Fulfillment Matters

From April to June 2022, retail e-commerce sales in the United States hit almost $258 billion,¹ the highest quarterly revenue in history. Clearly, buyers’ preferences for e-commerce show no signs of slowing down as they embrace the choice and convenience that online shopping affords.

But behind the success of e-commerce is a decidedly non-“e” element, namely fulfillment. Fulfillment is the movement of tangible products through physical space to reach the doorsteps and mailboxes of consumers. And, as it turns out, efficient fulfillment is a key differentiator in the e-commerce market. Surveys of online shoppers found that 54% of online consumers say that delivery times determine who they shop with² and 69% would be less likely to shop with a retailer in the future if a purchase is not delivered within two days of the date promised.³

The bottom line is that for e-commerce businesses to survive and thrive, it is essential to have an efficient and cost-effective fulfillment process in place. The following are a few general recommendations to help your business build out or enhance its fulfillment infrastructure:

• Ensure that resources are sufficient for fulfilling orders. E-commerce fulfillment operations can require two to three times the space and labor of traditional warehousing operations.
• Plan for the future. Design your fulfillment solution with scalable space, staffing, processes, and technologies, so you can ramp up and down quickly and easily when your business expands or contracts.
• Keep your technology current. AI, automation, and robotics can help your operations achieve peak performance at reduced costs.
• Optimize, optimize, optimize. Add efficiencies all along the chain, from inventory and order management to the number and strategic locations of your distribution centers, to your final end point shipping.

Finally, for many businesses that handle fulfillment internally, it might be time to consider outsourcing to a third-party logistics provider (3PL). For many growing businesses, 3PL’s can provide high efficiency soup-to-nuts fulfillment at reasonable costs.

Large enterprises like Amazon and Walmart have raised the fulfillment bar for all e-commerce retailers. Staying competitive today means keeping pace with consumers’ rising expectations for faster deliveries at ever-lower costs. As your business plans and implements its fulfillment strategy, we at Washington Trust are here to help provide the necessary resources.