Contents

The Problem with Last-mile Fulfillment 
Two-day Shipping: Why it’s Important 
Central Hub for Full Visibility 
Inventory Management: Avoid Overselling & Stockouts 
Automate Order Management 
Monitor Performance 

Black Friday and Cyber Monday are fast approaching and it seems like each year these dates get earlier and earlier. How is that even possible? Last year Amazon kicked off its Cyber Monday deals a full week early. Brands are now starting sales earlier in anticipation of Cyber Monday which in many cases has been rebranded to be Cyber Week.

In many instances, it seems like retail sensory overload, but a successful holiday campaign can make or break a company. Nothing predicts failure as much as not being prepared for a holiday influx of orders and returns.

The Problem with Last-Mile Fulfillment

As a D2C brand, you should recognize how essential it is to improve your speed with last-mile fulfillment not only to reduce shipping costs but to also deliver a positive customer experience. Having a game plan for last-mile delivery is even more important during the holiday shopping season when it’s vital for customers to receive their orders on time. If an order arrives later than promised, this can cause your customers to lose trust in your brand. You should also consider that late arrivals could cause an increase in returns. As a result, it will add to shipping costs if you offer free shipping and returns, a loss in revenue, and potentially a loss of a customer.

Brands need to also keep in mind when providing shipping options to their customers what each of their carrier’s holiday shipping deadlines is so that the estimated delivery time is clear to the customer before the order is placed and can be fulfilled on time.

2022 US CARRIER HOLIDAY SCHEDULE

Of course, none of this is guaranteed. It’s best to make sure you have enough days to ship that will account for bad weather, incorrect addresses, or other issues that are out of your control. 

The Four Key Considerations to Prepare for Holiday Fulfillment

• Reduce the distance 

  • Leverage multiple fulfillment centers, whether it be many 3PLs, brand-owned warehouses, retail locations, or a combination of these various fulfillment centers. This will give your brand the ability to fulfill orders closer to where your customer is located, meaning faster and more economical shipping options, lowering last-mile costs, and most importantly, keeping customers happy by offering a satisfactory fulfillment service.
    

• Utilize a variety of carriers

  • Take advantage of having a variety of carriers. This will allow your brand to take advantage of rate shopping to reduce shipping costs and to have many to utilize to ensure you can speed up the delivery time.

• Leverage technology

  • Choosing the right technology as part of your last-mile fulfillment strategy will help a D2C brand develop a scalable shipping model. Look for a unified platform that will give you the flexibility to create a fulfillment network adding as many fulfillment locations as needed. The right platform should give you full control and visibility into all fulfillment activities across all your fulfillment locations. It will help reduce last-mile costs with smart technology that can send the order to the fulfillment center that has the item in stock and is closest to the customer. Utilizing a fulfillment network allows you to own your fulfillment operations model from end to end with visibility into all your fulfillment locations and the ability to control your own business rules and shipping logic, all within one unified platform.
    

• Plan for returns and reverse logistics

  • Brands must also consider how to manage returns and reverse logistics when developing an effective last-mile fulfillment strategy as this impacts how the customer perceives your brand and can be the make or break of whether to buy from your brand again. Historically, returns tend to be high during the holiday season. National Returns Day is on January 2. This volume of reverse logistics can strain both fulfillment services and retailers, which can delay the processing and refund of the goods. This year, UPS forecasts a shift from a single National Returns Day into National Returns Week – which will have repercussions for all involved. UPS reported 1.5 million returned packages were shipped back to retailers on December 19, 2018, making it the biggest returns day of the year and what UPS declares as the “National Returns Day.”  The second spike of returns from holiday shopping occurred on January 3, 2019, when UPS reported 1.3 million packages were shipped back to retailers.  With these numbers, not having a proper plan for handling returns can make inventory management painful and messy. 

Number of packages returned in the United States on National Returns Day from 2016 to 2019 (in millions)*

Data Source from Statista

Two-day Shipping: Why it’s Important

In today’s landscape, brands are no longer competing on price alone or by having the best product, they are competing for customers based on that customer's experience. 

Customers now expect quick delivery for their online purchases. In fact, 53% of shoppers claim that the speed of delivery is an important factor for them when choosing to make an online purchase and according to NRF 39% expect two-day shipping to be free. 

It seems that many online brands are falling short of their customer expectations as a majority of shoppers still choose to buy at online marketplaces such as Amazon or Walmart due to free or heavily discounted shipping. 

Amazon has set this expectation for 2-day and even 1-day delivery making it a challenge for D2C brands to compete. With the holiday season fast approaching, the pressure is on D2C brands to provide faster shipping options so that last-minute holiday shoppers can get their orders delivered just in time for the holidays. Don’t let Amazon take away your potential sales this holiday season.

Central Hub for Full Visibility 

For any brand, not having full visibility into its fulfillment operations can cause many problems and headaches. Having to switch between multiple platforms, spreadsheets and emails can also get messy and time-consuming. You should consider a unified fulfillment management system as your central hub for the source of truth to your inventory and fulfillment data. 

It’s important to have a central hub to view all your fulfillment activities as this allows you to have a full view of all your inventory across multiple channels, fulfillment locations, and any retail locations.  A central hub will allow you to gain complete visibility into your eCommerce operations with analytics to measure all of your fulfillment KPIs. 

