E-Commerce Fulfillment Trends
E-commerce growth is being fueled largely by smartphone shopping. Consumers can not only purchase orders on-the-go (24 hours a day) from an ever-increasing "virtual shopping mall," but they also expect to receive items quickly. Bill Leber, Director of Business Development, North America at Swisslog, a provider of integrated logistics solutions, dishes these trends and others impacting order fulfillment, below.
How is the rise of mobile shopping impacting e-commerce fulfillment and what do you expect the impact to be in 2013?
Mobile shopping fuels competition. Many retailers offer comparable products at similar prices, and speed of delivery- the time it takes for a product to get from purchase to doorstep- is emerging as a deciding factor for mobile shoppers.
Consumers expect to receive items quickly and the strategic focus for many retailers is heading towards being able to fulfill orders as soon as the consumer makes the decision to buy. This shift puts the pressure squarely on fulfillment and the back-end of operations to make ends meet.
Mobile shopping is moving the e-commerce needle to a point where same-day delivery must not only be possible, but also profitable. The combination of a user-friendly order experience and rapid delivery will help retailers to drive revenue and rise above the competition.
What other trends are impacting e-commerce fulfillment?
The continued increase in e-commerce demand is changing the nature of the supply chain infrastructure. In the past, companies relied on pallet movement and full-case selection. Now, e-commerce retailers must be able to fulfill fluctuating volumes of online orders for delivery to consumers within 24 to 48 hours. In addition to scheduled weekly store deliveries of pallets and cases, retailers must factor split-case picking, item-level touches and multi-line item sortation into their fulfillment processes to accommodate for fluctuations in demand.
To manage the increase in online shopping, retailers are adopting automated warehousing and distribution technologies that have the flexibility to ensure profitable operations while adapting to expanding or changing conditions in the marketplace.
In addition, consumers are more frequently purchasing larger products online. With the increase in e-commerce and smartphone shopping, the mantra “try in store – buy online” is gaining steam and being applied to much more than apparel, fashion accessories and footwear. More consumers are beginning to purchase big ticket items online, including home furnishings and appliances.
How does the iPhone 5 bolster “click and get” consumer expectations? What can e-commerce merchants do to meet consumer expectations?
The “Web 2.0” era of the Internet developed consumers’ expectations of ordering an item online one day and then quickly receiving it on their doorstep. The iPhone 5 and Passbook’s improved mobile shopping capabilities are bringing about a new age of impulse buying, as well as fueling the instant gratification expectations that go along with such a mindset.
For large online retailers, automated fulfillment technologies are emerging as a necessity to meet the demands of the mobile commerce market. The key to managing consumer “click and get” expectations lies with fast delivery, speed and efficiency; automated distribution technologies save time, optimize selection and increase productivity.
How does Swisslog provide a high-touch, fast experience on the back end?
As more brick-and-mortar retailers integrate e-commerce and transform into multi-channel organizations, it is important they employ technologies that can efficiently process orders for both channels. In June, Swisslog introduced Click&Pick, a high-speed order fulfillment system tailored to the e-commerce retail market.
Click&Pick uses all three dimensions of a warehouse to provide the highest possible inventory storage density, enabling a typical space reduction of 60 percent when compared to storing SKUs in static bin shelving. The vertical storage cube enables Click&Pick to use almost every cubic foot of a distribution center from the floor to the ceiling. Product stored in 100,000 sq ft of carton shelving will be condensed into 25,000 sq ft, including picking stations.
Click&Pick’s high-speed robots run around in rafters to “pick” customer orders quickly from an extremely densely packed product inventory. Click&Pick enables orders to be filled more than five times faster than manual shelving systems; Ergonomic goods-to-person workstations allow pick rates exceeding 1,000 pieces per hour. The system is self-optimizing; Slower-moving SKUs will descend to the bottom of each stack and faster-moving SKUs will continually percolate to the top of the stack for increased productivity. In addition, the number of robots working at the top of the storage cube can be easily increased as needed which helps manage peak fluctuations in shipping volumes without any hard constraints.