Good Question: What’s your best tip for retailers pivoting to direct-to-consumer (DTC) fulfillment?
Successful DTC fulfillment comes down to balancing customer acquisition cost, conversion rate, and average order value (AOV). AOV is critical—if it’s too low, shipping costs will eat up your margins. Keep AOV up by bundling products and using shipping partners who offer flexible fulfillment options that scale with you.
SVP of Strategic Partners
Know your audience and tailor your marketing to highlight them. Everyone is offering e-commerce; make sure you stand out to your target audience. Know your competition. Research their sites and what ease-of-use features they have (or lack) that you can offer to appeal even more to your audience.
Supply Chain Specialist
Natural Fiber Welding
Ensure the last-mile customer experience is exceptional. With the right technology, tools, and people, retailers can elevate the way they execute their delivery strategy by improving order visibility, communication, and inventory management.
DTC fulfillment CAN provide more control over the products, and even packaging, that a retailer delivers, which is important amid heightened consumer demands. However, innovation requires accurate data—at the DNA level. By managing data proactively, companies can adjust to market conditions quickly.
Founder and CEO
Provide a reliable and consistent fulfillment experience that is on-par or better than their product/brand experience, while also managing a more challenging cost structure in parallel. Companies that neglect fulfillment experience do so at their own risk.
Operations Transformation Practice Leader
Don’t skimp on resources to develop online capabilities and customer data acquisition. Social media presence targets the right customers while a robust order management system affects accurate processing, fulfillment, and shipping. Understanding consumption patterns informs product portfolio, and inventory and returns management.
Assistant Professor, Supply Chain Management
Michigan State University
Understand the landscape of the goods you’re shipping. The regulations, packaging and labeling requirements, and transportation mode can vary depending on where and how goods are shipped and the quantity.
Director, Global Learning
Establish a proper fulfillment process. Some questions to ask: Is your pick area set up to handle each pick vs. case pick? Is there a pack area for single unit orders vs. multi-unit orders? Ensure you have the right cycle counting cadence, so your pick slots meet your inventory accuracy levels, and your SKU availability is consistently available for your end users.
SVP and General Manager
Empower your company with data from suppliers—and have an automated system and the processes in place to act on it. This gives retailers real-time visibility into their supply chain so they can make informed decisions, reduce unnecessary costs, and streamline inventory management.
Enhance synchronization and coordination with logistics providers, especially third-party logistics providers. Understand each and every custody exchange as products travel to consumers, as well as ensure all parties involved are aware of the environmental conditions surrounding them during the delivery and exchange process.
Global Director of Supply Chain Solutions
Adopt and optimize the right software to help automate DTC warehouse processes along with connected hardware such as barcode label printers. These solutions help direct-to-consumer fleets gain competitive differentiation, speed, and superior customer service.
Senior Manager, Route & Transportation
Brother Mobile Solutions
Speed to customer is critical for DTC fulfillment to help differentiate the product. Forming strategic partnerships for fulfillment (often placing inventory closer to the end consumer) is key for customer satisfaction. Additionally, brands should implement a returns process that incorporates automation to prioritize efficiency and cost savings.
VP of Market Line Operations
GEODIS in Americas
Get a solid grasp of your supply chain network design and how you can leverage existing components of your fulfillment network. Do not operate your direct-to-consumer business in a silo.
Industry & Solutions Marketing Director
Partner with 3PLs that have strong middle- and last-mile capabilities. They have the technology to allow retailers to manage inbound and existing inventory placement, as well as forecast inventory needs. Technology to manage the last mile helps extend the retailer’s brand to the consumer’s front door.
SVP, Corporate Strategy & Consulting
The last mile can be the most challenging for direct-to-consumer e-commerce. To support omni-channel sales, you also need omni-channel logistics, and the quickest way to ramp up is to network and collaborate with third-party logistics (3PL) services.
SVP & Chief Marketing & Solutions Officer
SAP Business Network
The current pace of change requires short-term needs to be addressed first, but we encourage retailers to keep an eye on how their needs may change in the future and consider solutions that can evolve with their business.
