Fulfilment operations: the heart of customer experience

Over the last decade or so, the eCommerce business has matured a lot. The battle within the eCommerce space has gotten intense now. Gone are the days when eCommerce just took its nascent baby steps – to now compete on finding robust cutthroat innovative approaches to attract new consumers and keep existing customers satisfied. A dedicated effort is put into making the customer experience as seamless and delightful as possible. User Interface, faster deliveries, quick and satisfactory customer complaints resolution – all these domains now have taken a front seat. It is the world of CX now – Customer experience. Now with Covid 19, eCommerce has accelerated in speed much faster than it was anticipated. And thus, due to the constant lockdowns and restrictions and fear of moving out in public the war in eCommerce is now about how to make the customer experience as delightful as possible. The customer service department's responsibility is just not answering typical (doubt solving) questions of the customers but also ensuring to take the overall experience, including all facets right from ordering to delivering, to the next level. The name of the game is customer satisfaction or customer experience delight or providing top-class customer service.

Like for a physical retail store, at the heart is the store godown/warehouse, similarly, for an eCommerce business ( https://www.yourretailcoach.ae/services/e-commerce-online-stores/ ), it is the fulfilment operations. By fulfillment operations we mean the order fulfillment processes and the Supply chain and logistics management (delivery and return). This is the heart and core of the business. If this core is managed and organized well – it is surely going to lead to a delightful customer experience.

What are order fulfillment processes?

Order fulfilment can broadly be broken into 3 major steps: receiving the physical goods in the warehouse, processing it ( storing and sorting them in a prescribed manner for access), and then finally delivering orders to the end customers. An overview of the steps involved in the order fulfillment process:

-> Receiving the physical inventory goods
-> Inventory storage in a systematic manner
-> Removing the product once the order is received
-> Packing it
-> Shipping to the end customer
-> Returns processing if the customer returns the same

This is the heart of the business operation of the eCommerce operation – and the most expensive leg of the operation. There are various strategies one can use for this portion of the business.

What are some of the order fulfillment strategies?

Order fulfilment is one of the essential components of the broader supply chain process ( https://www.yourretailcoach.ae/fulfilment-centre/ ) in an eCommerce business. There are four main strategies that one can go for (depending upon the category of product, nature of business, and how matured is the eCommerce business for that company):

In-House Order Fulfillment: This is generally used by evolved eCommerce businesses. Here they have their dedicated staff and employees to manage the fulfilment process. The staff will handle all steps of the order fulfillment. Like receiving the physical goods, storing them, picking and packing the order once it is received. As you can see, using your manpower can be an expensive affair, hence this strategy is usually used by established businesses – who would prefer to keep the keeping process under their control. While some very home-based nascent start-ups do this from homes – to minimize cost (orders are also on the lower side in such business scale)

Outsourced Order Fulfillment: This is generally used by a company whose proof of concept is tested and vetted. Now that the business idea ( https://www.yourretailcoach.ae/services/business-plan-development/ ) is accepted by the customer and sizable business is in the foreseeable future, (and difficult to handle orders by oneself), companies use outsourced order fulfillment agencies. Here a “Third Party Logistics” or 3PL companies services are used. They would do all the steps like storing, picking, packaging, delivering to the end customer, and return management. This option is also exercised by companies who want to manage the process by themselves – but do not have adequate space or manpower. When companies use a third-party logistics service, they do not invest in the warehouse infrastructure setup, which is managed by the third-party logistics company. This depending upon the capital at hand also dictates the kind of strategy that is used.

Dropshipping: This is an order fulfillment strategy that exploits strong manufacturer and supplier relations. Here there is no inventory for the eCommerce business seller to manage. The products are listed on the portal. Once an order is received, the seller relays the order to the manufacturer or main supplier – who “dropships” it to the end consumer. While the seller is the front of the order and manages the customer. So, it's like a just-in-time inventory process. The risk and cost of carrying goods are minimized.

Hybrid Fulfillment: A company can opt for a hybrid mechanism of any two or all three of the above-mentioned strategies. For example, some of the products that the companies’ manufacturers themselves – may be controlled and shipped from their own house, some expensive and slow movers may be drop-shipped while for the remaining an outsourcing strategy can be used.

Closely related to the order management process is

-> how the delivery is to be done. The delivery to the end customer is also known as last-mile delivery. Whether you want to allow the customers to come to a centralized pick-up point or deliver it at home.
-> Where should your warehouses be located? Mother warehouse, Central, Regional, or right within the city limits.

Both these are strategic decisions that are based on a lot of factors.

But why is order fulfillment so important?

