Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
It ain’t sexy, but fulfillment and delivery can take e-commerce to new levels.
It may not be glamorous, but fulfillment and delivery operations offer lots of ways to improve a retailer's bottom line with higher sales and lower costs.
Take Steve Madden Ltd., the designer and retailer of footwear and accessories. Serving customers who want a particular shoe style and size immediately, it offers web shoppers an instant fulfillment option. A consumer can enter her size and ZIP code, along with her desired shoe, to see nearby stores with her shoe in stock. If a shopper doesn't want to wait for delivery, she can pick it up at the closest Steve Madden store. Either way, the retailer gets a sale.
"We get a lot of conversions off of this," said Mark Friedman, the retailer's president of e-commerce, in a session at the 2013 Internet Retailer Conference & Exhibition.
Friedman was one of several speakers at IRCE who offered insights into how e-retailers can maximize their returns from fulfillment and delivery operations.
For retailers considering a change in warehouse operations, Jason Duncan, a warehouse management logistics analyst at sports equipment retailer Pure Fishing Inc., offered his views on the several types of warehouse management systems: paper-based product-picking forms, radio frequency tools for locating and picking products, headphone systems that provide audio instructions for picking products, and pick-to-light systems that use colored lights to direct product-picking sequences.
While radio frequency systems are considered the most accurate, voice systems are cheaper, Duncan noted. He said pick-to-light can be the fastest, but is often the most expensive.
For many retailers, Fulfillment by Amazon, an outsourced warehousing and shipping service from Amazon.com Inc., is an important way to fulfill online orders. Amazon Marketplace seller Kat Simpson, owner of shoe and accessories retailer Kat's Closet, said retailers can rely on Amazon for expedient fulfillment and shipping, plus a reliable returns process.
IRCE attendee Brian Beck, CEO of Just4MyPet.com, a web-only retailer of personalized pet products, added that the conference underscored the need for retailers to excel in fulfillment and delivery to remain competitive in an Amazon-dominated world. "Amazon continues to set the bar for the entire industry very high," he said. "The rest of the world needs to match Amazon-set customer expectations for delivery."
Beck said IRCE presented a large number of options for fulfillment and related services. Innotrac Corp., for example, showcased its new SmartHub Performance Reporter, which lets retailers access through a mobile app and online dashboard constant updates of such information as the number of units shipped and the number of units arriving from suppliers to meet future customer orders.
And some vendors offered services specific to a retailer's niche, Beck said. Just4MyPet, for instance, is reviewing offerings from IRCE exhibitor Fifth Gear, which provides engraving and other forms of product personalization as part of its fulfillment services.
With the right mix of fulfillment and delivery technology and services, e-retailers stand a better chance of fulfilling their promises to their customers.