Throughout the past year, consumer trends have indicated that the accelerated adoption of e-commerce is here to stay. For many brands, 2020 was a year of unprecedented growth online, from lockdowns forcing traditionally brick-and-mortar businesses online to companies bringing forward plans to launch established products on e-commerce platforms to capitalise on demand. However, even the largest of sellers have been affected by stock issues or struggled to manage the flurry of activity arising from demand surges. Delivery delays, ongoing as businesses adjust to new measures following the Brexit transition period, are also adding to the list of challenges businesses need to overcome to continue benefiting from the digital era of commerce.
As a marketplace seller, maintaining stock levels is hugely important, with even one day of being out of stock having an impact on sales beyond the time it takes for the product to be restocked. Now more than ever, placing fulfilment at the centre of your e-commerce strategy is essential. With limitless options for customers across marketplaces such as Amazon, brands looking to expand into e-commerce should not undervalue time spent planning fulfilment strategy regardless of starting point. So, what does making fulfilment a priority within e-commerce strategy look like?
Consider your quantity and location carefully
For sellers looking to Amazon, there are three fulfilment types that enable you to provide your service: Fulfilment by Merchant, Fulfilment by Amazon, and Seller Fulfilled Prime. Understanding warehousing options, geography and local preferences are not one off processes and sellers should analyse the efficiency of the fulfilment process throughout the year.
To protect your fulfilment process from current stock issues, consider staggering deliveries by using stock split across warehouses in different territories in which you are trading. This results in the need to register in multiple countries and has accounting implications but may prevent delivery delays for UK businesses selling to EU customers.
Dependent on your fulfilment method, you may be required to arrange courier services. Firstly, take time to become familiar with your customer bases: where are your customers located? What local courier providers are popular in the local area and able to handle anticipated demand?
Consider alternatives
Frequently check on the status of your existing and anticipated suppliers to analyse whether alternative solutions are needed. As we enter the new year, new financial data will be available in the form of financial statements, for some businesses for the first time since the pandemic, and sellers should take note of any going concern or operational issues faced by suppliers currently. Before, simplifying the fulfilment chain as much as possible and limiting the number of connections may have been ideal for brands whose e-commerce income was deemed supplementary to in-store sales. However, we recommend seeking opportunities to trial or discuss alternatives to your fulfilment methods in the wake of delivery delays and continued demand.
Consider the option of shared warehousing or third-party storage solutions: whilst this may not be useful for all products and can limit your control, shared warehouses can offer access to space in key areas during a time where fulfilment solutions are in high demand.
Consider your technology
Warehouses have an essential role to play for sellers, not just for storage but for gathering data and streamlining processes. Ensure your warehouses have sufficient, appropriate technology to support online demand: systems should ideally interface centrally with other reporting or data management software. By opting for systems that have compatible communication, businesses can benefit from automation in key areas such as stock management, where knowledge of the business, historic data and actual stock data can determine automatic stock replenishment. Stock levels should be maintained to avoid adverse impacts on sales, and as such software can provide a level of comfort.
Implementation of new software does also not need to be an overhaul for a fulfilment system: stepped integration, for example gradual increase of permissions and capabilities for staff aligning to training, can gradually take away manual day-to-day activities and allow key members of teams to focus on the exciting part of fulfilment: getting the most out of your data.
Consider your mindset
Whilst one fulfilment option may have always been the best choice before, current levels of demand may be extraordinary for your business. Amazon have experienced high demand too, therefore consider whether there are opportunities to transition to a different fulfilment approach. For sellers with experience managing a brand over several years, it is often difficult to find the right time to overhaul warehousing: why change something that isn’t broken? Switching may seem daunting, but agencies can provide guidance for how this looks operationally and assist with the process.
Changes do also not need to be drastic. Identify elements of your product range or ways to segment your stock and analyse what fulfilment options each has; for example, splitting large, bulky items from fast-moving, small goods. Whilst adjusting may cause short-term headaches, keeping fulfilment at the centre of e-commerce strategy should safeguard against the need for more costly, disruptive restructuring further down the line.
Consider your customers’ expectations
Understand what is important to your customer. Differentiating against the competition on platforms such as Amazon can be notoriously difficult, so gather data to support the most appealing competitors’ approach to delivery and consider setting aggressive delivery promotions with your researched customers in mind, for example next-day or free delivery. Promotions can even be regional, honing on local preferences. At the very least, customers expect clear information regarding fulfilment policy and upfront guidance on delivery times. As we enter the new year it is important to update business processes and ensure policies are in line with actual operations now.
Stock
Sellers should be mindful many other businesses, particularly those selling into the EU, may be seeking alternative warehousing and courier provider solutions too. It is recommended to revisit any previous assumptions regarding inventory and fulfilment to ensure that stock levels are safeguarded as much as possible. Also consider whether warehousing software requires any temporary manual intervention or additional support during this unpredictable time, considering the influential impact of regional lockdowns.
Conclusion
For many, 2020 provided a new way of working for brands. Launching existing brands across platforms such as Amazon or eBay has created demands for departments to work with each other in new ways; ensure fulfilment is part of the conversation, by making it part of the conversation. From involvement of warehousing staff to develop capabilities of software, to involvement of Sales for designing promotional offers, to liaising with Business Development to make new partnerships for warehousing solutions, connect the different elements of your business. Maybe, it just may spark some creative solutions. For some established brands, multichannel e-commerce was previously seen as a booster to high street sales and useful for building brand recognition online, however 2020 has proven that e-commerce has huge benefits.
Stuart Conroy has run Activ8 for 20 years and has operated across multiple channels in Asia, Europe and North America. With an understanding of the latest technology, logistics and outsourcing opportunities, Activ8 provides strategy consulting and hands-on solutions to brands looking to manage risk and scale opportunity in online commerce.
Activ8 utilise their experience of being on the Fast Track 100 on two occasions to help brands navigate the scaling process and operate a risk-averse multichannel strategy.
Having worked in investment banking before starting an ecommerce business as well as creating and working with a number of start-ups, Stuart has a great understanding of the challenges facing businesses of all sizes in the modern, digitally-influenced arenas.
