptions, staff shortages, and rising transportation costs, e-commerce merchants must optimize fulfillment operations to keep pace with sales growth and meet delivery promises to consumers.
One solution lies in the combined power of warehouse management systems (WMS) and advanced shipping technology specialized for the e-commerce industry to seamlessly execute fulfillment.
An under-performing warehouse has a crippling effect on fulfillment performance, especially during order volume spikes—whether from traditional peak seasons, social media-driven sales activity, or unforeseen events such as shifting consumer shopping habits during the pandemic.
By adopting an integrated WMS and shipping solution, e-commerce retailers can scale and execute fulfillment seamlessly from receipt of the order to point of delivery (POD). Automated logistics workflows improve warehouse accuracy and efficiency, reduce order lead time, and minimize shipping costs. Plus, retailers gain full visibility into warehouse operations and last-mile delivery.
Keeping Pace With Surging Demand
Forward-thinking retailers take advantage of combined WMS and e-commerce shipping solutions to keep pace with increasing consumer demand and grow shipping volume. By creating a scalable, efficient fulfillment workflow, they are able to increase warehouse productivity through, for example, multi-order picking strategies.
They also can cost-effectively ship the right items with help from rate shopping capabilities, avoid overselling existing inventory, and deliver shipments on time—entirely independent of order volume spikes or dips.
Unfortunately, heightened consumer demand and mounting sales are mirrored by increased product returns that can catch retailers off guard. Market leaders are turning to technology, such as returns portals or preprinted return labels, that can support reverse logistics practices to optimize the returns process on both the operational and customer experience fronts.
The goal is to spend less time sorting returns and quickly get returned inventory back into circulation, while creating a convenient, personalized returns experience for the customer.
Companies also can leverage the information they receive from customers on their “reasons for returns” to ensure product descriptions are as up to date as possible, which helps reduce the volume of returned goods.
Final-mile delivery is the linchpin of a successful logistics operation and a convenient customer experience. Yet e-commerce retailers often fall short on home delivery performance, with three out of four consumers reporting a negative delivery experience in the past three months, according to Descartes’s 2022 E-commerce Home Delivery Consumer Sentiment Report.
Streamlining the Workflow
To consistently meet their delivery promise to consumers, e-commerce retailers must accelerate and streamline warehouse and delivery workflows—from receiving orders, prioritizing them in the warehouse to be picked, packed, and shipped, and delivering the product to the customer. They also must ensure transparent and proactive communication across the entire order lifecycle.
Keeping consumers informed of order status until POD is a key factor in meeting the delivery promise and creating a convenient customer experience.
Offering Choice and Transparency
Consumers also want choice and transparency for delivery options. With help from technology, retailers can offer customers the ability to choose their ideal delivery option—the fastest, least expensive, nearest drop-off point, or most environmentally friendly—in real time during the checkout process.
Fulfillment excellence requires warehouse, shipping, and delivery operations to work in unison. As retailers find new ways to capitalize on the convenience economy, having a technology foundation that’s specialized for e-commerce needs will be a critical factor in helping them drive growth, profits, and customer satisfaction.