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E-commerce and Mobile Shopping Revamps the Fulfillment Center

BY CSA STAFF

By Bill Leber, [email protected]

E-commerce continues to be a bright spot for retailers during the Great Recession. Additionally, the rise of the smartphone is leading us into our first true mobile holiday shopping season. Historically, the majority of the world’s consumer products have been distributed to retail stores in bulk, and the most efficient method for handling this merchandise has predominantly been pallet movement and full-case selection. However, in an industry where the forklift and conveyor belt were “recent” innovations, the e-commerce boom is fundamentally changing the nature of the retail supply chain.

As online shopping continues to compete with and, in many instances, overtake brick-and-mortar retail, retailers are looking for more ways to expand their multichannel operations. According to Datamonitor’s Global Online Retail 2011, the global online retail sector had total revenues of $434.6 billion (USD) in 2010. Additionally, the recent release of iPhone 5 received two million orders in the first few hours – just think of the impact this will have on mobile shopping during the holiday season alone.

New challenges
Due to this increase in online sales and fundamental change in where and how consumers shop, many retailers are outgrowing the traditional supply chain infrastructure and rethinking fulfillment. Retailers must evaluate many new factors. In addition to scheduled weekly store deliveries of pallets and cases, they must factor in split-case picking, item-level touches and multi-line item sortation to fulfill fluctuating volumes of online orders that frequently require delivery to consumers within 24 hours.

Take these challenges and compound them with the emergence of mobile commerce, or “smartphone shopping.” The instant gratification culture that has taken over with the growth of mobile has put a greater burden on the retail supply chain to deliver more products faster, quite literally from mobile device to doorstep in a matter of hours, not days. The distribution center is now the store.

The ‘new breed’ of retail e-commerce consumer expects a lot more in addition to competitive prices. They require cross-channel services such as “click-and-collect” and “order-to-deliver” wider online SKU offerings in-store kiosks; consistent brand experience across the brick and mortar and online storefronts; order accuracy; fast and free delivery; free returns through any channel; and a mobile retail site.

Fulfillment for e-commerce
When consumer needs are compared to the challenges of distribution in an e-commerce environment, there are significant obstacles for fulfillment. These include:

a) Large SKU counts with a very long, slow-moving tail;
b) High and unpredictable growth;
c) High penalty for poor performance resulting in potential brand damage;
d) Uncertain business terrain that demands flexible and adaptive solutions;
e) Demand for real-time and accurate inventory visibility;
f) Small number of orderlines per order;
g) High returns from end customer; and
h) Extreme peak season volumes.

The challenge with the e-commerce fulfillment process relates to having the right systems in place to dynamically process orders for e-commerce channels, versus historical store re-stocking fulfillment. Within e-commerce, where unpredictability is a constant factor, flexibility in the supply chain becomes critical. Retailers can gain flexibility by implementing the right system, one that can support the fluidity that e-commerce cross-channel services require.

Leveraging new dimensions for fulfillment
E-commerce fulfillment is fundamentally a piece-pick operation, which is historically a hands-on procedure. The right automation will minimize manual touch, resulting in more accurate orders, improved ergonomics, reduced labor costs and travel time, decreased returns and saved space by operating in a smaller footprint.

The gold standard of flexibility for any e-commerce business is to be able to easily increase fulfillment throughput and SKU density over time in a capital-efficient manner. Such an automated order fulfillment system should be able to scale seamlessly with a business year after year.

The age of data
The emerging solution for efficient and timely e-commerce order fulfillment is one based on an integrated warehouse management system driving an automated storage and retrieval system, married in the end to efficient goods-to-person piece picking technology. Systems using fast shuttle or robotic bin technology can ensure that real time inventory is always accurate so that when customers place orders, confirmations of the pick and pack process can be provided back to the consumer in less than 30 minutes. The result has been the emergence of new retail supply chains that are consumer-focused rather than product-focused.

Parting thoughts
E-commerce, and now mobile shopping, are fundamentally changing the nature of the retail supply chain. Retailers must learn how to adapt to rapidly expanding and changing e-commerce conditions. Efficiently optimizing inventory, storage space, labor, costs and time in e-retailing is required to attain not only customer satisfaction, but a profitable operation.

Bill Leber, is director of business development, North America at Swisslog, a global provider of integrated logistics solutions with a focus on the retail, food & beverage, pharma, and healthcare industries. He can be reached at [email protected].


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Survey: Online, mobile shopping on the rise for the holidays

BY Katherine Boccaccio

Los Angeles — Survey results released Thursday by PriceGrabber revealed that 16% of consumers will shop using a mobile device during the holiday season, compared with 13% last year. Nearly all respondents indicated that they will do some online shopping from a computer.

