May 1, 2013, 4:28 PM

Special Report: Special deliveries

(Page 2 of 3)

Regardless of how efficiently its warehouse operates, a retailer still must pay heed to the details of order fulfillment. Consumers get frustrated when an item is missing from an order or they receive the wrong item. That's why order verification is an important piece of the fulfillment puzzle. To avoid errors, pickers should scan each item's bar code to be sure it is what the customer ordered, and packers should recheck each order as they assemble it.

"Each order must be validated before it leaves the warehouse," says Innotrac's Toner. "Retailers should also send inventory data from the warehouse to the web site to reflect items that are no longer in stock. If an item is listed as in stock on the web site, but is actually out of stock when the order gets to the warehouse, the customer must be contacted immediately to notify them of the situation and find out whether they want to wait for it on back order or remove it from the order."

In addition to providing integrated order processing and warehouse management technology, Innotrac operates eight fulfillment centers across the United States and one call center. The company's European division, Innotrac Europe GmbH, operates a network of fulfillment and contact centers, as well as returns processing facilities in 10 countries, including the United Kingdom and Germany.

Expectations rise

Keeping consumers informed about the status of their orders is increasingly important as consumers' expectations rise. Notifying a customer when an order has left the warehouse and providing a tracking number so he can follow its path reassures the customer that his order is on track to be delivered on the expected date.

"Consumers want to know when their order has been fulfilled and has left the warehouse because they expect responsive customer service with every purchase," says Saddle Creek's Belcastro.

Saddle Creek operates 36 locations across the United States that provide logistics, warehousing, transportation, contract packaging and fulfillment services. Saddle Creek's fulfillment services include configuration of distribution and contact centers, returns processing, order management systems and systems integration.

To avoid issues with out-of-stock inventory, Belcastro recommends that fulfillment operations align processes and procedures with the retailer's order management capabilities to effectively manage back orders. When items are out-of-stock, it is important to notify customers and let them know if their orders will arrive in multiple shipments or be shipped complete.

Giving pickers access to expected inventory delivery times and dates at their workstations can let them know if an out-of-stock item is due in that day and will be available to complete the order in time for the order to be shipped by the end of the day. If that's the case, the picker can fill the next order, placing the previous order on the back burner until the missing item arrives. In the meantime, the retailer is spared from having to unnecessarily contact the consumer about a delay.

"Having that kind of information can help pickers prioritize orders and work more efficiently," says Kiva's Blair. "If a missing item is not going to be available for several days, the system can be programmed to instruct the picker to proceed with gathering the available items and have a service agent immediately notify the customer when the missing item will be available."

Customer communications, however, require a deft touch because shoppers don't want to be bombarded with what they consider unnecessary information. To avoid that scenario, experts recommend that retailers let new customers opt in to receive updates about their order, select their preferred communications channel, such as e-mail, text message or updates through a mobile app, and indicate how often they want to receive such messages.

"Don't send customers information about an order they don't want," says Hermes' Bald. "It's better to let customers tell the retailer what kind of information they want once their order has been placed."

Bald says that for items that require installation, such as appliances or furniture, retailers should provide real-time tracking of the item in transit and choose a delivery company that also offers installation services so the customer doesn't have to coordinate the arrival of the item and the installers separately. Some U.S. retailers such as IKEA and Sam's Club partner with companies that do delivery and installation as part of a one-stop shopping approach. Hermes offers this service in Germany and central Europe.

"The last thing a customer wants is to take a day off work when it's clear the item won't arrive before evening," says Bald. "Real-time tracking provides the customer greater flexibility in preparing to receive the item in these instances."

Once an order ships, retailers must be ready for the package just shipped to be returned. Understanding consumer behavior can help retailers determine the percentage of orders likely to be returned, and help a retailer schedule staff to handle the anticipated workload. For instance, in Germany return rates can be as high as 60% for some items because consumers commonly order multiple sizes of the same item so they can determine the best fit once the product arrives, Bald says. "Retailers shipping internationally need to understand the impact different local customer behaviors can have on returns and prepare accordingly," he says.

Easy returns

Making returns as easy as possible can make the difference between a satisfied and dissatisfied customer. To simplify the returns process, retailers should include a return label, a package in which to return soft goods or instructions on how to reuse the box in which the item shipped. Web merchants should include step-by-step instructions in each order that detail how to return an item and provide customers with a link to an information page on the retailer's web page that explains return policies. A customer service phone number should also be included.

"Retailers want to be sure to communicate their return policy as clearly as possible so the customer knows what to expect," say Saddle Creek's Belcastro. "They should also provide consumers with the tools necessary to return an item with as little trouble on their part as possible. Retailers should also clearly state their return policy when a purchase is made to clarify upfront the conditions under which a returned item will be accepted. An unclear return policy can discourage purchases."

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