5 Online Shopping Facts: Leveraging 3PL for Support
Scott Hothem • March 14, 2014
It is undeniable that the way consumers are selecting and purchasing products is evolving. In order to satisfy these new demands, keep your brand relevant and continue to advance your business, the way you operate needs to evolve as well. Online shopping from home and mobile devices has drastically changed the expectations of consumers. Not only are younger demographics fitting this trend, but your traditional buyers are moving in this direction also. According to iacquire.com, the 45-64 demographic makes up 40.4% of online shoppers. The importance of how your business handles these changes and embraces an omni-channel operation has never been higher. As technology continues to expand in its capabilities, the conventional methods of fulfillment and logistics are proving increasingly out dated. The specialization required to address these changes can be both expensive and difficult to implement within your organization. Leveraging the services of an experienced, capable third party logistics provider (3PL) can allow you the resources to stay ahead of the curve. Below are 5 facts about on-line shoppers that put this growing element of business into perspective.
- The largest share of online revenue generated in 2012 was from retail shopping websites which totaled $186.2 billion. This number is projected to increase to $361.9 billion by 2016 (E-Commerce-Statista Dossier 2013). With such a substantial increase in the size of this market expected, utilizing a 3PL can position your business to capitalize on this rapidly growing segment.
- 42% of consumers chose to find a better price online as their reason for purchasing after shopping in a store (RIS/Cognizant). Price points are becoming a bigger consideration for shoppers. Streamlining fulfillment operations and reducing costs can create a competitive advantage with lower prices.
- The number of U.S. digital shoppers is expected to grow from 137 million in 2010 to 175 million by 2016 (eMarketer). This growing consumer base will also have higher demands as far as fulfillment and delivery options. Your ability to deliver product when and where they desire can create significant new opportunities.
- Half of shoppers say that tracking services for online purchases are essential (comScore). Customers today are avoiding stores and ordering remotely for convenience. A part of that convenience is being able to maintain visibility of their purchase and expect it on a certain date. A 3PL cannot only provide this tracking service, but ensure its accuracy.
- 74% of online shoppers cite having a variety of shipping options available as a key to overall satisfaction (comScore). Does your organization currently have the capability to offer a variety of shipping options? And are these options affordable for the consumer while making sense for your bottom line? The efficiencies and expertise afforded by a 3PL can create a wider variety of shipping methods while also making fiscal sense on both ends of the transaction.
All of these statistics point to a growing variable that cannot be ignored. With the number of existing customers, potential customers, competitors and dollars expanding, you need to be able to position your business to compete. The resources and efficiencies available from a 3PL partner can be specifically geared to face these new challenges and opportunities.
At Barrett Distribution Centers, we work with our clients to create the best supply chain plan for their business. We embrace visibility and technology to generate ROI and a higher level of service.
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Every 3PL can build an impressive presentation. You can review technology, locations, capabilities, services, and carefully selected photographs of the operation, all without ever stepping inside the building. Those details matter, of course, but they only tell part of the story. What happens when you leave the presentation behind and actually walk through the warehouse? Almost immediately, fulfillment becomes more tangible. Instead of hearing how an operation works, you can watch it unfold around you. Inventory is being received, orders are moving through the building, teams are communicating, and the people who could eventually be responsible for your products are doing the work right in front of you. For a prospective customer, that experience can reveal far more than another slide ever could. That philosophy is one of the reasons Barrett Distribution Centers hosts open houses. Mary Glenn, Director of Business Development at Barrett, recently reflected on Barrett's Memphis open house and explained that the intention was never to bring prospective customers into a building just to deliver another sales presentation. “This wasn’t going to be a sales pitch. This wasn’t going to be, you know, come and get PowerPointed to death.”