You should look for a fulfillment management system that offers a single order view so you can quickly locate an individual order, see all the activity history on the order, and if there are any issues associated with the order that could cause any delays with fulfillment.  Your customer support or operations teams should have the ability to catch the issues early on to address them in a timely manner.  This will reduce the risk of delaying fulfillment keeping your customer delighted

Inventory Management: Avoid Overselling & Stockouts

One of the biggest challenges online sellers face is managing their inventory. Especially during the holiday season when it’s not only busy but can often be unpredictable in which case can really make your inventory messy. That’s when having an inventory management system is important to keep things organized.

Inventory management is the lifeblood of an eCommerce business so keeping your inventory in sync across all your fulfillment locations and your store is essential. Accuracy in managing your inventory in real-time helps avoid overselling and stockouts. The last thing you would want to tell a customer after they had already placed an order is that an item they purchased is no longer available. That would cause a bit of frustration with the customer, especially during their holiday shopping when stress is high seeking out the perfect gift. One that they expected to arrive on time.

As a D2C brand, if you don’t already have one, you should greatly consider using an inventory management system that can sync all your orders, fulfillments and returns with your 3PLs, warehouses, online stores, and retail locations so that your fulfillment points have accurate and timely order data to fulfill as fast as possible. Having an inventory management system in place will not only help with accuracy but it will provide you with data to predict how much inventory you’ll need on hand for next year’s holiday season.

• Accuracy with real-time inventory to avoid overselling and stockouts
• Syncs orders, fulfillments, and returns with warehouses
• Warehouses will have accurate and timely order data to fulfill faster
• Leverage data for next year to plan how much inventory you’ll need

How Much Consumers are Spending

Revenue Dollars 2017 vs 2018
Nov 1 - Dec 31, 2018

Data Source from Adobe Analytics

When Consumers are Spending

Revenue by Key Date: Cyber Monday

Data Source from Adobe Analytics

Automate Order Management 

Order Management can be one of the most complex parts of your operations but it doesn’t have to be. There is so much involved and the more fulfillment locations you have, the more complicated order management could become. Leveraging the right technology can make this part of your operations much easier. You should choose a platform that has the flexibility and visibility you need to stay on top of all your order activities. An order management system will automate time-consuming processes allowing you to eliminate the need to import all orders from spreadsheets and eliminate manual data entry errors.

The right order management system will save you time by aggregating all of your orders into one unified platform. You’ll be able to automatically import orders from all commerce channels and update shipping and tracking information back to the channels in which the orders were placed. This helps reduce time spent manually updating tracking and shipping updates. It will prevent overselling by having the most up-to-date order information from channels from synchronizing orders with inventory.
Two features you should look for when choosing an order management system are the visibility of order status and the ability to tag orders.

Order Status is important information for your customer service team. Make sure the order management system you choose will have visibility to order status to see where orders are in the pipeline so that your customer service team can better help your customers

Order Tagging can also be done through the right order management system. This will allow you to automate your workflow by tagging specific orders to follow custom flows. You can tag orders for routing, bypassing high fraud checks, or reporting. Auto-tagging orders to follow specific workflows will save you time by automating repetitive tasks.

Other features to look for in an order management system are: 

• Rate Shopping & Address Verification

This will decrease shipping costs to increase margins and revenue. It will eliminate shipment returns due to bad addresses, increase customer satisfaction by decreasing transit times, and eliminate time spent manually quoting rates with different carriers.

• Distributed Order Management

An order management system should be able to intelligently distribute orders across various systems and processes utilized by the multiple parties involved in fulfilling an order. Distributed Order Management will fulfill orders quickly from the best, closest location to your customer. This makes your fulfillment operations more efficient by reducing delivery times and utilizing multiple delivery options, thus lowering freight and fulfillment costs.

• Line Item Splitting

Look for the option to set up rules to split orders according to predetermined criteria, usually used with pre/backorders to create multiple virtual orders from a customer’s single order. Line Item Splitting will allow you to split an order by status to route pre-orders, backorders, or in-stock and even have the ability to split orders by vendor or supplier to dropship or route to the correct fulfillment partner.

Monitor Performance 

Monitoring performance is an essential part of your operations and even more so during the peak seasons when your order volume is at its highest. Brands need to leverage data to make decisions quickly. Performance measurement will allow you to cut costs wherever possible, quickly without compromising on quality or services.
If your brand has multiple fulfillment locations, monitoring performance can be a challenge if you’re not using the right technology. Choose a unified platform where you can monitor performance for all of your fulfillment locations within one central hub.

Summary

With Amazon now shipping a majority of their orders in two days or less, and their expansion of next-day and same-day shipping offerings, buyers have become accustomed to these premium services. Your customers will expect the same level of service and a luxury Prime-like experience when ordering from your brand, especially during the busy holiday season.

Now is the time to make sure your technology stack and fulfillment centers are ready to deliver such an experience. While you probably will not need to open 75 fulfillment centers in the USA like Amazon, there are alternatives that will allow you to level the playing field.

With recent advancements in technology, there are a few unified fulfillment platforms that will allow you to take control of your margins, shipping rates, and custom logic, all while allowing for deep visibility into your fulfillment activities. Your brand can easily add new domestic and international fulfillment partners to create your own single customized network of integrated providers.

Now is the time to start planning for your successful holiday season.

About ChannelApe

ChannelApe helps brands improve NPS and customer LTV while reducing costs by creating visibility through best-in-class operational services and technology. We work with high-SKU eCommerce brands to improve inventory and order management, monitor daily operations, resolve issues before they affect your customers, and report on all of it.