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3 Ride-or-die tips for multi-channel fulfillment success

This is a guest post from the Linnworks team.

For decades, the solution for dealing with disruptions in eCommerce operations was pretty straightforward: have various contingency plans that enabled the business to resolve the issue, mitigate the impact, and move on.

Sure, an online retailer may face a unique situation for which there was no official response plan. But even then, there was likely some sort of existing strategy that could be adapted to allow the business to respond in an organized, effective way.

That is, until coronavirus reared its ugly head.

Coronavirus was the disruption to end all disruptions. And while nearly every eCommerce company was suddenly dealing with shipping delays, suspended production, and wild fluctuations in order volume, Amazon FBA sellers had the added bonus of contending with the fact that for almost three weeks, Amazon fulfillment centers wouldn’t accept inbound shipments of items deemed non-essential. FBA sellers had no way to replenish their stock and could only sell the items already at a fulfillment center.

Not only that, as a result of the combination of increased demand and a reduced warehouse workforce, many delivery estimates jumped from a couple days to between three and four weeks. It was essentially the perfect formula for lost sales. And for merchants who relied heavily (if not exclusively) on Amazon for distribution, it sounded like a death knell.

Unfortunately, for some, it was. But for others, it was a wakeup call, a giant flashing neon sign telling them if ever there was a time to diversify their selling and distribution channels, this was it.

This realization wasn’t limited exclusively to FBA sellers, though. Online retailers all over the world were recognizing the consequences of relying too heavily on a single marketplace or distributor. Coronavirus transformed multi-channel selling from a “maybe we’ll pursue that in the future” initiative to a straight-up necessity for any company that wanted to stay in business.

If you’re a retailer that only recently adopted multi-channel selling, you may still be working out the kinks that accompany expanding to other marketplaces and fulfillment options—particularly those related to managing inventory, orders, and product listings.

Fortunately, this means there are plenty of opportunities to optimize your processes as well as refine both your short-term and long-term strategies. So as you navigate the transition to multi-channel selling, keep the following three tips in mind.

Tip #1: Embrace the Power of Data

There may be plenty of industries where relying on assumptions and gut instincts is an acceptable part of the business strategy. eCommerce is not one of them. In eCommerce, data is everything. Data tells you where you’ve been and shows you where you’re headed.

For multi-channel selling in particular, success is impossible without the ability to understand and forecast demand on a granular level. This is because efficient multi-channel fulfillment requires smart inventory management. And smart inventory management relies on a data-driven, customer-centric strategy that ensures the right products are available to the right audience at the right time.

Accomplishing this involves leveraging every data source available. For example, you can get visibility into the shopping patterns and browsing behaviors of your current customers by diving into your customer relationship management software. Your order management software is also a treasure trove of valuable historical data you can use to detect when sales tend to spike and when they slow down as well as product demand by customer segments, such as age, sex, and geographic location.

Social media can provide insight into the opinions, interests, and pain points of potential customers. And sites like Total Retail, Retail Touchpoints, and Multichannel Merchant offer expert analyses of current industry trends and economic factors that can affect consumer purchase decisions.

By utilizing all of this information, you can more easily calculate where to expand your inventory and where to consolidate. From there, your goal is to avoid running into revenue-killing stockouts and/or overbuying items that end up collecting dust in a warehouse.

Tip #2: Be Agile and Flexible

As the saying (usually attributed to Greek philosopher Heraclitus) goes, “The only constant in life is change.” Markets fluctuate. The interests of your target audience evolve. Your competitors deploy new tactics. Global pandemics pop up out of nowhere.

Though it may sound counterintuitive, flexibility and agility are the keys to stability in multi-channel selling and fulfillment—especially when it comes to inventory allocation and shipping.

While it may be tempting to house all of your inventory in a single warehouse, taking this approach means the quality of the post-purchase experience will vary greatly depending on the customer’s distance from the distribution center. Plus, you’ll have to quote shipping speeds based on the longest possible transit time to avoid missing expected delivery dates. And longer shipping times can lead to fewer sales.

A more agile and flexible strategy involves storing inventory in multiple warehouses in various parts of the country (or world). Not only does this cut down on how long it takes to fulfill an order, it also allows you to more efficiently allocate inventory based on the demand in specific locations. Additionally, it helps reduce your shipping costs considerably.

The other piece of the puzzle is shipping carriers. Since every carrier can provide different benefits, it doesn’t make sense to limit your company to a single carrier.

For example, DHL is an expert in international shipping and logistics, and FedEx specializes in fast turnaround options, such as next-day and 2-3 day delivery. UPS has offices in almost every country, which means one company will manage shipping from your distribution center to delivery. You also have plenty of local options for domestic shipping, such as USPS, Royal Mail, Canada Post, and Australia Post.

Having several distribution centers and partnering with multiple carriers enables you to more effectively respond and adapt to the changing retail environment. That being said, it does introduce new variables you’ll need to consider as part of your fulfillment strategy. This is where technologies like multi-channel listing and inventory management solutions come into play.

Tip #3: Invest in the Right Technology

Tracking inventory and managing product listings manually is risky (and not in a “this will make a good story later” kind of way.) There are just entirely too many opportunities for human error, which increase substantially the more channels and fulfillment centers you add.

But with inventory management software, you can be confident the information is accurate, up-to-date, and consistent. Since the solution integrates with your selling channels and order management software, product availability is updated in real time both in the interface and across marketplaces, helping you reduce the risk of overselling and stockouts.

Inventory management software also allows you to see the stock levels of each item by fulfillment source and transfer merchandise between locations based on demand so that orders can be fulfilled as quickly as possible. And since there is no way for customers to purchase out-of-stock items, warehouse personnel won’t waste time on an order that can’t actually be fulfilled.

Along with inventory management software, multi-channel listing software is an absolute necessity for multi-channel retailers.

Rather than having to login to each individual channel’s portal every time you want to create a new listing or update an existing one, multi-channel listing software allows you to make bulk updates via a single platform. It automates the repetitive tasks that suck up countless hours and helps make your fulfillment process more efficient.

Together, inventory management software and multi-channel listing software provide the two essential elements multi-channel eCommerce companies need: visibility and synchronization.

Adopting multi-channel selling may not have been high on your list of priorities for 2020 (or on your list at all, for that matter.) But as long as you leverage the right technology to improve the most impactful processes, you’ll be able to reap the benefits of multi-channel selling without adding unnecessary stress.

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