Memo to Fulfillment: Can We Talk?
As a longtime e-commerce professional, I understand that no online retailer can guarantee 100 percent accurate delivery or 100 percent customer satisfaction. However, I also believe that some of the e-commerce industry's most embarrassing and expensive customer service lapses could have been avoided had marketing professionals been insightful enough to communicate adequately with their fulfillment counterparts.
With that in mind, let me suggest five key reasons why better communication between online retailers' marketing and fulfillment departments can be golden:
Better PR and customer relations. Web marketers have been responsible for some of today's most brilliant marketing promotions. Many also have inadvertently created logistics chaos because they did not know that the things they take for granted, like anticipating how well a campaign may affect traffic, are the things that help their fulfillment professionals stay ahead of the curve.
This communications lapse is a key reason many companies have missed deliveries, received bad press and, in some cases, incurred hefty Federal Trade Commission fines for false advertising. It also explains why many of them lost customers.
By setting up cross-functional meetings between logistics and marketing professionals when plans for a promotion begin, online retailers can give their logistics professionals the time they need to staff up and get supplies for the potential surge in demand.
Our company typically doubles its staff during special promotions. We've found that six weeks' notice is optimal from a supply chain management and staffing perspective.
Reality check. While we're on the subject of creativity, allow me to admit that fulfillment professionals aren't usually marketing geniuses. However, they are outstanding sounding boards because their firm grounding in reality is one of the best litmus tests for whether a marketing concept can be executed all the way to a customer's doorstep.
No one knows a supply chain's limits better than the professionals who live with it every day. As a result, no one is more qualified to advise marketing professionals about the logistical viability of any tactic they propose.
Better synchronization. In real estate, success often depends on "location, location, location." In Web promotions, it often depends upon "synchronization, synchronization, synchronization."
Non-fulfillment professionals would be amazed at how many activities must be precisely timed and arranged to make a promotion's order-filling and customer delivery run smoothly.
For example, a fulfillment center may need to temporarily reconfigure its facility to add an extra packaging area. It may want to move the items being promoted closer to the conveyor line. Or it may want to change the typical order picking configuration, leaving a special promotion item on the pallet and picking it from there instead of putting it in bays.
All of these things affect how quickly and efficiently a promotion's orders can be filled and shipped. And all require time and planning, which is another reason more communication between marketing and fulfillment professionals is needed.
More efficient shipping scenarios. Like many e-commerce professionals, I am delighted to see once-popular online selling techniques like free and fixed-price shipping go the way of the wind. Those tactics eroded many e-tailers' profit margins, and many are still fighting their way back to profitability.
However, we can't ignore that competitive shipping prices are important to Web shoppers, especially if they're comparing two similar click-and-mortar alternatives.
Proper product deployment can make all the difference in terms of package delivery costs because the distance packages travel accounts for about half the pricing equation. Given adequate time, fulfillment experts can help companies forward deploy product closer to customers in anticipation of a special promotion, lowering delivery costs while increasing delivery speed.
While these efficiencies may not make a difference in terms of supporting that particular marketing promotion, they may earn companies a loyal customer for the next one.
Lower inbound transportation costs. In today's tenuous economy, dot-com profitability is often a matter of pennies, and every department must do its best to lower costs.
If e-tail marketing professionals planning a promotion forget to notify fulfillment professionals about the particulars -- when it is, what products are involved, sales projections, etc. -- their fulfillment center won't be able to coordinate inbound shipments in the most cost-effective manner.
And there can be huge cost differences depending on what carrier and form of transportation you use. Worse yet, their fulfillment center may end up in a near stock-out situation requiring expensive, expedited-delivery service to get emergency replenishments.
These extra costs won't affect the marketing department's budget. However, they could be the straw that breaks the camel's back for a company with razor-thin profit margins.
I'd like to end on a positive note. So much has been written about how detrimental bad e-commerce fulfillment can be that it's easy to forget the other side of the story: Good e-commerce fulfillment has the potential to be a powerful marketing advantage.
The most successful online retailers are those that do the best job in terms of service. Companies that deliver products in a reliable, timely and cost-effective fashion have a unique selling proposition. With the right marketing spin, that could be worth its weight in gold. That doesn't mean a company must provide the fastest order fulfillment, or the cheapest. It just means that it has to deliver what it promises.
Better communication between marketing and logistics professionals, the people who promise and the people who deliver, could make all the difference.