October 22, 2009, 12:00 AM

Web retailers will ship more from regional fulfillment centers, study says

As online retailers continue to offer shipping deals as competitive value propositions, they will resort more to regional fulfillment centers to cut shipping costs while speeding delivery to their customers, FFP Global says in a new study.

Paul Demery

Managing Editor, B2B E-commerce


As online retailers continue to offer low-cost or free shipping deals to compete with value propositions, they are likely to resort more to regional fulfillment centers to cut shipping costs while speeding delivery to their customers, FFP Global says in a new study.

“Fulfillment operations represent an area ripe for improvement,” FFP Global says in the study, “E-Commerce Trends for 1010.” “Through optimized fulfillment operations, retailers have increased flexibility and can offer low-cost or no shipping charges.”

And with retailers facing ongoing economic pressures related to things like transportation costs and value-seeking consumers, FFP Global projects that several fulfillment-related trends will continue to evolve next year.

The study suggests that regional fulfillment centers will play a bigger role in shipping order fulfillment and shipping strategies as retailers leverage them to help satisfy an increasing expectation among shoppers for fast deliveries.

In addition, regional centers can help retailers deal with volatile fuel costs that lead to costly surcharges from carriers.

Other fulfillment trends that will continue to evolve next year include drop-shipping from manufacturers to retailers’ customers and effective reverse logistics systems, the study says.

Effective drop-shipping requires retailers’ order management systems and customer contact systems that can communicate effectively with suppliers, it says. “As vendor reliability is critical, the merchant must be actively involved,” FFP Global says.

With reverse logistics, which support the ability of retail customers to return products to a merchant’s desired location, retailers can improve customer service while also developing a source for selling refurbished products, FFP Global says.

Other sections of the report deal with trends such as mobile commerce and customer service.

FFP Global is a provider of outsourcing services including e-commerce development and fulfillment.




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