Fulfilment is the act of getting a product to a customer. In the era of Amazon, technology is helping to reshape logistics for all e-commerce companies.
Do you value speed when ordering online? Or do you prefer to wait and get lower shipping costs? This is a choice made by many of us regularly, and though it seems simple and a given, it can be an issue for e-commerce brands. Luckily, technology is helping drive both speed, quality, and choice when it comes to logistics.
The Era of Choice
In the modern era, ecommerce logistics have three distinct goals for the consumer. The first is to provide choice. The second is to provide speed, should that be desired. Lastly, there is communication.
Choice is important, as consumers want to decide how and when their goods will arrive. Are they willing to pay more because they want an item fast? Or do they want to wait a little longer and save some money? Crucially, can the e-commerce company provide them with these options? If not, they may go elsewhere.
Once this is chosen, consumers want to know where their item is. This could be through emails, in-app notifications, or text messages. They want to know when it is dispatched and the estimated arrival.
The Growth of E-commerce and Logistics
In the past, fulfilment followed a very simple path when it came to logistics. A factory would produce the goods, which were then shipped to warehouses. They would then be split into smaller batches and sent to regional distribution centres. Third parties would then be hired to distribute the products when they were ordered.
Modern expectations are that the time moving goods between warehouses and fulfilment is less. In some instances, customers are expecting next-day delivery as a given. Providers must have goods waiting in stock, ready to dispatch immediately when ordered. This can put a huge strain on their inventory, but it has crucially caused huge investment in getting the last mile correct.
This has manifested in almost all the mile tracking for customers. This involves letting them know when an item is dispatched, down to giving them as accurate a delivery time as possible. Lastly, letting them know when the item has been delivered is a given.
What Is 3PL and How Can It Help E-commerce Businesses?
Third-party logistics (3PL) is the concept of outsourcing any delivery and moving service. This can involve procurement, fulfilment, storage, and shipping. It can be done by a single entity that does one section, or a larger company that does everything in one.
In the past, companies had only the shipper and the carrier. Imagine a company making a vacuum cleaner. They design it, have it made, and they would have to get it shipped from the factory to a warehouse by a 3PL company, where a further 3PL company would pick it up and take it to a shop. Today, modern technology lets 3PL providers offer the whole service, from collecting at the factory, storing and inventory, to direct shipping to a customer.
One company pushing the boundaries of possibility in this field is Shipfusion. It is used by major brands like Kettle and Fire, Clevr, and Tushy. They get access to a fully staffed and managed 3PL warehouses that utilise expert inventory management through real-time technology.
By using these companies, you effectively have each part of the supply chain managed for you. This goes from the processing of orders, all the way to shipping and even managing returns. Added to this are some extremely advanced options, like temperature control solutions, lot tracking, and rate finders, to try to reduce your shipping costs.
The Joy of Automation
Automation is becoming a key integration within fulfilment centres. This is seeing artificial intelligence and even robots do the tasks that were previously overseen by humans. The benefit of this is not only speed, but the ability to reduce human error. This will include predictive analysis and real-time data analysis algorithms.
The benefit of this for fulfilment centres is that once investment in these technologies has been integrated, these companies will begin to see their operational costs lower. This will allow companies to better allocate human resources, perhaps in outward-facing roles like the acquisition of leads.
Personalization is another key result. Just like new movies are suggested to viewers on Netflix based on previous experience, so products can be. This is through data analysis and the automation that comes with it.
The Challenges That Face E-Commerce Businesses
E-commerce businesses now face multiple challenges. The first of these is intense market competition. With Amazon at the head of the table, they need to be able to get customers and appeal to them with quick fulfilment and good pricing. In many cases, the only way they can do this is through the use of all-in-3PL services, especially for those targeting niche audiences.
The downside of this is that operational costs are rising, not just for the companies but for these 3Pl providers. This means that an e-commerce business must be willing to continually assess pricing, looking for better offers on the market that are cheaper but just as efficient. Part of this also comes down to managing customer expectations regarding how and when products will be delivered. Luckily, this is something automation can address.
Lastly, there is a need to have robust cybersecurity. With fraud on the increase and data theft commonplace, businesses must protect their and their customers’ information. It is estimated that a data breach will cost a company $4.88 million on average. Companies are now required to have firewalls, SSL certificates, and multi-factor authentication.
Thus, e-commerce logistics are changing. In fact, it seems many are at a point where they can not get much better. While trials are being made regarding automated delivery using bots, they are still no replacement for the age-old ‘man in a van.’ It may be possible that this changes as technology improves, but for now, businesses must grapple with the concept of fulfilment with assistance from emerging technologies.
