Your new e-commerce website is beautiful filled with call-to-actions and ready for sales, but have you thought about your ecommerce logistics?
If you ship products with any volume you must think about your ecommerce logistics.
How are customers going to get your products? Logistics is the lifeline of your online business, determining how your resources will be received, stored, and shipped. What do you know about blockchain?
Are you ready for accepting cryptocurrency? Did you see Facebook’s announcement about Project Libra? It is an ambitious plan Facebook has to bring cryptocurrency to the masses.
Namely, as an online retailer, you’re responsible for optimizing customer services and ensuring secure, fast, and cheaper product delivery. Since you cater to lots of people from various locations worldwide, each aspect of your supply chain needs to be perfectly optimized.
What are the key elements of a solid ecommerce supply chain? Most importantly, what are the most common challenges online retailers face when building a strategic logistics plan?
Let’s find out!
The Rise of 3PL Companies and Ecommerce Logistics
Managing your ecommerce logistics in-house provides you with greater control. On the other hand, it comes with numerous challenges, from the rising expenses to the inability to grow your ecommerce business properly.
This is logical. As your business grows, your logistics strategy will become more complex. You will need to think about catering to new countries, more customers, managing a larger warehouse, etc.
That is exactly why many digital retailers nowadays don’t do logistics themselves. They don’t have warehouses, either. Their websites only serve as online storefronts, while their supply chain is controlled and managed by a third-party (3PL) company.
3PL companies offer a wide range of services, from providing a streamlined transport management system (TMS), supply chain management, and warehousing to consolidation services and order fulfillment.
The benefits of switching to a third-party company are multiple.
Think about your resources and experiences.
Because they have the knowledge, experience, tools, and industry experts needed to help you achieve the desired results. Well, the same goes for logistics. Hiring an expert to handle logistics for you gives you an opportunity to focus on what you’re good at.
Outsourcing your logistics to a third-party company provides greater scalability opportunities.
Not everyone can become the next Amazon, Ali Baba, or eBay from the very beginning. When entering the uncharted waters of ecommerce, chances are you will first need to start small.
Third-party logistics providers will offer you flexible plans, letting you scale up and down when needed. With their tools and infrastructure, you will be able to provide exceptional customer support, at the pace and scope that suits you.
It is often more affordable than doing it in-house.
The reason for that is simple. Just like any other aspect of your job, logistics evolve over time. Therefore, to stay on top of the ball, you will need to invest in the latest hardware, software, and equipment, which may cost you a pretty penny.
On the other hand, a 3PL company already has the state-of-the-art tools needed to manage your supply chain effortlessly.
Enhancing User Experiences through Fast and Accurate Delivery
Building a fancy ecommerce website, having a solid digital marketing strategy, and selling top-notch products is vital to your online store’s success. Still, the wow factor your online presence triggers is just half the job done. The other half is, of course, customer experiences once they click the “Buy” button.
For example, have you ever wondered what happens when a user finds out that their desired product is not available? Bad purchasing experiences will make most of your customers kick your site immediately and never come back.
Luckily, these are some simple, predictable mistakes that can be avoided.
For starters, you will need to balance out your inventory. Your goal is to deliver the right products, to the right people, as fast as possible.
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And, this is not as simple as it may sound. You will need to constantly evaluate the costs of your inventory, determine how much inventory to hold at each location, assess your turn rates, and so forth.
Inventory management is the basis of your ecommerce business, as it ensures faster and more effective order management.
Also, if you’re using multiple drop shipping services, physical stores, or warehouses, you should synchronize them to stay on top of your inventory data and provide faster order deliveries.
Another great idea is to localize your inventory to increase user experiences and minimize cost. In an era where fast, same-day delivery is prioritized, regionalizing your online store inventory may help you a lot.
Look for local distribution centers. For example, you could work with local carriers to save your time and money and keep your customers happy.
Personalized Customer Support Becomes Crucial for Online Retailers
Marketing and logistics are complementary aspects of your ecommerce business, letting you achieve better performance.
Detailed market research lets you get to know your customers – their needs, preferences, problems, and expectations.
It lets you understand what kind of products your customers are buying, what channels they use to make purchases, and how they pay for your services.
On the other hand, the goal of logistics is to use these insights to provide customers with highly personalized and positive experiences.
Invest in omnichannel customer support.
According to Microsoft’s research 96% of online shoppers consider customer service as the main factor when choosing brands. Still, in the hyper-connected era, we’re living in, customers’ demands are rapidly changing. Today, they expect online brands to provide them with real-time customer support, irrespective of the channel they use.
Start by investing in online customer support channels. Namely, over 50% of customers would rather communicate with your brand online rather than using live customer support. Here are a few brief tips that may help you:
Integrate chatbots with your ecommerce website and social media as a part of your omnichannel customer support strategy. These AI-powered technologies provide 24/7 customer support, allowing customers to get accurate and personalized answers to their questions faster.
Above all, chatbots are highly engaging and interactive, making interactions with customers enjoyable. Let’s remember Sephora’s Messenger bot that provides targeted makeup tips based on a user’s individual preferences, goals, and problems. Given that, it’s not surprising that 69% of online users prefer bots for quicker and more personalized interactions with brands.
Personalize user experiences and ecommerce logistics.
The recent research study by SalesForce shows that 62% of shoppers want to get targeted offers before buying from you. There are numerous ways to do so. For example, you could provide product recommendations, based on your customers’ previous product views or searches.
You could also create segmented newsletter lists based on users’ product preferences or remember the items users clicked on previously to help them continue the purchase right where they left off.
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Free and fast shipping is your biggest marketing tactic.
Free shipping plays a vital role in increasing customer satisfaction. Namely, statistics say that free shipping encourages 9 in 10 customers to buy more products, while 58% of them would even add more products to their shopping cart just to qualify for free shipping. On the other hand, over 60% of consumers would cancel their order is free shipping is not offered.
For ecommerce businesses, free shipping is one of the most important marketing tools. It tells your customers that you care about them and that you value their loyalty.
There is a plentitude of ways to insert free shipping into your logistics strategy. No matter if it is a time-sensitive promotional offer or a minimum order size, free shipping will grab people’s attention and evoke their FOMO.
You should also emphasize your competitive advantage by providing faster order deliveries. 5 business-day deliveries don’t work for your customers anymore. The majority of online businesses are now shipping products in three days or fewer and you shouldn’t be lagging behind them.
By giving your customers an opportunity to get their order fast without paying for them, you will increase their satisfaction and ensure they come back to you.
The Tech Trends that are Disrupting Ecommerce Logistics
Over to You and Ecommerce Logistics
No matter how frightening it may seem to you right now, back-end supply management is an integral part of your ecommerce business. For online retailers, it is even more important, since they don’t have a physical store to keep their inventory.
That’s why you need to plan your e-commerce logistics strategically. Keep pace with the latest tech trends that are dominating ecommerce logistics, improve your delivery options, or simply outsource your ecommerce logistics to a third-party.
Solid logistics serve as an effective marketing plan that emphasizes your competitive advantages and helps you attract new customers and retain existing ones. What are some logistics management companies that can help you?
Any thoughts on ecommerce logistics? We’d like to hear from you!
Elaine Bennett, Digital Marketing Specialist, is a marketing specialist and a blogger, currently based in Sydney. Topics that she covers include marketing, branding, entrepreneurship, and SMBs. She’s especially interested in social media and technology. Loves coffee, music and video games.