Poor Service Destroys Opportunities
In other words, achieving exemplary fulfillment, whether it be the physical delivery of the product or customer service, should be considered life or death for any company.
However, those doing business over the Web need to understand that consumers' expectations are typically higher over that channel. Aside from the basic test of fulfilling orders accurately and on time, companies face several other fulfillment challenges, including:
Integrating fulfillment across multiple channels. Fulfillment is inextricably tied to customer service, so it stands to reason that it must be integrated across every business channel.
Customer service representatives must be able to access real-time information on inventory and order status to provide knowledgeable, efficient service.
A customer shopping at a Web site expects products to be available when they are ordered -- not to find out hours later that his purchase is on back order. Similarly, a customer who has placed an order over the Web, then calls later to change the order, expects the phone rep in your contact center to be able to call up the order and modify it accordingly.
Fulfillment operations should be integrated with Web sites, catalogs and call centers, or else phone reps will not be able to access up-to-date information on order and shipping status.
The only way to provide real-time data on that kind of information is through sophisticated systems integration. Jupiter Media Metrix, New York, reports that 67 percent of online buyers expect offline staff to have access to their transaction history. However, Jupiter said only 18 percent of online retailers can track data across online and offline channels.
Making fulfillment cost-effective. Fulfillment proved to be the Waterloo for many of the dot-coms that have gone out of business during the past two years.
Companies are still grappling with cost efficiency. Forty-four percent of Internet merchants are losing money on the shipping and handling process, according to analysis published by Jupiter in February.
But the need for cost-effective fulfillment reaches beyond the obvious bottom-line considerations. Retailers must be able to keep shipping and handling fees in line with consumers' expectations, or risk losing business.
The NPD Group, Port Washington, NY, reports that 34 percent of Internet users who did not shop online this past holiday season cited shipping fees associated with buying online as the reason for holding back. Thirty-five percent of online buyers cited shipping as a reason for being dissatisfied.
Using integrated fulfillment to improve supply chains. Accessing real-time information regarding inventory levels and movement enables retailers to make more informed decisions about forecasting and purchasing.
When you study what products move -- including how quickly they move -- and weigh those figures against receiving, warehousing and shipping costs, it is much easier to identify cost-effective products and suppliers.
With real-time knowledge of inventory, companies can minimize time-consuming errors and streamline their operations. Retailers can minimize back orders by proactively creating systems to issue purchase orders for new products when inventory reaches certain levels.
The solution to each of these challenges lies in a combination of technology and management expertise.
Sophisticated information technology personnel are required to create multichannel integration, particularly among disparate systems. And seasoned fulfillment managers are key to wringing efficiencies from the fulfillment process.
Companies able to solve these fulfillment challenges will be given opportunities and benefits, including:
• Satisfying/delighting customers to increase repeat business and sales.
• Protecting hard-established brands.
• Improving supply chains.
• Making entire enterprises run more efficiently.