A fulfillment of desires

There are a trillion reasons why online retailers have to pack each delivery box with something that captures the emotion of the moment. The trick is making those feelings good ones, by seeing what the shopper sees when that package arrives. And those feelings are critical: 47% of consumers told the last-mile technology firm Convey Inc. they would not likely shop with a retailer after a bad shipping experience.

Online retail sales are predicted to reach nearly $910 billion in 2021 – up 13.7% over 2020, according to a report by eMarketer. That translates to billions of packages – an estimated 3 billion were delivered in the last holiday season – and customers expect each shipment to arrive friction-free. In early 2021, 26% of shoppers said they ordered same-day delivery, via online, from a physical store in the previous six months – up from 14% in August 2020.

$2.67 trillion was spent globally on the top 100 online marketplaces in 2020, accounting for 62% of global online retail sales. Gross merchandise sales grew 29% last year, with 50 US-based marketplace sales growing 40% in 2020. E-commerce sales in June 2020 were greater than the 2019 holiday season, and a 77% increase year-over-year. According to Forbes, in-store pickup of online purchases increased 195% in May 2020.

Getting the right product to the right customer, affordably and on time, requires the seamless integration of multiple entities using multiple technologies. Brand owners must be able to store, track and replenish inventory, prioritize orders from multiple channels, manage volume spikes, accurately pick and pack orders, source affordable shipping options and handle returns. A hiccup at any one point causes customer service nightmares.

Fulfillment also becomes one of the largest line-item costs, right behind material goods. An independent study by Fulfillment Companies found that fulfillment costs averaged 10%-15% of gross sales but could reach up to 20% if there is little automation in place. While fixed costs per order will decrease as order volume increases, labor costs will only go up. To lower its cost per order, the business must either invest in its own warehousing technology and automation or find a third-party logistics provider that can provide it for them.

Perhaps the most crucial point in all of fulfillment is that last mile. It guarantees more accurate delivery windows and on-time arrival. However, last-mile delivery can be costly – nearly $10 per package on average because of a shorter timeframe for delivery, which means more time and fuel. Technology and old-fashioned creativity can help offset those costs, but what’s inside the package matters as well.

Many online retailers alert their customers when a package is delivered, giving the customer peace of mind and sharpening the crucial last-mile delivery moment. The return-on-investment for these alerts can be high, because the technology doesn’t have to be costly. Driver-tracking apps make proof of delivery easier, are relatively affordable and can improve delivery efficiency. A grocery seller can also “gift” a free package of a product already ordered, which can help reduce overstocks.

More online retailers are issuing refunds on returns without requiring shoppers to ship the items back. In cases when the cost of the product is close to that of free return shipping, this makes financial sense – a return costs nearly 60% of an item’s original price, on average. But there also can be cases when a repeat shopper is given the option of refund-without-return simply as a ‘thank you’ for continued business.

Consumer packaged goods merchants can bring online customers closer to the brand by inviting them to try new products and provide feedback. The offer can be made while the shopper is ordering online, so there is an opt-in, or as a surprise in the delivery. The company can then reward customers who provide feedback, via email or dedicated site, with a coupon for that product.

With online retail orders approaching $1 trillion, mere speed and accuracy are no longer enough to stand apart from competitors. Online shoppers already expect speed, accuracy and fee-free delivery as baseline requirements. Retailers need to see their shoppers from the insides of their boxes, just as they see them inside their stores.

TMP’s role

TMP focuses on the customer journey from start to finish, including the digital and physical management of products. We provide around-the-clock service and support regardless of the ebbs and flows of traffic. This helps to alleviate stress and free the business of costly space requirements.

TMP provides regular inventory counts and keeps products secure. We can ship or retrieve consumer products and send coupons or refund checks directly from our fulfillment team. Our environmental-friendly solution gives us the agility to give the customer exactly what they need.