Senior Product Manager
To successfully pivot to direct-to-consumer fulfillment, retailers should use tools like location intelligence to increase their visibility, as well as the consumer’s visibility, into how their goods are being moved along and when the end customer can expect them. This will ultimately lead to increased customer satisfaction and brand loyalty.
Founder and CEO
Stay focused on what your core business is—making great products. While you may need to embrace direct-to-consumer sales, it doesn’t mean you need to ship the products yourself. There are logistics outsourcing and 3PL companies that are experts in shipping and delivering products to consumers that can handle that aspect of your business for you. The alternative is a long, expensive process of building out those capabilities in-house—and frankly, most small and mid-sized businesses just don’t have the time or resources to successfully undertake such a process. Work with experts and stay focused on what you do best.
Co-founder and CEO
The #1 tip to support a pivot to DTC is to focus on flexible automation. Building a fulfillment process that utilizes new technologies like AMRs will make you better prepared for unforeseen challenges. Being proactive rather than retroactive will allow you to weather whatever storm comes next.
The best tip I can offer for companies focusing on DTC is to focus on the holistic customer experience. From ordering to rapid and reliable fulfillment services, to the return and exchange process. Consumers today expect all these processes to be seamless and this is only possible through full supply chain visibility, advanced fulfillment automation, and robust reverse logistics.
Director of Sales, North America
The United States will have 300 million online shoppers by 2023, over 90% of the current population. With so much shopping taking place online, and 53% of total shipping costs tied up in the final leg to the customer, fast and efficient delivery is essential to keeping operations lean and competitive.
Chief Commercial Officer
Brands should leverage micro-fulfillment centers, especially in densely populated areas, to ensure they are close to where their consumers are located. This approach makes for speedier deliveries and happier customers. Brands should also explore regional carrier partners to assist with their delivery needs, not just national carriers.
Founder and CEO
E-commerce fulfillment options like same-day delivery and curbside pickup are table stakes. The next frontier is taking complete control of the entire fulfillment lifecycle: merchandising, demand planning, distribution, shipping, and reverse logistics. Retailers can assemble this view necessary to orchestrate seamless customer experiences with specialized low code/no code Cloud software that accelerate and automate analytics based on enterprise data and beyond, including third-party partners.
Solutions Marketing Director
Recalibrate your processes and systems. The biggest failures we see are when companies simply layer-on a DTC fulfillment strategy (whether through stores, DCs, or web-based point-of-sale system) to their current fulfillment. Most retailers have spent a lot of time and resources finely tuning their fulfillment but the change to direct customer fulfillment unbalances these systems, leaving angry customers, inventory overages, and shortages.
VP Pricing Solutions
antuit.ai, a Zebra Technologies company
Appreciate that DTC is quite different from store fulfillment. From receiving to shipping, there are material differences in process, timelines, and costs. Order placement timing, product included in an order, and speed of delivery are all decided by the customer—requiring flexible fulfillment operations with options to match the customer timing.
EVP and COO
Moving to a DTC business model is a great opportunity to experiment and provide a personalized customer experience to boost customer loyalty. Make sure to have the right logistics and technology in place when implementing this model to distribute to many individual customers and to constantly ensure customer expectations are being met.
Make a customer feel a connection to your brand even without a salesperson creating that experience. Consider personal notes, customized discounts, simple return policies, etc. Competitive advantage will go to the organizations that prioritize human connection in DTC.
Director of Brokerage Operations-Indianapolis
Consumers expect personalized shipping experiences—like same-day delivery and having a sustainable option. Retailers must have a flexible supply chain involving multiple transit modes, inventory locations, and a technology solution to orchestrate in order to deliver on customers’ expectations.
Ware2Go, a UPS Company
Have a great answer to a good question?
Be sure to participate next month. We want to know:
What phrase or buzzword (think shrinkflation) would you create to describe a supply chain trend or development? How would you define it?
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