The number of consumers who plan to visit brick-and-mortar stores dropped by two percentage points to 46% compared with last year.

PriceGrabber’s data also saw an increase in the percentage of purchases that will be made from a mobile device this holiday season compared with last year. In 2012, the average consumer will make 6% of their holiday purchases from a mobile phone, 62% online and 32% in brick-and-mortar stores. In 2011, the average shopper said he or she would make only 4% of purchases from a mobile phone, 63% online, and 33% in brick-and-mortar stores.

Of the survey respondents planning to use a mobile device to shop this holiday season, 37% said they plan to do the most shopping from their mobile device on Black Friday (Nov. 23). Cyber Monday (Nov. 26) followed closely with 36%. Eleven percent preferred the Saturday after Black Friday (Nov. 24) and 10% indicated Thanksgiving Day (Nov. 22). Only 6% plan to shop on Sunday, Nov. 25 from their mobile device.

When mobile shoppers were asked to select all of the ways in which they plan to use their mobile device to save money on holiday gifts this year, 70% said they plan to check prices online before making an offline purchase. Sixty-six percent indicated that they plan to make purchases from their mobile device, 52% plan to view retailer emails containing coupons and discounts while shopping in stores and 46% said they will use comparison shopping applications and bar code scanners to save money. Forty-one percent noted they will have retailer coupons texted directly to their phones, 40% plan to check store inventory before shopping in brick-and-mortar stores and 33% said they will download shopping apps to earn cash, rewards and points.

"We anticipate that online and mobile shopping will continue to increase in popularity this holiday season because it allows consumers to easily compare products and read merchant reviews, as well as locate the best price on every product without having to visit each and every brick-and-mortar store," said Rojeh Avanesian, VP marketing and analytics of PriceGrabber.com.

When asked to select all of the reasons why they will shop online or from a mobile device for gifts this year, 76% of survey respondents hope to avoid the crowds in brick-and-mortar stores. This number was closely followed by 75% who like to take advantage of free shipping and another 75% enjoy the convenience of shopping around the clock. Seventy-two percent cited the simplicity of price comparison shopping, 67% seek discounts and free shipping and 57% like to read customer reviews.

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P.Lopez says:
Mar-31-2013 05:59 pm

Sixty-six percent indicated that they plan to make purchases from their mobile device, 52% plan to view retailer emails containing coupons and discounts while shopping. Chatrandom

P.Lopez says:
Mar-31-2013 05:59 pm

Sixty-six percent indicated that they plan to make purchases from their mobile device, 52% plan to view retailer emails containing coupons and discounts while shopping. Chatrandom

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Mar-28-2013 03:51 am

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B.Low says:
Mar-28-2013 03:51 am

Belgravia Villas is a new and upcoming cluster housing located in the Ang Mo Kio area, nested right in the Ang Mo Kio landed area. It is within a short drive to Little India, Orchard and city area. With expected completion in mid 2016, it comprises of 118 units in total with 100 units of terrace and 18 units of Semi-D. Ang Mo Kio Cluster House

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Jan-03-2013 04:53 am

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B.Low says:
Jan-03-2013 04:53 am

Potong Pasir New Launch Sant Ritz facilities provide full family entertainment needs for your family and loved ones. Indulge in a serene and tranquil lifestyle right in the heart of Potong Pasir. Several buses are available near Potong Pasir along with shopping centers and restaurants.

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TJX shines among discounters in October

BY Katherine Boccaccio

New York — The TJX Cos. turned in the strongest performance among the discounters in October, reporting a 7% comp sales increase on Thursday.

According to TJX CEO Carol Meyrowitz, the above-plan performance has prompted the retailer to raise its outlook for the third quarter and full year. “We believe the momentum we are seeing in all of our businesses … bode well for the holiday selling season,” she said.

TJX sales for the period advanced 11% to $2.1 billion.

Costco posted a 5% rise in same-store sales, less fuel, which missed Wall Street’s expected 5.6% gain. The wholesale club operator said that the strongest regions for the month were San Diego, the Northeast and the Midwest.

Target Corp. reported a 2.4% same-store sales rise in October, which was near the low end of the company’s expected range, said Gregg Steinhafel, CEO. Its third-quarter same-store sales gain of 2.9% matched Target’s internal forecasts, he said.

In other discounter same-store sales results:

  • Ross rose 4%;
  • Fred’s dipped 0.8%;
  • SteinMart rose 1.7%; and
  • Alco rose 1.9%.

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