What is flexible fulfillment?
According to Raydiant’s The State of BOPIS Report of 2021, 56% of US customers bought online and picked up in-store. As a result, most online sellers who introduced features like ‘click and collect’ and curbside pick-up during the pandemic have decided to make them permanent.
The COVID-19 pandemic caused severe disruptions across global supply chains. However, large and small retailers adapted quickly to a hybrid shopping model, combining both traditional and eCommerce fulfillment options. This helped uncover customers’ unseeded need for flexible fulfillment options.
Flexible fulfillment is an order fulfillment approach that enables businesses to fulfill customer demand from more than one distribution channel or touchpoint. It helps online retailers improve responsiveness, prevent lost sales, and increase customer loyalty.
Popular flexible fulfillment options include:
- Curbside pick-up.
- Same-day pick-up.
- Same-day home delivery.
- In-store purchase.
- Pick-up lockers.
In this article, we’ll look at the importance of flexible order fulfillment and how it supports online stores to meet customers’ changing shopping behavior demands.
The Importance of Flexibility in Order Fulfillment
It is becoming increasingly complex for businesses to map out their customers’ journeys. Blending digital and in-store experiences has transformed how customers engage and shop from different sales channels. They do a web search on their work computer, compare prices on the way back home, place an order online in the evening, and then visit the brick-and-mortar store to collect their purchase.
Customers expect fast and convenient options. They want next-day delivery to their doorstep, Buy Online Return In Store (BORIS) at your storefront, or pick-up lockers near their home. The aim is to create the right mix of fulfillment options that best fit your customers’ preferences or region.
Businesses need to keep up with customer demand of when and where they want to receive orders to drive strong conversions and stay ahead of the competition. To meet customer expectations, ensure your warehousing and fulfillment operations are adequate to meet their changing shopping trends.
Secondly, with the continuous disruptions in supply chains, online businesses need to establish flexible fulfillment options to complete customer orders from alternative distribution channels.
When you can adapt to sudden changes in customer demand and supply chain disruptions, it helps protect your business in unsuitable times while capturing the sales opportunities these circumstances may present.
Benefits of Flexible Fulfillment
The shift to flexible fulfillment has raised the bar for online retailers. Businesses must adapt to fulfillment innovations by becoming more efficient or risk disappearing from the marketplace.
In this section, we’ll look at some reasons why flexible fulfillment benefits your online store.
1. Allows delivery from any location possible
According to a Usabilla survey, 58% of customers abandon their shopping cart due to high shipping fees, whereas 66% ditch the shopping process because of longer delivery times.
Multi-location fulfillment is a great way to lower your overall shipping costs and streamline order fulfillment. If you ship from only one warehouse location, it’s costly and time-consuming to ship long distances.
You can mitigate that stress and make shipping more efficient by hiring a third-party logistics provider with distribution centers close to your consumer base.
Storing inventory across multiple locations gives eCommerce businesses a competitive advantage by helping them ship to customers faster, at lower rates.
Similarly, a flexible fulfillment strategy can help you solve last-mile challenges by offering multiple delivery options to your customers, such as Buy Online, Pickup In-Store (BOPIS). As a result, you’ll be able to offer faster delivery to your customers while lowering shipping costs.
2. Minimizes risk
When you store all your inventory in the same warehouse, your fulfillment operations are more prone to disruptions due to internal factors like back-ordering–or external problems such as bad weather or a global pandemic.
Splitting inventory across multiple fulfillment centers and distribution hubs gives your staff the flexibility to fulfill orders from other locations. Similarly, they can offer ship-from-store options to customers located closer to their physical locations.
Most eCommerce fulfillment solutions can help you track inventory in real-time and assist in sharing inventory across multiple sales channels. In contrast to centralized inventory management, distributed inventory lets you quickly set up distribution hubs in case of supply chain disruptions and order fluctuations.
A flexible fulfillment partner gives you access to their expertise, labor, warehousing space, and equipment, enabling you to grow your business without spending a fortune. You can expand or reduce these services as your supply needs change, allowing you to keep your costs parallel to your revenue stream.
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3. Improves the customer experience
According to a recent study, 71% of customers expect retailers to offer Buy Online, Pickup In-Store (BOPIS), whereas 62% of customers expect curbside pickup.
Flexible order fulfillment options allow you to complete orders according to the customers’ choice and convenience. This includes offering your customers curbside pickup, Buy Online, Pickup In-Store (BOPIS), Reserve Online, Pickup In-Store (ROPIS), and Endless Aisle options.
Flexible fulfillment options bring products closer to the point of sale. Whether customers pick up ordered items in-store or have them delivered to their home, less physical distance results in rapid fulfillment and a great customer experience.
In addition, when you work with a flexible fulfillment service, you get access to their advanced order management system that lets you track the accurate availability of products and conduct regular inventory audits. It also lets you display only available inventory on your online store and alert the customer to choose a substitution if the items are unavailable.
Without this, you risk allowing customers to place orders when you don’t have sufficient stock. It can put customer lifetime value at risk and risk bad reviews on social media that may harm future sales opportunities.
4. Upgrades product distribution
With flexible order fulfillment, the inventory stored in one distribution center can be used to fulfill new orders. When the customer places an order online, your warehouse staff can route the order to the distribution center closest to the delivery location. This strategy fulfills your orders efficiently, especially when facing large order volumes.
Similarly, when you store your inventory at different distribution locations, you can assign fulfillment of orders based on proximity to the delivery destination to reduce shipping costs and speed up delivery times.
When you can fulfill orders from any location, you minimize the risk of cart abandonment due to inventory stockout in the primary fulfillment center.
Flexible fulfillment options such as BOPIS, ship-to-store, and returns anywhere help you leverage your online audience to bring in foot traffic to your physical store, increasing sales and improving customer satisfaction.
5. Easier tracking
When you fulfill your online orders from multiple locations, you need an effective inventory and order management system to manage customer orders.
Fortunately, automated inventory tracking systems monitor stock levels at different distribution locations as easily as tracking them at one distribution center. You can also track the movement of packages from your warehouse to the customers’ doorsteps, plus send order delivery notifications to your customers.
If you work with a 3PL fulfillment company, you can tap into its technology stack to automatically identify the cheapest shipping option based on available inventory, package size and weight, and destination. These automation tools help you forecast product purchasing patterns to ensure sufficient inventory is available at the right distribution center, ready to be shipped.
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Flexible fulfillment options and multiple distribution centers keep your business operations steady during supply chain delays and peak customer demand. They help you minimize shipping costs and speed up delivery, increasing customer satisfaction and brand loyalty.
Order fulfillment technology gives you accurate visibility throughout your supply chain, improves inventory management, and streamlines the shopping experience for your customers.
Sifted Logistics Intelligence offers tools for eCommerce businesses and shippers to track important metrics and KPIs that can help optimize their order fulfillment process.
Ready to optimize your fulfillment operations? Get a free demo from Sifted!
