Location Is (Almost) Everything In Shipping and Fulfillment
- Category: Blog
- Published: Monday, 21 August 2017 10:58
- Written by Tim Leverett
Consider this: You’re an ecommerce retailer trying to grow a loyal and happy customer base. You have invested significant time and resources into developing a great product offering, an easy-to-use website, perfectly designed and executed marketing campaigns, and an exceptional customer service team. With these factors in place, you feel confident new customers will find you and return customers will keep coming back.
But a crucial consideration is missing from your customer happiness equation: Logistics.
For the ecommerce retailer, logistics and customer service are one in the same. As customers grow accustomed to on-demand services and faster and cheaper shipping, they’ve become equally demanding of the logistics that gets their purchases to their door.
A 2016 survey by AlixPartners demonstrated these increasing expectations of the online shopper. For example, in 2012 consumers expected to wait 5.5 days to have an order delivered. Four years later, that number decreased to 4.8 days. This survey also found that the second most common reason that shoppers decided not to make an online purchase was the high cost of delivery. This was only 1% behind the number one reason, which was not being able to see the product before purchasing.
There was also a survey conducted by UPS and comScore that found that five of the top eight reasons customers abandon their online shopping carts are shipping related. These reasons included: The shopper was only using the cart to compare shipping costs with other retailers; an order’s value wasn’t enough to qualify for free shipping; and the estimated shipping time was too long.
All this to say, clearly shipping matters.
This creates an interesting challenge for ecommerce retailers. Because even though Amazon makes it look easy, fast and inexpensive shipping is difficult to make work. Distribution costs add up quickly, and a company can only be so giving in terms of shipping options before becoming unprofitable.
Here is where location becomes key. The location of your fulfillment centers defines the last mile experience- where all those shipping costs are incurred. By establishing fulfillment partners or distribution points in densely populated markets, ecommerce retailers can conveniently access more customers with less transit time and costs required. This can enable retailers to strike that balance between convenience and cost and eliminate many of those abandoned carts.
If you want customers to choose you, you need to choose your fulfillment partner wisely. If you are shipping customer orders from locations with even marginally longer delivery times and costs, all that work you put into getting him or her to your site in the first place won’t matter once they see those shipping options.