WarehouseOS® Helping Non-Amazon E-Commerce Companies Delivery Same Day
Order fulfillment requires accurate picking. Reducing the time it takes to get an order to a customer’s home and replenish its stores is every company’s desire, but while faster fulfillment and small order sizes make customers, and store managers happy, faster fulfillment comes at a cost, reported Russ Meller in Supply Chain 24/7. The bar has been raised. Almost every company is working to reduce the time it takes to get an order to a customer’s home or to its stores. They are following Amazon’s lead in offering next-day, and even same-day delivery. A recent survey showed that 65 percent of buyers want next-day delivery. And another survey showed that 24 percent of online buyers said same-day delivery was important to them.
BI Intelligence “E-Commerce Briefing” reported the results of a new study from L2 which found that a quarter of shoppers would abandon a cart online if same-day shipping was not available, indicating that customers increasingly expect short delivery times.
That is a problem for most retailers, since only one-fifth of sellers offer same-day delivery, and those that do tend to charge exorbitantly high prices for it. As shipping windows continue to narrow — 96% of customers consider “fast” to mean same-day shipping — there is a clear demand for cheap, same-day delivery that retailers could capitalize on.
The Business Insider reported that while Amazon is the clear leader in addressing this demand, the gap is narrower than one might think. Amazon opened 23 new fulfillment centers in the second half of 2016 and plans to invest heavily in warehouses and logistics in the year ahead. The company also launched its Prime Now service, offering one- or two-hour delivery windows, in an additional 18 cities last year. Having a strong logistics network means Amazon will have more control over delivery times and costs, however, building out an efficient network will take time. Amazon’s same-day delivery is still only in 27 cities, which leaves room for other retailers to compete.
All of this customer urgency is putting pressure on retailers as well as industrial distributors to rev-up their cycle times for fast, faster, and fastest fulfillment times compared to competitors. While Amazon is in the news, this is not just an e-commerce arms race. Companies are moving faster to replenish stores too, in order to keep less inventory at each retail location and cut inventory across the entire network. It is not just cycle and fulfillment times that are changing; there has also been a fundamental change in the profile of those orders being fulfilled. E-commerce orders are typically one to two items. Store replenishment order profiles are also getting smaller, and are beginning to resemble e-commerce orders, as stores receive cartons and mixed cartons several times a week rather than pallets and mixed pallets less frequently. One specialty retail client now carries only a single unit of its slowest-moving products on its retail shelves, which is a case for inventory overage. The speed of order fulfillment may not be at the cost of accurate order fulfillment.
The results from these cutting-edge technologies are increased customer satisfaction, increased ability to supply products, and process transparency. Traditional picking methods are one of highest expenses when operating a warehouse. Fast-growing e-commerce companies need scalable solutions to grow as rapidly as the sales trajectory.