Here are tips for turning a retail store into a fulfillment center.
By Dan Byrne
The meteoric rise of Amazon has completely revolutionized the e-commerce industry and its current business model is now the measuring stick for customer satisfaction and effective shipping protocol.
Its popularity has even led to what some call the “Amazon expectation,” referring to the instant gratification mentality that has engulfed our society. Businesses have taken notice and are franticly working to enhance the customer experience, and this means catering to a delivery-hungry demographic where same-day, next-day, and two-day shipping are no longer just a convenience, they are expected. However, for many brick and mortar retailers, this can be a difficult task.
In order to remain competitive, traditional retailers must now invest in fulfillment center capabilities to expand their e-commerce footprint, and for some, this means turning their store into a fulfillment center. Here are some tips that can help retailers as they take the necessary steps toward transforming their operations:
1) Adopt a Supply Chain Mindset
When retailers embrace the e-commerce side of business, they now find themselves directly involved in the delivery business and their primary job is to increase demand. To manage this transition effectively, it is important for retailers to understand the impact of the digital side of the business and to create the appropriate infrastructure needed to manage inventory and deliver goods effectively. Each retailer must ensure that their web capability is fully functional. Analyzing and understanding the data from all areas of the supply chain is also critical for delivery execution. Additionally, it is important to discover the price point for delivery, as well as locating capable vehicle profiles and carriers that are willing to work with your business. Ensuring that the entire delivery supply chain is working cohesively and smoothly will help speed-up store transformation into fully operational fulfillment centers.
2) Consider Delivery Time, Size and Scope
While retailers are eager to roll out an e-commerce program across their entire blueprint, they must first consider how to manage the demand to optimize their operations. Regarding next day and two-day delivery, businesses are presented with a tremendous challenge. They must be properly equipped with a labor force to efficiently fill orders, as well as think about how they are utilizing their current infrastructure for delivery. Additionally, retailers should know exactly how much inventory is required in-store – both on the floor and in storage – to efficiently fulfill orders. For businesses with various locations, it’s best to utilize multiple stores to manage a specific target area and to implement a two- to four-hour window for delivery. This will aid in minimizing labor and transportation costs, while also meeting the expectations of customers.
3) Elevate the Customer Experience
Today’s consumer likes to feel in control. They expect reasonable shipping prices, package tracking features, the ability to adjust delivery times to their schedule, and assurance their package will arrive in one piece. This should go without saying, but the latest technology is paramount to ensuring these demands are met. Implementing and continually updating technology that connects orders to shipments and tenders them to carriers is vital for success in the e-commerce world. It is also wise for retailers to invest in software that manages shipping prices to remain competitive within the industry. Regarding delivery, retailers can utilize software that sends a link via email or SMS to customers that displays tracking information and provides them with notifications throughout the delivery process. Some of the software even allows customers to communicate directly with the delivery driver, and follow the delivery vehicle via GPS, allowing for real-time refusal or rescheduling of packages. These features during the delivery process engage customers and simplify the experience, which instills user confidence and encourages customers to increase online shopping habits.
4) A Well-Trained Staff is Crucial
Retail associates are a heavy turnover workforce. Therefore, it’s crucial to commit a considerable investment in training these workers, so they can work well together and with carriers. Subsequently, the carrier workforce is also a high turnover workforce, so reinforcing good communications between these two groups is critical for success. For example, a retail store should ensure their staff is fully trained on processing in-store pickups that are generated from online orders. If the staff is not comfortable with this process, it can cause quite a bit of confusion for customers. Additionally, some retailers experience peak seasons where store activity is unusually high and seasonal associates are needed. The online fulfillment aspect doesn’t get factored into the labor equation, so it can be a struggle for retailers to have all associates trained for in-store and e-commerce transactions throughout the year. Again, to be successful, commitment to training and communication is key.
5) Build Relationships with the Pros
A good mentor is important in any industry and e-commerce is no different. One of the most valuable resources for retailers entering e-commerce is to build relationships with seasoned industry veterans who have deep experience in the process and who have done it successfully over the long term. They have likely gone through the ups and downs of the e-commerce process and will be able to provide insightful advice to help retailers avoid making the same mistakes.
As online shopping grows in popularity, consumers will continue to expect fast, no-hassle delivery. For many retailers, turning their stores into fulfillment centers is a necessary next step for economic survival. At USPack Logistics, we expect this to be a growing trend for the foreseeable future and encourage retailers to do their research and invest in the infrastructure needed to best serve their customers.
Dan Byrne is Vice President of Business Development at USPack Logistics, a NewSpring Holdings portfolio company and leading logistics provider custom built for the evolving needs of businesses in today’s same-day delivery world. Byrne is an accomplished commercial leader on the leading edge of “The Amazon Effect,”’ pioneering new transportation solutions for the Delivery Economy.