Today’s consumers are accustomed to fast, accurate, and 100% order fulfilment. The need and demand of concepts like next-day delivery or grocery delivery within 2 hours are becoming a mandate. The time required to deliver an order is now one of the defining criteria of customer services. The type of delivery service clearly today defines how the customer is going to interact with you the next time. Thus depending upon the nature of business, the stage and complexity of the business, and customer demand a hybrid approach of various approaches should be optimized and used. By this, we may get

-> Lower shipping costs
-> Reduction in operational costs
-> Customer delight
-> Build customer base
-> Elevate customer service
-> Focus on building core selling strategies rather than operational

What are the challenges in the order fulfilment process?

As you can see that there are multiple steps in an order fulfillment process. It is complex, challenging and can be expensive. Some of the key challenging factors that one must be cautious about are :

-> Inventory Management: if you are understocked – there are chances you may lose out on orders or can service incomplete orders. Both are strong detractors to a delightful customer experience. If you are overstocked, the cost of goods and storage costs may burden the business profitability. Thus, a fine balance is needed between the same.
-> Demand Planning: Closely related to inventory management is demand planning. Using the correct tools and data for trend analysis, demand forecasting and shaping must be used to arrive at the forecast for the future.
-> Logistics Planning: Speed and Care are the two aspects of logistics planning that must be given due credit.
-> Supply Chain: the entire supply chain – starting from sourcing to the end delivery – needs to be always in check. Even if something breaks, a mitigating strategy should be in place. Owing to the nature of the overall supply chain being so dynamic, it becomes so brittle and challenging.

What are some of the best strategies that one can use today?

While order fulfilment can be challenging, but there are some best practices that one can follow:

-> Approach: No strategy is right or wrong. One man’s poison is another man’s meat. Depending upon the situation and stage of the business that strategy needs to be used and tweaked. AT a particular moment outsourcing may be best but after a point of time – maybe in-house is better. A hybrid approach or use of complete third-party logistics? Choose what will best work for you.
-> Data: Data is the new king. With data, you can get the maximum of your answers. It can help you in identifying the right strategy for order fulfillment. Or can help in understanding demand pockets and trend analysis. Understanding consumer preferences and buying patterns etc. Data should be captured and leveraged heavily.
-> Communication: Communicate with the customer. Share every piece of information about the order process with them. This will make your process transparent and keep the customer updated about the entire process. ( this is different communication that one generally does on a social media platform between the customer and the brand)
-> Automation: As technology and consumer demands both are advancing, automation is surely going to be needed. The Key is not to be intimidated by it and embrace it with open arms.

Handling Returns

The customer satisfaction parameters also include – handling of returns. As eCommerce is growing and looking out for customer delight – the option of returns is something that was implemented – but can become challenging complex. Return order management is the order process management which includes activities associated with returns like reverse logistics (reverse pick up), storing the item back in its location post checks, and issuing the customer the refund for the same. The customer has returned because they have probably not liked something about the product, so it becomes even more crucial to handle the return request more sensitively to make the process easy and smooth for the customer.
With e-commerce disrupting the traditional eCommerce business – retail stores are also coming up with various order fulfilment strategies like

-> Buy Online Pick Up in Store (BOPIS)
-> Buy Online Return in Store (BORIS)
-> Reserve Online, Pick Up in Store (ROPIS)

Innovation is happening in the order fulfilment domain from every aspect to aid and get the customer satisfied.

At times we become so busy with selling, that we completely forget how we are going to manage the order once we receive it. Our focus is so topline-oriented that the other aspects of business are overlooked. Thus, you can see that designing and developing an order fulfilment process ( https://www.yourretailcoach.ae/fulfilment-centre/ ) will require a lot of technical expertise and can be challenging. Hence it is best to use the advice of an expert like Your Retail Coach. Your Retail Coach excels in providing retail consultancy in both offline and online domains of business. Your Retail Coach has expertise in various fields and sectors like Grocery, Fashion, Gifting, Pharmaceuticals, Education, Jewellery, Food, Automobile, Healthcare, Electronics, etc. Your Retail Coach specializes in designing standard operating procedures (SOPs), franchise development, business model & strategy ( https://www.yourretailcoach.ae/services/business-strategy-consulting/ ), omnichannel retail, eCommerce, and market research and business plan. Strategizing and designing an order fulfilment process is like defining a process or a standard operating procedure of workflow, in which Your Retail Coach is a champion. They are exceptional process consultants and SOP Consultants. Especially when you start a new online business, taking assistance to make a strong system backend that can help you scale business in the future is crucial to protect the investment and gain maximum business advantage. Your Retail Coach has best-in-class management consultants who you can bank on to get these various services and blossom your business.

Get advise for E-commerce retail business : http://www.yourretailcoach.ae/contact-us/

Dubai
United Arab Emirates (UAE)
Phone: +91-9860-426-700
Email: consult@mindamend.net

YRC is a Management Consulting Firm with its presence across India & Dubai.
We help our clients build robust management systems which shall help to reduce their involvement in daily operations. We act as "Growth Partners" to our clients and help our clients grow in an organised manner. We have served more than 100 brands till date and are associated with 85% of them.

This release was published on openPR.