All to often, when businesses operate flawlessly, the value/experience for the customer goes unnoticed. Yet June 24th, 2016, John Waldron posted a raving review of his experience with HomeDepot.com via eTail, a refreshing reflection on a positive experience brought on by HomeDepot’s obvious focus on their omni-channel supply chain.
Retailers across the digital and physical spectrum are looking to single fulfillment strategies as a way to maximize inventory efficiency and generate cost savings, though delivery may also hold the key to improving the customer experience.
The overall single fulfillment concept has received a boost to its validity and credibility with the release of a new fulfillment guideline from the GS1 US Omni-channel Ready Merchandise Ecommerce Fulfillment Workgroup, comprised of partners from every step in the supply chain from manufacturers through carriers and retailers.
Customer experience for e-commerce retailers is not the chief focus on the GS1 workgroup recommendations, but the lessons on presentation that can be gleaned from the report may be all the more striking.
E-Commerce Is Stepping Away
Price sensitivity, product availability, and consumer sourcing trends are causing e-commerce retailers to adjust their fulfillment strategies away from past best practices. Brick-and-mortar stores have traditionally benefited from having a supplier prepare the product at the production source itself, especially when demand forecasts are well-known.
E-commerce fulfillment can often be more expensive and too slow with this manufacturing-side preparation. Its success would require orders be placed far enough in advance that the supplier can split e-commerce and retail orders, turning the e-commerce function essentially into warehousing for orders and not supporting dynamic pricing or other conventional tactics.
While it may seem that running e-commerce as a digital storefront for warehousing operations is the same as brick-and-mortar, the GS1 notes that consumers expect a similar experience, and that comes with presentation elements as well.
The digital shopping experience and the unwrapping of a product purchased through e-commerce sources should present as much of the same look and feel as buying a product in person as possible to create an omni-channel experience buyers react to positively.
Packaging Defines the E-Commerce Experience
Product packaging is designed to keep goods from becoming broken, soiled, or wrinkled, at the bare minimum. Standards such as the “shake test” help packaging move a step further by ensuring that goods stay correctly placed within a package as they traverse the supply chain. However, packaging can be more than that.
It’s also vital that the pick and pack processes are performed accurately in the first place. A recent PCData report estimates that mispicks in 2016 will cost individual warehouses over $500,000 each, but the cost to the e-commerce clients of those warehouses is likely much more severe.
The GS1 lays out a variety of packaging techniques and options in specific, technical terms that hint at one of the most important e-commerce jobs of packaging: presentation. Customers experience an e-commerce product starting with the box it arrives in; they note the condition, the color, and any branding elements.
Moving through the box, they next experience alternative packaging materials, which can be branded tissues, roll or flat type polyethylene plastic bags, air-filled bubbles or pillows, and tissue paper. The snugger the fit during preparation, the more control the retailer has over the final presentation. And that presentation counts.
A Dotcom Distribution study notes that more than half of consumers will make a repeat e-commerce purchase from a merchant who delivers goods in premium packaging. Nearly 40% go farther and will share a photo of their unboxing experience on social media when the item arrives in a unique package.
Fulfilling Different Expectations
The problem highlighted by the GS1 report is that customers want a similar experience that allows them to order from anywhere, which necessitates a capability of the retailer to fulfill from almost anywhere.
While the report does not solve the concern, it does highlight an attractive option for today’s retailer: treat the warehouse as an additional storefront, and vice versa. The GS1 workgroup provides guidance on what items to ship flat versus on a hangar, barcoding placement requirements to make goods easy to manage, and the materials required to ship to a warehouse or stockroom.
Many sophisticated warehouse management solutions on the market today can be used on very granular levels, such as an in-store deployment. This provides the data to track costs and timing of fulfilling orders by SKU, channel, and even customer segment. Modern system logic also supports differentiation for e-commerce, allowing the retailer to understand trends that may differ across channels.
The warehouse or store stockroom has the potential to serve as a single facility handling multiple channels. The customization of orders for e-commerce, plus their proper packaging, can be facilitated in this one location as well.
For retailers who have a pure e-commerce play, their fulfillment partner can also step into this role by providing warehousing, picking, and branded packaging. The retailer can order in bulk for their own usage, from that same fulfillment partner, when attending shows or doing on-site event distribution, allowing the branded experience to propagate in each setting.
Whether the warehouse in managed by the retailer, operates in a co-location setup, or is controlled by a third-party distribution arm, it has the potential to become a new omni-channel provider for e-commerce retailers looking to craft and maintain a positive customer experience.