These days e-commerce fulfillment seems more like a race than a retail endeavor. The companies that make it to the finish line first will be the ones that are best able to keep pace with the ever-churning customer demand machine.
It’s customers who are leading the charge on e-commerce fulfillment. Customers want what they want when they want it. It’s a phenomenon that’s forcing retailers to not only work smarter but also put money into parts of the business that may have been neglected.
More companies are starting to invest in logistics improvements in order to speed delivery of online purchases. A recent story in the Washington Post reported that Target plans to boost annual spending on technology and supply chain initiatives to as much as $2.5 billion a year by 2017. The substantial investment is proof that customer expectations have pushed the company to the limits of its current fulfillment abilities.
“Over time, we’ve been adding stress and complexity to systems that frankly were built for another time,” said John Mulligan, Target’s chief operating officer.
Target, like many other retailers, wants a way to improve the overall efficiency of its operation. The company recognizes that all the channels it possesses to get products to customers have to be fine-tuned and simplified.
Looking to simplify its one and two-day deliveries and reduce reliance on third-party logistics providers such as UPS, Amazon just announced it is leasing 20 cargo planes.
“As Amazon has grown, and especially as it has built out its lucrative Prime business, taking control of its logistics chain has been seen as key to cost cutting and on-time delivery,” wrote Elizabeth Weise in USA Today earlier this month. “The move will aid Amazon in its quest to control more of its logistics chain.”
In Charlotte, Lowe’s recently opened a central delivery terminal to back up one it opened in Syracuse in 2014. Like Amazon, Lowe’s is seeking to improve its delivery speeds and sees these terminals as a method to achieve that. According to the Charlotte Observer, the company sees potential for up to 70 additional terminals across the country.
While many retailers are working to speed up deliveries, they recognize it’s also important to provide their customers with a consistent brand experience within those deliveries.
A survey commissioned by Sealed Air in 2014 showed that two thirds of Americans (66%) believe the packaging of their shipment shows them how much the retailer cares about them and their order. Just under half (48%) think the packaging reflects the value of the shipment. So, it’s not only how fast they get it but how it looks when they get it.
Companies that initiate logistics chain improvements need to consider both the packaging and the packaging operation. Sealed Air is uniquely positioned to fill immediate logistics needs but more importantly to look holistically at an operation to solve the challenges of damage reduction, cube optimization, fulfillment velocity and customer experience.
Retailers that deliver in-store experiences at customers’ doors at the speed these customers demand will have the best chance of winning the e-commerce race.