It is reported in a recent survey by Aptos that it costs on average, 18 cents of every dollar of every e-commerce and omnichannel order to get an order into the hands of the customer.
Given how hard retailers have to work to win share of wallet in the first place, that’s pretty depressing but it also represents a huge opportunity. If you could reduce that cost by half or even a quarter, what would that mean for your bottom line?
Retailers have been using dynamic routing and scheduling systems to cut costs out of their delivery operations for years. Trying to reduce the 18 cents by making your routes more efficient is probably something you’ve already done. Achieving a sustainable difference is going to require a solution that reaches beyond your transport office.
Order processing, distribution, last mile fulfillment, and returns have all traditionally been managed separately in standalone systems, perhaps even by separate teams.
By integrating these systems, you will gain inventory visibility across all customer channels and all parts of your distribution chain. This will allow you to (1) remove the data silos that allow inefficiencies to go unchallenged and (2) make excellent customer service the norm.
Once you can provide customers with more accurate delivery choices at the point of purchase, confidently fulfill your promised delivery dates, reduce the number of failed deliveries and get returns back into your inventory faster, then that 18 cents is going to start reducing.
An integrated omnichannel fulfillment system that covers the whole delivery order will allow you to:
– Let customers choose – Irrespective of the channel your customer uses to buy, you should provide a consistent set of choices so that the customer can choose the delivery slot that suits them. Delivery windows chosen by customers are more likely to be successful first time, minimizing your costs.
– Maximize the efficiency of your deliveries – If a delivery is going to consist of multiple items, make sure you are providing a date when all of the items are available to ship so that the delivery is more efficient.
– Choose the best fulfillment method – Automate the choice of delivery channels through a set of business rules so that you know the delivery method is always going to be the most cost-effective.
– Let your customers manage their delivery window – Plans change. Allowing customers to change their delivery window online or by SMS increases the chances of first-time delivery success, and reduces the cost of customer contact, without impacting the customer experience.
Taking a holistic view of the order fulfillment process can be daunting. By taking a look across your fulfillment process from the initial order capture through to delivery management and the returns process, you will be able to identify where the gaps are in your process, and where systems aren’t integrated. Using this information, you can then get a view as to whether your operation could be more efficient, providing you with the opportunity to start cutting that 18 cents fulfillment cost.
You can find out more about Paragon’s modular omnichannel fulfillment system Paragon HDX here, or get in touch with our team today to talk about your omnichannel fulfillment requirements in more detail.
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