Strengthen Fulfillment Through Alliances

Customer satisfaction is crucial to the success of any business, online or offline. Both traditional and online merchants have realized the importance of investing in a relationship with their customers.

For the traditional retailer, customer satisfaction has always depended on the variety and quality of products, good customer service and value — even after the sale. For the online retailer, customer satisfaction will inevitably depend not only on an attractive store offering a variety of goods, but also on an efficient supply chain that will allow for timely delivery.

Inventory management and supply-chain logistics are not new to retailing. They are, however, a new hurdle in e-tailing, as merchants face an increasing volume of small parcels that have to be stored, picked, packed and, most importantly, delivered on time. Businesses are realizing that an online store needs rock-solid back-end support, which requires a real-world foundation and people to run it.

To that end, inventory management has become an increasing challenge. When embarking on an online venture, inventory management needs to be a priority for small and large e-tailers. Remote access to inventory, immediate access to order and payment status, and real-time shipment tracking are crucial.

Bigger players, especially those that already have a bricks-and-mortar presence, need an online solution that will interface with their inventory management system. Smaller players, usually lacking a physical foundation, are looking for a cost-efficient fulfillment solution that will guarantee satisfied customers. They need an automated solution that allows them to concentrate on generating sales without worrying about logistics.

It is no longer efficient for e-tailers to fulfill orders out of their proverbial garage or to depend on a small-scale, back-end integration system. To deal effectively with order cancellations, returns, special handling requests and busy holiday seasons, e-tailers need an online technology system that integrates financial and customer databases with warehouse management systems and streamlines the whole supply-chain process. With rising customer expectations, an entertaining Web site alone will not convert first-time shoppers into loyal customers. A more complicated foundation — including call centers and customer service representatives, elaborate back-end integration systems and fulfillment infrastructure on a global scale — has become essential.

Although traditional retailers may have an advantage over pure plays in terms of experience in delivery logistics, the transition to clicks and mortar raises new problems, such as moving a larger volume of small shipments and dealing with rising customer service expectations 24/7. Small and large businesses — pure Internet plays and bricks and clicks alike — are seeking alliances with established fulfillment players to help them deal with growing demand and rising customer expectations.

However, in today’s market, traditional fulfillment companies have become major players. They are joining the e-commerce space, bringing years of experience and elaborate technology solutions custom made for online businesses. Such fulfillment houses also have the advantage of a global infrastructure. Most of them have grown into e-business solution powerhouses, offering an array of services beyond traditional fulfillment.

The standard has become that old business models evolve to meet the needs of e-business. The logistics suppliers focus their efforts on emerging needs, such as handling small packages on an individual basis. More e-tailers are realizing that the logistics of back-end integration and order fulfillment require a bricks-and-mortar “ally,” a fulfillment facility where real people pick, pack, store and deliver goods.

Prospective e-tailers need to form alliances with the right providers, from e-store designers, hosting companies and online payment processing service providers, to customer service and call center management companies and fulfillment experts. E-tailers also can choose a provider that seamlessly integrates all of these functions in an end-to-end solution. Working with one provider allows for better management and control over the entire e-commerce process — from orders placed on a merchant’s Web site, to shipments delivered to the consumer’s doorstep. Providers that combine traditional commerce and logistics expertise with Internet technology know-how emerge as valuable partners.

As the Internet space evolves, distinctions between pure Internet players and bricks-and-mortar businesses are fading. Offline companies have developed a Web presence, Web-based companies have developed alliances with bricks-and-mortar firms, and new players have entered the scene — all joining to meet the challenges of fulfillment.

In dealing with logistics and guaranteeing customer satisfaction, traditional commerce rules have brought the players together. Gaining an advantage over competitors now depends on the strategies developed to confront fulfillment hurdles, as much as it depends on alliances with experts in the fulfillment space.

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