The first few months of 2017 have seen several major brands closing their retail stores or closing up shop entirely. JC Penney, Kmart, Payless Shoes, RadioShack and Staples are just a few of the brands that have fallen prey to consumer shopping habits that are shifting from brick-and-mortar to the Internet.
Many brands that are still standing are focusing on ecommerce to survive. This should come as no surprise – ecommerce sales grew double digits the past few years, increasing more than 15% from 2015 to 2016. And for now, all signs point to continued strong growth.
The shift to ecommerce is prompting more brands to turn to third-party fulfillment service providers to support their online sales operations and to get product into the hands of customers. Here are 8 trends that are impacting the fulfillment landscape this year and will likely continue to have influence as we look ahead to 2018 and beyond.
#1 - Multichannel Sales
As more brands leverage multiple channels to sell their products, they rely on fulfillment providers to manage their multichannel fulfillment operations. Brands should look for a fulfillment company with multichannel technology that allows for integration with all sales channels and CRM/ERP platforms via API. Brands should also look for a fulfillment provider that is EDI compliant.
#2 - Product Bundles
More brands are using product bundling to help increase revenue and give sales traction to slower-moving inventory. Whether they’re pre-assembled kits or product packs that are assembled on demand, bundling multiple products into a single online order can be better managed with the help of an experienced third-party order fulfillment company.
#3 - Subscription Box Services
The popularity of subscription boxes has skyrocketed over the past few years. More brands are embracing the trend and offering monthly subscription boxes for just about anything – from makeup to socks. As competition grows among subscription box services, brands rely on their fulfillment partners to create an amazing brand experience for customers every month. A great brand experience is in the details – from the packaging and order customization to the personalized details that create a wow factor when the box is opened. It’s critical for a fulfillment provider to consistently deliver a great brand experience every time so customers keep their subscription membership active – and their boxes coming.
#4 - Mobile Orders
Consumers are no longer just researching products on their mobile devices. They’re now hitting the order button as well. For the first time, online revenue from smartphones has surpassed desktop revenue. And by the end of this year, it’s predicted that mobile revenue will increase by a whopping 50%, and will drive half of all U.S. ecommerce revenue.
#5 - Increased Shipping Costs
Major carriers continue to increase their shipping rates – usually by about 5% every year. It’s one of the biggest pain points for brands, especially when pressure is mounting from online shoppers to offer lower shipping costs or free shipping. To reduce shipping expenses, brands are turning to fulfillment centers, which are equipped to perform in-depth data analyses and find cheaper shipping methods based on order destination, contents, package weight and package dimensions.
#6 - Personalization
The personalization of online product orders is beginning to take center stage. Multichannel Merchant reports that personalization – both of the packaging itself and the entire at-home delivery experience – is the next frontier for brands that are looking to stand out from their competition. As a result, fulfillment providers are upping their game when it comes to personalization capabilities.
#7 - Automation
To support the growth that fulfillment companies are facing, many are implementing new automation solutions and other innovative fulfillment technologies that are smart and highly scalable and can keep up with demand. It’s a critical move that ensures they gain the warehouse and operations efficiency they need to succeed.
#8 - Speed
As competition for online sales heats up, the brands that are most adept at delivering orders fast and at a modest price will come out on top. Shoppers now expect faster deliveries, and fulfillment providers are adapting to meet those expectations. The key to success is how quickly providers can get shipments out the door once an order is received. Brands should look for fulfillment companies that offer shipping cutoff times that are later in the day. This ensures more orders get shipped out the same day they come in.
If you’re considering new fulfillment options for 2018, give PFC a call at 1-800-493-7063 or contact us online. Our experienced team is here to answer your questions and get you on the path to saving 30-40% on your fulfillments costs.