Why Next Day is judgement day for online retailers operating ‘mañana’ warehouses.
Next day delivery is now so popular that for the first time it has become the nation’s favourite delivery preference among online shoppers over the economy option. IMRG figures have found more of us (37%) now wanting next day compared to economy (34%) even if it means paying a premium. While in itself this is significant, so too is the dawn of same-day which is already catching on for local deliveries and in five years or so will no doubt be the norm.
If not managed carefully and efficiently the need for speed and convenience at all costs puts increasing pressure on an online retailer’s ability to compete and on their margins. In particular the numerous smaller, growing ones which are already fighting hard to scale their businesses to cope with existing demand, or maximise new market opportunities without sacrificing profits.
There are of course silver linings to meeting these demands. For instance it means the retailer can get returns back in a matter of days and into stock for re-sale before they’re out of date. Some predict too that the arrival and super-convenience of dynamic delivery, where slots are identified and preferences booked by customers in real-time, will help ease and spread the load. But this technology is still largely in the making.
So, for the time being, to be as competitive and responsive as possible with deliveries will mean retailers making cut off points much later. Already the next day 3pm benchmark is starting to look positively lacklustre as some push back to as late as 6, 7, 8, even 10 pm.
Maintaining margins and reputations
But, whatever the delivery option – same-day, next day, or longer - the name of the game will always remain the same: to deliver the correct goods to the right place, on-time, every time. That’s what maintains profit margins and keeps reputations. Even if everything else in the customer experience chain has been made super smooth, it will be a clunky delivery (and returns) process that forms the only and lasting impression.
Of course, major players such as Amazon know this and have deep enough pockets to invest heavily in the necessary resources and technology. Many expanding pure-play and multichannel retailers are equally aware of these challenges but being able to identify them is one thing, putting them right or preventing them in the first place is another.
At the outset, many will have prioritised investing available funds into acquiring suitable e-commerce order processing and delivery management platforms, and integrating them with their accounts software. These are of course absolute necessities for any business serious in succeeding in e-commerce, however, on their own these just won’t cut it when the pressure is on to despatch orders faster while maintaining accuracy. They will not prevent for example, under- or over-selling, over-staffing, or an increase in unforced errors such as mispicks or incorrect address labelling. All of these will inevitably slow things down, reduce productivity and incur unnecessary costs. And ultimately they impact on time to delivery.
The weakest link
The weakest link here is the overall efficiency of the warehouse and fulfilment function, the nitty gritty that must take place between the point of order and the final despatch. Get it right and retailers can be confident in knowing exactly what can and cannot be sold and promised for delivery at any given time, and if an item is available be totally sure it will be picked, packed and addressed correctly to meet the chosen delivery deadline.
With so much at stake it is surprising how many retailers continue to struggle along with paper and pen based warehouse stock management and goods despatch ‘systems’, even though their business has outgrown them and they simply cannot keep pace with the complexities of modern e-commerce.
As customer demand for speed of delivery and convenience prevails, taking steps now to integrate a fit for purpose, scalable e-commerce WMS platform that’s able to easily integrate with popular e-commerce order processing, delivery management and accounting software could well be a more prudent approach. After all, prevention is always better than cure.
Turning the speedy delivery chore into business opportunity:
With the growing demand for Next Day - and even sooner - here are a few key steps to consider for helping ensure your warehouse and fulfilment operation is fit for business:
The Goods Receipt process (Goods In) is the lynchpin of any warehouse. If problems occur here then it will likely cause trouble further down the line.
Doing a manual count is vastly inefficient because it increases the cost of labour and lowers the return. It also increases the risk of mistakes being made, misplaced or lost orders and inaccurate stock figures appearing online.
Use a warehouse management system (WMS) that incorporates barcode scanning which eliminates the margin for human error and ensures that all delivered items are correctly recorded.
The correct stock figures are listed online, meaning fewer oversells or missed sales opportunities.
Avoiding missed sales
The longer it takes for your inventory to register online, the larger the window for missed sales opportunities.
If your process currently involves uploading a CSV file or similar into your e-commerce software, then the best solution is to find a WMS that integrates with this platform and cuts out the file uploading. Inventory figures should be updated across all platforms as soon as they are scanned at Goods Receipt.
Managing large quantities
It is difficult to unwrap and check each item which can lead to inaccurate stock figures. Inaccurate stock figures can then lead to missed sales opportunities, or overselling.
So barcode label the pallet and assign the products to the unique pallet label. This enables you to move the pallet around efficiently. You can also store inner, outer, and pallet quantities in a WMS and use your software to calculate quantities based on defaults.
The key thing to have available if you go down this route is the ability to overwrite the default quantity if you need to.
This is your last line of defence for stopping any order going out incorrectly. If this does happen, you open yourself up to a wealth of problems, the worst of all being a disgruntled customer.
The despatch bench is the last place to spot an error with any order, such as the wrong colour, size, or quantity. Without a WMS, you can only rely on your despatch team's ability to correctly identify a product which can get difficult for inaccuracies such as wrong size or colour. With a warehouse management system that is made for e-commerce, however, these kinds of errors should be flagged up at the picking stage when the item is scanned.
If it isn't, the item being scanned again at the despatch bench is another opportunity for the system to notify the user of an error that might be missed by the human eye.
Manual Address Entry
If you are manually entering addresses then you are relying on the accuracy of humans which is simply not efficient for a competing e-commerce business. Not only are operators likely to make mistakes when manually entering addresses, it also takes an unnecessary amount of time.
With warehouse management software, all customer addressed are stored on the system with the order details. When the items arrive at the despatch bench and the order is scanned, the despatch label will print automatically with the correct details, saving time and reducing errors.
Visibility on Despatched Orders
If you can't track which orders have been despatched in a day then you can't monitor or report on performance. This is incredibly important for identifying what targets your operators are currently meeting and how you can improve.
By using a WMS, every order has a status assigned to it, whether it has been received, allocated to a picker, or despatched. As the order moves through each stage, the status is updated in the system so, when the carriers have all left the warehouse at the end of the day, you will have full visibility on exactly how many orders were despatched.