Improving your order fulfillment process is crucial to the success of your ecommerce store. Over the years, we have seen a drastic change in customer expectations and behaviors. These changes have had a significant impact on the way online retailers process orders. If you want to keep customers happy and loyal to your ecommerce store, don’t make it hard for them to complete the checkout process.
For many ecommerce businesses, order fulfillment is one of the biggest challenges they face, 54% of online consumers say that delivery times define an ecommerce store. Thus, it is important for online retailers to meet delivery expectations and rapid delivery times. As a business owner, you need to understand that order fulfillment can help with delivering a great customer experience.
Order fulfillment may seem like an easy process but it isn’t. When done right, order fulfillment can have a huge contribution to the growth of your ecommerce business. It affects both the customer experience and the effectiveness of your operations. In this article, we shall take a look at the steps on how you can improve your order fulfillment process.
Steps In Improving Order Fulfillment
- Demand Seamless Integration
- Focus On Customer Experience
- Understand Your Order Fulfillment Cycle Time
- Choose The Right Shipping Company
- Communicate With Customers
- Automate Your Order Processing
- Maintain An Attractive Returns Policy
- Keep Sufficient Inventory On Hand
- Increase Transparency
- Validate Your Metrics
Let’s discuss.
Steps In Improving Order Fulfillment
Ensuring a seamless order fulfillment process plays a vital role in boosting the entire customer journey. If your order fulfillment process is inefficient or broken at any stage, it could have a negative effect on your customer experience and lose the customer forever. Here are the steps on how you can improve your order fulfillment process.
1. Demand Seamless Integration
In reality, you may not be the one manufacturing the products that you sell. You may be sourcing from various distributors with their own warehouse facilities and then dropshipped to your customers. Nowadays, customers expect faster, more accurate order fulfillment. Thus, it is important to ensure seamless integration between you and your suppliers.
Are you still emailing spreadsheets and order manifestos to your logistic providers? If so, you may be restraining your business’ ability to compete. It’s time to transition to a seamless digital exchange. By doing so, you will be saving time, money, and labor for your business. At the same time, you can boost your customer’s confidence that their deliveries will arrive on time and complete.
Ensure that all your computer tracking systems are working seamlessly. The last thing you want to happen is for the orders to get delayed because of some internal issues. This could badly impact the customer experience and could result in lost business. If there are squeaky wheels in the process, be sure to fix them as soon as possible.
2. Focus On Customer Experience
Improving the customer experience can contribute to creating lasting loyalty to your brand. If your customers have been kept on hold or provided with inaccurate information about their product once, they might forgive you. However, if it becomes a habit, you might lose their business to your competitors.
The connection between customer experience and happy customers cannot be denied. That is why you need to make the customer experience your top priority. Research reveals that customers will pay a 16% price premium on products and services, plus increased loyalty. In addition, customers will spend 17% more in exchange for excellent service. The key is to build rapport and earn the trust of the customer to ensure their loyalty to your brand.
Focusing on customer experience translates to more profits because businesses can leverage customer service as both an acquisition and retention tool. 93% of customers are likely to make repeat purchases with companies offering excellent customer service. According to Zendesk, nearly three out of five consumers report that good customer service is vital for them to feel loyalty toward a brand.
3. Understand Your Order Fulfillment Cycle Time
One of the first things to do to improve your order fulfillment process is to work out your cycle time. This will give you valuable insight into the current effectiveness of your order fulfillment process. Ensuring fast fulfillment can have an impact on the customer satisfaction rate, which can ultimately determine the success of your online business.
The order fulfillment cycle time (OFCT) refers to the amount of time between purchasing a product until it is delivered. It is important to maintain a low fulfillment cycle time to compete in the industry. However, controlling the cycle time can be challenging because sourcing the inventory and delivery of parcels are beyond the control of the retailer.
Optimizing your order fulfillment cycle time is critical for the success of your order fulfillment process. 69% of customers report that just one instance of an unpleasant delivery experience is enough to discourage them from making a repeat purchase. Thus, it leaves very little room for error. In order to optimize your order fulfillment cycle time, you need to look beyond shipping concerns and look at the bigger picture.
