6 Critical Strategies for Order Fulfillment During (+ After) 2020
COVID-19 came into our lives like a bull in a china shop, completely disrupting all of our normal day-to-day activities. One of the hardest-hit industries was the retail business.
Many were forced to close, being deemed “non-essential businesses.” Others had to adopt odd hours or practice social distancing and disinfection measures; despite these efforts, many people still avoided them for fear of catching the virus. All of this led to a major growth spike in e-commerce businesses. While this is great for e-commerce retailers, it also has posed some big challenges.
COVID's Impact on Ecommerce Businesses
When the coronavirus struck, many people turned to e-commerce because their favorite retailers were closed. However, even when they began to open, many were still more comfortable ordering from the convenience of their home.
One contributing factor may be that the CDC put out a notice that COVID-19 had poor survivability on surfaces so that there was a “very low risk of spread from products or packaging that are shipped over a period of days,” while shopping in stores put people at risk from others due to spread through respiratory droplets.
For these reasons, COVID-19 retail trends changed, and e-commerce began booming. According to Forbes, total online spending in May hit $82.5 billion, up 77% year-over-year. Experts believe that the virus has essentially accelerated the trajectory of e-commerce growth by 4-6 years! And while some say that, post-COVID, things will return to normal, many in the fulfillment business must continue to operate daily as if every day was Cyber Monday.
While this sudden demand is good for business, it’s also created problems in the form of inventory shortages, back orders, shipping delays, and more, which can result in frustrated customers—or loss of customers.
6 Strategies for Order Fulfillment During COVID
How can e-commerce businesses continue to thrive with the impact of COVID, and take advantage of the online buying booms? Here are six fulfillment strategies.
1. Prioritize Sales Channels
Supply chain issues will eventually level out, so you want to be sure you maintain your most profitable and loyal customers; if they were with you before the pandemic, they’ll likely be with you after it—if you treat them well. While you want to nurture new customers, too, and perhaps turn them into loyal customers, there’s a chance they’re simply using your products or services temporarily because their go-to company is backed up, so always prioritize your regulars.
Pro Tip: If Amazon is your most profitable e-commerce channel, it may behoove you to fulfill those orders first; Amazon stock-outs will negatively affect your inventory performance index (IPI), impacting how your products are treated and come up in searches.
2. Take Advantage of Brand Hoppers
Just because you’re prioritizing regulars, doesn’t mean you shouldn’t try to convert those brand hoppers. Digital Commerce 360 surveys indicate that 44% of U.S. shoppers have tried at least one new brand during the pandemic because their standbys are unavailable or delivery would be delayed. If you’re able to fulfill their needs, brand-hopping consumers can easily be turned into new customers if you’re able to deliver a great buying and unboxing customer experience.
3. Develop Backorder Incentives
One way to avoid losing customers while you restock is to create incentives when an item is on backorder. If a customer can wait for the product, they may choose to order it from you on backorder rather than brand hopping if you provide an incentive, such as free or expedited shipping once it becomes available, a discount, etc.
4. Maintain Fair Pricing
Too many e-commerce businesses have used others’ shortages and their surpluses as an opportunity to price gouge. Don’t do it. You may earn a quick buck doing it, but you won’t gain loyal customers (and you may just run into some legal issues).
5. Streamline Inventory Processes
Online retailers and fulfillment centers can experience labor issues at any time, but the potential for these issues is heightened during the coronavirus due to illness or another quarantine. If you have an IT team, have them organize equipment and tools and streamline processes for remote work, ensuring system access from anywhere.
6. Diversify Your Distribution Centers
If you’re not handling shipping on your own, now may be the time to reconsider your shipping strategy. With warehouse demand on the rise, there are three things you should consider sooner rather than later in case you need to make some changes.
- Be sure you have third-party logistics (3PLs) providers that are following best practices for warehousing, inventory, and distribution during COVID-19 to ensure they’re not shut down due to infected employees.
- Consider moving some inventory to fulfillment centers in areas less affected by the virus just in case your main fulfillment center goes into lockdown.
- Look at where the majority of purchases are coming from; if most are domestic, for example, should you keep some of your inventory within the United States and forgo the financial benefits of overseas manufacturing and production in case there is another travel/shipping ban?
Outsourcing Fulfillment with The Fulfillment Lab
Even in the best of times, fulfillment is challenging, costly, and a big distraction from other important tasks. Now, with the impact of COVID, there’s even more reason to work with a fulfillment partner like The Fulfillment Lab.
- We have sanitation and labor policies in place to prevent contagious diseases from slowing order fulfillment.
- We give you flexibility in inventory storage without increasing fixed costs, which is important when demand shifts are greater than ever.
- We have 14 facilities around the world where you can store inventory, diversifying distribution in case of a COVID surge in one area, without having to use multiple 3PLs.
- We have designated resources to monitor and then adjust procedures for compliance as necessary, which is important as regulations and guidelines continue to change during COVID.
- We invented “fulfillment marketing,” which provides the best customer experiences through customized packaging and more. This is critical for keeping loyal consumers during COVID and converting brand-hoppers.
Want to learn more about The Fulfillment Lab? Contact us today!