Apparel brands can manage seasonal inventory by combining accurate inventory visibility, demand planning, flexible warehouse operations, and omnichannel fulfillment. The goal is to have the right products available when demand increases without creating unnecessary inventory challenges after the season ends. A 3PL can help apparel brands prepare for seasonal fluctuations by providing warehouse infrastructure, technology, labor planning, and fulfillment processes that can adapt as order volumes change. Key Takeaways Seasonal demand can create major changes in apparel order volume and inventory requirements. Inventory visibility helps brands understand what products are available across the fulfillment operation. Flexible warehouse and labor planning can help operations respond to changing demand. Omnichannel fulfillment is important when seasonal inventory must serve both ecommerce and retail customers. Why Is Seasonal Inventory Challenging for Apparel Brands? Apparel demand can change significantly based on the season, holidays, promotions, and new product introductions. These fluctuations can affect how much inventory enters the warehouse, how much storage is required, and how quickly orders need to move through fulfillment. Barrett identifies retail seasonality, promotions, product introductions, and demand volatility among the challenges involved in omnichannel and retail fulfillment. How Does Inventory Visibility Help With Seasonal Demand? Brands need a clear understanding of what inventory is available as seasonal demand changes. Warehouse technology and reporting can provide visibility into inventory, inbound orders, outbound orders, and operational performance. This information can help brands and their logistics partners make better decisions as inventory moves through the season. Barrett provides customers with secure web-based access to inventory, item master information, inbound and outbound orders, reporting, and operational dashboards. How Can a 3PL Prepare for Seasonal Order Spikes? Seasonal fulfillment requires more than additional warehouse space. Operations may also need to adjust labor and workflows as order volumes change. Barrett's analytics capabilities include labor planning and productivity measurement, while its Barrett PLUS labor management solution incorporates data from warehouse systems and other operational sources. Planning around expected demand can help the warehouse prepare resources before seasonal volume arrives. How Does Omnichannel Fulfillment Help Manage Seasonal Inventory? Seasonal apparel inventory may need to serve several channels at once. An ecommerce promotion can increase DTC orders while the same brand is also fulfilling wholesale and retail demand. Each channel may require different fulfillment processes even when inventory is managed within the same broader operation. Barrett supports B2B and B2C omnichannel fulfillment for consumer, distributor, and retail customers, allowing different order types to be supported within its fulfillment operations. Why Are Flexible Warehouse Processes Important? Seasonal demand rarely looks exactly the same throughout the year. Apparel brands need fulfillment operations capable of adapting to changing order profiles, promotions, and retail requirements. Barrett's WMS capabilities include customer-specific processing and real-time tasking, while its continuous-improvement approach emphasizes documented processes, training, and operational optimization. These capabilities can support a more flexible approach as fulfillment requirements change. What Should Apparel Brands Look for in a Seasonal Fulfillment 3PL? Look for a 3PL that can support more than peak-season shipping. The provider should have strong inventory management, technology, labor planning, B2B and DTC fulfillment, retail compliance, and reporting capabilities. Apparel experience is also important because seasonal inventory often intersects with retail promotions, product launches, value-added services, and customer-specific requirements. Barrett identifies Apparel & Footwear as a core vertical and combines omnichannel fulfillment with warehousing, value-added services, transportation management, and retail compliance. Frequently Asked Questions What is seasonal inventory in apparel? Seasonal inventory is merchandise whose demand is closely connected to a particular season, holiday, promotion, or selling period. How can a 3PL help with seasonal demand? A 3PL can provide warehouse capacity, fulfillment processes, labor planning, inventory visibility, technology, and transportation capabilities to support changing order volumes. Can seasonal inventory support both retail and ecommerce orders? Yes. An omnichannel fulfillment operation can support both B2B and DTC orders, although each channel may require different fulfillment processes. Does Barrett support seasonal apparel fulfillment? Barrett serves the Apparel & Footwear vertical and its omnichannel experience includes managing challenges such as demand volatility, retail seasonality, promotions, and product introductions.
The contract is signed. Your inventory is moving. Systems are being connected. After months of comparing providers and talking through every detail, your new 3PL relationship is finally becoming real. The first 30 days should not be about handing over the keys and hoping everything works. They should be about turning everything discussed during the sales process into something your customers can actually rely on. Scott Wilkins , Vice President of Customer Solutions at Barrett Distribution Centers, has described implementation as an important moment in establishing that relationship. “The implementation itself really sets the stage for that relationship. The more information that you have up front, the better off that relationship is going to get off on the right foot.” So, what should those first few weeks actually look like? Week One: Get Everyone on the Same Page The beginning should involve a lot of communication. Your 3PL needs to understand more than how many orders you ship. This is the time to confirm inventory details, sales channels, packaging requirements, retailer expectations, technology needs, transportation requirements, upcoming promotions, and the small details that make your business different. You should also know the people involved. Who is your main contact? Who is responsible for operations? Who handles systems questions? Who gets involved when something unexpected happens? Scott describes the work behind building a customer solution as a team effort, saying, “It takes a small army to develop and submit a potential proposal.” That collaboration becomes even more important once the proposal turns into a real operation. Weeks Two and Three: Turn the Plan Into an Operation This is where a lot of the behind the scenes work happens.