4. Choose The Right Shipping Company
Shipping is one of the major obstacles to smooth order fulfillment. The sad thing about it is that it will impact your reputation and not the shipper. In the inaugural survey Retail Touchpoints Last Mile Benchmark Report, 49% of ecommerce companies consider delivery times as their leading challenge with expectations of free/low-cost shipping as their third biggest challenge at 44%.
You may think that choosing a shipping company is relatively straightforward but it isn’t. There are a lot of things to consider when choosing a provider. First things first, you want to make sure that the shipping company you have in mind can effectively ship to your customer base. Also, will they be able to ship extra large packages or small and delicate items quickly without damaging or misplacing them? You may need to do some research and speak to other business owners.
When looking for a shipping company, check if they offer real-time and accurate order tracking. Find out if the shipper has a history of late shipments, delayed shipments, lost shipments, forgotten shipments, or damaged deliveries. After all, customers will take out their frustrations on you and not the shipper.
5. Communicate with Customers
Throughout the entire order fulfillment process, you should be closely communicating with your customers. A simple “Thank you” email is not enough. You should provide them with up-to-date, on-demand, and real-time communication about their order status from the moment it was received, processed, shipped, and delivered.
Communication with customers does not stop during the placement of orders. You need to keep them in the loop about the status of their order. Give them frequent updates as to when they can expect their package. Surely you have been a customer yourself and ordered online and wanted to be always updated about your order.
It is important to correct possible issues early on. Some problems related to order fulfillment are due to lack of communication or miscommunication. Take the necessary steps to correct any issues. Don’t wait until the customer cancels before you communicate with them. Ensure a proper flow of communication from start to finish to ensure customer satisfaction and brand loyalty.
6. Automate Your Ordering Process
Manual entry of orders can be time-consuming and prone to errors. Not only will this decrease the efficiency of your employees but your entire business as well. It can result in low-quality work due to the repetitive and simple nature of the job. One of the most effective ways you can speed up the order fulfillment process is through automation.
Order fulfillment involves a large number of complex processes such as inventory management and distribution of goods which can become overwhelming for your warehouse team. Unfortunately, more than 80 percent of warehouses today have no automation whatsoever. If you belong to this number, you could be losing business to the competition.
With automation, you will have access to technologies and equipment that will speed up the process when the inventory enters the warehouse until it leaves. By automating the process, you will be able to minimize errors, increase efficiency & inventory accuracy, reduce labor costs, and improve worker safety. These changes will inevitably lead to higher productivity and profit levels leading to effective warehouse management.
7. Maintain An Attractive Returns Policy
Your returns policy is an essential part of your order fulfillment process. Order fulfillment does not stop when your customer receives an order. Your objective is to ensure that your customer is happy upon receipt of your order. Refunds and returns are part of every e-commerce business. But not every business has a good attitude about it.
There are times when customers receive a damaged or wrong product and would most likely request to return the product or ask for a refund. The customer needs to be fully informed about your returns policy. You need to let the customer know in which cases they will be allowed to resend or refund a product.
Data suggests that 20% of items bought online are returned as opposed to only 9% bought in a brick-and-mortar store. When customers know that they can return or refund their money, they will be more confident to buy from your store. Being transparent with your return policy adds to the customer experience and increases the chances of getting repeat customers.
8. Keep Sufficient Inventory On Hand
One of the biggest stumbling blocks to successful order fulfillment is when an item goes out of stock. It is one of the biggest nightmares that can hit every online retailer. A study by the Grocery Manufacturers of America revealed that the out-of-stock rate in the US is approximately 8 percent. This translates to lost business and reduced customer satisfaction and loyalty as they will feel let down because you don’t have what they are looking for.
To ensure a successful order fulfillment process, you always want to ensure that you carry just enough stock so you will never experience low or zero inventory. Consider implementing a safety stock so that you can still fulfill orders in case of sudden and unexpected spikes in the volume of orders.
