With online sales on the rise and the spotlight on performance, Internet retailers must deliver the goods this holiday season to seize a sizable opportunity and avoid irreparable damage to customer loyalty.
Success hinges on a well-planned logistics engine with services on which customers can rely, including on-time delivery, accurate shipping, hassle-free returns and impeccable customer service.
Many online retailers are not skilled in developing back-end infrastructure, and these investments can be costly. A third-party logistics provider can offer end-to-end support with automated order-management processes, outsourced fulfillment capabilities, warehousing services, customer care and complete returns management.
Even many click & mortar retailers traditionally viewed as experts in large-scale distribution are looking to third-party providers to handle single-item purchases made through their online marketplaces.
For example, Wal-Mart, a company with possibly the most envied logistics systems in retailing and a history of in-house distribution, is outsourcing order fulfillment for online sales to a top third-party distribution and fulfillment company for their dot-com businesses.
An example of an e-tailer that planned well for the holidays last year is buy.com, a leading Internet superstore. Backed by our company, IM-Logistics, the logistics engine of wholesale technology distributor Ingram Micro, buy.com enjoyed an impeccable record of 99.9 percent accuracy for the computers, software and peripherals sold on the site during the past holiday season. This quarter, we are also fulfilling CE products for buy.com under an expanded agreement signed this past June.
Using a seamless e-commerce connection, buy.com's site connects directly to our internal inventory management system, providing buy.com with real-time order-management capabilities and the support needed to offer a rewarding customer experience.
With 6 million Internet users making their first online purchases this season, according to Jupiter Communications, exceeding consumer expectations has never been more critical. Retailers looking for a third-party logistics partner should therefore consider the following mission-critical functions to meet customer demands:
- Explore the logistics providers' capabilities for customization and accuracy in handling small orders. Internet retailing is forcing traditional fulfillment systems to accommodate smaller orders, which require individual packing and small-parcel delivery.
- Having an Internet-enabled logistics provider is paramount to your success. Be sure to do your research. Several options are available in the marketplace, and it is important that you select a logistics partner that can easily interface with your business systems.
- Integrate a returns management system into your logistics engine. Returns can be costly, and efficient operations can mitigate risks while satisfying customers.
- Make customer care a priority. No matter how sophisticated or state-of-the-art your infrastructure, a helpful voice at the other end of the line is the first line of defense with an unsatisfied or inquisitive customer.
- Look for scalability. Online retailers need partners who can scale to meet customer demand. When retailers are successful at bringing more and more customers to the door, they need a logistics partner who can get more and more product out of the door. Ask about efficiency in meeting increased order volume and look for past performance records during the holidays.
Remember to implement these five simple rules for a successful holiday season, and your dreams of a triumphant e-Christmas in 2000 will come true. n
Michael Terrell is senior VP/general manager of Ingram Micro/IM-Logistics, which offers end-to-end logistics services to manufacturers, e-tailers and brick & mortar retailers selling online. For more information, contact marketing director Shelley Mager at (714) 382-4869 or e-mail her at email@example.com.