Mark Dawson, Founder & Managing Director, Microlistics shares his thoughts on building a powerful omnichannel fulfilment capability to survive.
The eCommerce revolution is only just beginning, and the way businesses respond today will determine whether they survive or thrive in the marketplace of tomorrow.
Latest estimates from the eMarketer’s Global eCommerce Report for 2019 predict US consumers will spend $587 billion online in 2019, a 14% increase from the previous year and representing 10.7% of total US retail spending.
This trend is only increasing, with online sales expected to account for 16% of US retail spending by 2023.
The sectors experiencing the fastest shift to eCommerce are food and beverage at 23.1% and health, personal care and beauty at 18.6%. These are both sectors with a traditionally strong physical retail presence, which are now being swept up in the wave of consumers shifting their preference to online shopping and delivery to their door.
As the eCommerce revolution gains momentum, the expectations of consumers for fast and free shipping is increasing. According to an NRF study, 75% of consumers now expect free shipping on orders under $50, up from 68% in 2017.
While consumer expectations place the burden of paying for shipping on the seller, parcel shipping rates continue to increase at twice the rate of inflation, adding additional pressure on margins.
Businesses are scrambling to adapt to these shifts in consumer behaviour. Moving quickly to establish the capability for fast, efficient omnichannel fulfilment is a critical piece of the puzzle.
Many retailers are opening online storefronts to complement their brick and mortar stores. Manufacturers are adding direct to consumer drop-shipping to their traditional truckload and LTL fulfilment. Third-party logistics providers are investing in their ability to provide sophisticated eCommerce fulfilment capabilities to their traditional clients, as well as plotting expansion into emerging markets.
Regardless of sector or role, businesses require significant adjustments to warehouse operations to take advantage of an expanding market in an atmosphere of high expectations from consumers and increasing costs putting pressure on the bottom line.
Add Pick, Pack, Parcel to your warehousing and fulfilment mix
Not every warehouse management system supports parcel shipping, and not all ‘warehouse management systems’ are created equal. The outcome is that many businesses resort to sending parcels through a carrier-provided or third-party multi-carrier shipping ‘solution’. The result is the creation of data silos and barriers to realising the substantial benefits of either an enterprise WMS or full-feature parcel shipping software.
Whatever the approach taken, building a powerful omnichannel fulfilment capability is an essential ingredient to survival, growth (and profit!) in the post eCommerce revolution marketplace.
So, what does ‘true’ omnichannel fulfilment capability entail? The key elements can be summarised across three key processes:
- Allow for multiple orders picked simultaneously by multiple users
- Enable cross-docking to increase to order to ship cycle times
- Leverage system directed travel paths to ensure fulfilment via the shortest, most efficient path
- Use system generated and directed real-time replenishments
- Scan product barcodes and print labels in real for maximum accuracy
- System-driven waveless fulfilment to prioritise orders based on delivery promise
- Generate optimal carton selection and packing instructions to reduce shipping costs and damage of products
- Use system-generated advanced packing lists and customer labels
- Verify actual versus expected weight and dimensions in WMS to ensure shipment accuracy
- Rate shop for most cost-effective shipping method and transit time across a multitude of transport providers including parcel carriers, couriers, and specialty carriers
- Maintain complete visibility and traceability of orders in transit
- Leverage ASN capabilities of order shipment details
The good news is getting into the eCommerce game doesn’t have to involve substantial capital expenditure and months of time and energy.
With Microlistics WMS, coupled with one of our integrated partners such as Pierbridge (USA) or SmartFreight (ANZ,UK), you can set up a revolution-busing omnichannel eCommerce fulfilment capability in as few as 30 days.
Mark has been at the forefront of supply chain and warehousing for over 40 years. In 1990, Mark formed Dawson Consulting which led the field for 13 years. Mark discovered a gap in Warehouse Management Systems required for the demanding world of 3rd Party Logistics. Founding Microlistics in 1994, Mark has spearheaded the company through 25 years of growth. A graduate of Melbourne University, Mark played VFL for the North Melbourne Kangaroos in the 1970’s having his best year in 1976 when he kicked 26 goals and was a rover in the 1976 VFL Grand Final loss to Hawthorn.