“Do your holiday shopping in August”, the media told consumers earlier. That statement is unnerving to many companies wondering how to reduce fulfillment costs when nothing less than a perfect omnichannel experience will do.
Moving into peak season, experts predict a continuation of record-breaking growth in omnichannel and multichannel sales. The volume of orders continues to skyrocket, right along with the cost to fulfill them:
- Businesses faced $223 billion in additional cost of goods during the 2021 holiday season due to freight, manufacturing, and labor
- Logistics complications alone brought $163 billion in added costs in 2021 compared to the prior peak season
- Due to high transportation costs, companies like Jo-Ann Stores paid as much as 10 times more to move products from one point to another
Everything in commerce has changed, except ONE thing
“The customer is always right” (still).
Even though fulfillment costs are going up, there are no signs of consumers budging on their demands for flawless execution:
Research shows that 69% of consumers are much less likely to shop with a retailer in the future if a purchase is not delivered within 2 days of the date promised. It’s no longer a negotiable; Available-to-Sell/Available-to-Promise inventory data must be spot on.
Order fulfillment accuracy is the heart and lungs of delivering the experiences customers demand. Yet, many companies struggle with it due to costly conditions that are out of their hands, including:
- Exponential growth in digital and multichannel commerce
- Crippling transportation, shipping, and labor costs
- Frequent staff turnover and onboarding needs
- Widespread product shortages
- The Amazon Effect – order fulfillment that is impossibly fast, efficient, and accurate is no longer just a differentiator; it’s everything!
At the end of the day, these costly issues and the hoops you jump through to overcome them are NOT what matters in the eyes of a customer.
Your brand is now judged to the same standards as the best omnichannel experience out there today
Omnichannel shoppers give zero… [well… you know; those] how products get delivered to them. Only that they do, as expected.
You’re not getting brownie points for the margins you lost to expedite shipping, the raw calories your teams burned, or the family time they missed on weekends to get orders out correctly and on time. At the end of the day, you either came through or you didn’t.
So you adapt. You press on, looking to defy the myth that ‘only Amazon can do omnichannel profitably’. Great news; that myth is not true…
Perfect omnichannel experiences CAN be beat
And it is happening. Clear evidence of this can be found in DC Commerce 360’s 2021 report:
While Amazon’s annual sales grew in 2020, hitting nearly $303 billion in a single year, they actually lost market share. The report found that 509 of the Top 1000 Retailers grew more than 25% in that same year. This proves that, with the right warehouse management and order fulfillment tools, businesses CAN deliver Amazon-like experiences in a profitable way.
Work smarter, not harder
Growth starts with getting inventory execution right. Companies of any size are capable of consistent 99.95% order fulfillment accuracy with the same-size staff (case in point: EDC):
Compare that to the industry average of just 65%, and you must ask yourself:
- “Where are we in the 3 stages of omnichannel maturity?”
- “Where do we want to be?”
- “Who masters omnichannel and how?”
- “What can I do right now to reduce costs, speed and scale our inventory operations so we can get into that 99.95%?”
Fulfillment cost reduction strategies for omnichannel growth
Fulfillment cost reduction starts with identifying costly blind spots to improve order fulfillment execution. These problems are simple to fix.
What’s hindering your omnichannel growth strategy? Need to scale inventory operations and accelerate omnichannel? Grab Growth Guides—our new 3-part ebook series that illuminates clear, proven strategies tools and best practices to reduce fulfillment costs through efficient, accurate order fulfillment. Download the guide now to build, grow, and go with omnichannel fulfillment.