Instagram and eCommerce for a Material Handling World

Neil Patel is a New York Times bestselling author and The Wall Street Journal calls him a top influencer on the web. Recently, Patel shared that social network giant Instagram had announced that they had grown to 500 million monthly active users. Out of these, 300 million users log onto the platform every day and are active Instagram followers.

Patel argues that this data put the social network platform at the forefront of social media marketing. This is especially notable, given that 68 percent of Instagram followers engage regularly with brands (compared with 32 percent of users on other social networks like Facebook).

TrackMaven research found that the engagement ratio (interactions per post, per 1,000 followers) on Instagram is 8 times greater, on average, than on any other social media marketing platform.

Many eCommerce businesses are finding customer acquisition on Instagram, yet often have little or no experience in the materials handling side of a new, fast-growing eCommerce enterprise. While customer acquisition costs are quite reasonable utilizing Instagram, disappointing those customers with back-orders, delayed shipping, and/or returned merchandise is costly and can cause thin margined operations to go negative very quickly.

Consumers have a choice where to shop online and are fearless about dropping a retailer if their expectations of quality, choice, delivery, free shipping, or ease of returns are not met. Shoppers go elsewhere without hesitation and poorly managed eCommerce order fulfillment means the loss of individual sales, as well as repeat business.

Best-in-Class Fulfillment in eCommerce

Best-in-class fulfillment providers have an industry average of 99.94 percent picking accuracy. A small number of errors may be inevitable. However, errors and damages should be negligible, and not experience dramatic increases during peak times.

More than one-third of online customers will never buy from an online merchant again, after receiving an incorrect order. Incorrect or damaged shipments tracking above average means that the eCommerce fulfillment process may lack the technology and infrastructure needed to maintain order accuracy. Whether from the dining room table, garage, or the first “real” warehouse, fulfillment should be measured with one objective: 100 percent order accuracy. Proper processes and procedures are designed to minimize errors and damages in shipments, included barcoding, shelving systems, automation, quality control, and packaging standards.

Poor Fulfillment Performance Kills eCommerce

Inventory control is often a major challenge for new Instagram-driven eCommerce firms.  With massive SKU proliferation and poor predictive inventory management, bad shipments can quickly spiral out of control. Poor quality inventory control and reporting results in mis-picks. Inventory costs increase and customer service suffers; to preserve customer satisfaction, product is expedited incurring increased freight costs which often exceed the profit margin of a given order.

Traditional fulfillment—encompassing receiving, putaway/storage, picking, transport through the distribution center (DC), sortation, value-added services, packing, and shipping—is a poor option for handling the needs of eCommerce. To compete in this virtual arena, picking, packing, and shipping single items and small volume orders to consumers requires experience and proven results. Orders require delivery to customers within 24 to 48 hours.

Internet retailers need to support an ever-increasing selection of merchandise that typically includes fast-moving items and many very slow-moving items. How these SKUs are picked and handled presents operational complexity which can be solved with careful design planning.

eCommerce is defined by the distribution center which provides much of the customer experience. Instagram eCommerce consumers expect a wide selection of SKU offerings, mobile-site ordering capability, order accuracy, fast and free delivery, and free returns.

Understanding online consumers shopping and purchase patterns across channels, like Instagram, is critical to the success of online fulfillment. Half a billion Instagram users are defining the eCommerce consumer. Knowing the customers and exceeding their expectations is a fundamental baseline of best-in-class eCommerce fulfillment.