Use inventory classification and filters to help you identify quickly moving products and which ones aren’t. Classify your inventory so that you can keep track of the status of various orders. Separating the fast-moving products from those that are not will help ensure that you maintain appropriate stock levels and that you won’t run out of stock.
9. Increase Transparency
Transparency is very important to ensure a successful order fulfillment process. If there isn’t transparent communication, things will quickly fall apart. By being transparent to your suppliers, customers, and everyone in-between, you can develop trust which is crucial to ensuring a successful order fulfillment process. Nowadays, it is very easy to maintain transparency with the proliferation of inventory monitoring apps and technology.
One way of being transparent is to give customers the opportunity to monitor their orders on their mobile devices. Customers will appreciate it if you will tell them when their order is already in transit. Customers have high expectations from online retailers so you need to make sure that you retain their business and keep them satisfied.
Maintaining transparency is essential for maintaining a professional reputation and avoiding problems further down the line. Most ecommerce platforms come with APIs and plugins that provide real-time updates of inventory levels. Being transparent helps maintain satisfaction with shoppers while their orders are in transit.
10. Validate Your Metrics
Metrics help you provide a level of analysis into the effectiveness of your processes. However, you should also determine the how and the why or your process may fall apart. After all, you won’t resolve issues after they have been recognized. By validating your metrics, you will be able to anticipate potential problems and in the process, you can prevent such occurrences from arising.
In order to improve your order fulfillment process, you need to measure the following metrics to determine the performance of your order fulfillment process:
- Percentage of on-time shipment. Make a comparison of the orders dispatched on or before the requested shipping date with the total number of orders shipped within a specific timeframe.
- Average delivery lead time. This is the time it takes for a customer to receive their order. This will depend on the product line or category.
- Fulfillment cost per order. The amount of money you spend to complete an order. It may also include other elements like indirect labor, communication, supplies, shipping costs, and others.
- Order error rates. This refers to the number of orders processed incorrectly compared to the orders in a selected time period.
- Inventory turnover. To compute inventory turnover, divide the cost of goods sold by the average inventory level. This will be a key indicator of the demand for products and the efficiency of procurement.
- Supply chain agility. It quantifies your ability to adapt to change within the marketplace. It often factors in being able to adapt to positive and negative changes.
- Return rate. The return rate is based upon the total orders sent back versus the total orders shipped in a timeframe.
- Returns processing. This is based on the cost of your business to process a return. It is calculated on costs or the average time it takes to process a return.
- Customer retention rate. The customer retention rate is extremely important to monitor as it is a measurement of the quality of the overall ordering experience.
- Customer satisfaction level. This can be measured in a variety of ways like short surveys, questionnaires, or even directly talking to customers over the phone.
By tracking the above metrics, you can look forward to taking your order fulfillment process to the next level. It can help you gain insight into how to optimize the order management process. In the end, it will give you the insights that can drive your business decisions and boost profits.
An effective order fulfillment process is crucial to the success of your e-commerce store. The tips above will help you improve the efficiency of your order fulfillment and eventually boost your profit.
E-Commerce Solutions with airisX
airisX works as a multi-platform, omni-channel solution provider, covering: Amazon, Shopify, eBay, Walmart, niche websites, and many more. With deep industry experience, our team loves cross-border logistics and supply chains, marketplace platforms, revenue growth strategies (through a combination of branding, marketing, advertising, social and more), contract manufacturing, and sourcing.
Being successful in the ecommerce space is more than just listing some products and hoping the sales arrive. airisX Ecommerce Solutions brings together a comprehensive suite of services to cover all aspects of operating and growing an ecommerce business. This allows our clients to achieve more with fewer resources to transform their business for the future.
Our solutions build you a dedicated custom team within our organization to provide you with the toolbox to grow, expand, and service your customers without the overhead and headaches of doing it yourself, all at a lower cost.
Contact us at contact@airisx.com and we will get back to you with a customized solution for your e-commerce business.
