Overcoming the Challenges of Direct-to-Consumer Shipping with an ERP Solution
March 14, 2018
With ecommerce growing 23% year-over-year, the preferences of customers are changing as well, specifically amongst younger demographics. 50% of Gen Xers and 70% of Millennials prefer shopping online, and that trend is expected to continue. Because of this, distributors need to be prepared to meet the expectations of the next generation of customers as well as their retail partners. And that comes with some new challenges:
High Speed Fulfillment is the New Normal. The average time it takes to fulfill orders has decreased by 60%, and consumers have shown a willingness to pay premium prices to decrease the time it takes to get their packages. To meet customer expectations, distributors often have a window of only 24 hours to receive information from their EDI, find the item that needs to be shipped, retrieve it from the warehouse and fulfill the order.
The Cost of Picking Can Climb. Distributors used to have the ability to send a single product in bulk to a distribution center. Distributors now must send potentially thousands of unique packages to individual customers in addition to their traditional retailer shipments. Without an effective system in place, a company stands to lose large amounts of money trying to maintain such a diverse volume of orders. Turnover also is exceptionally high for warehouse employees industry-wide. The onboarding process to replace those workers can take up valuable time and resources, partially because of complex and inefficient systems that new hires need to learn.
Staying Brand Compliant and Avoiding Mishaps with Inefficient Processes Is Critical. Chargeback fines are increasing across the retail industry, with many distributors dedicating 13% of their account revenue to them. This is at a time when the demands of retailers are increasing. For example, when distributors ship to individuals on behalf of a retailer, they typically need to make sure their packaging appropriately reflects the retailer’s standards (logos, brochures, etc.). Distributors often face heavy penalties if they miss the mark. Meeting these standards without the proper software can be a time-consuming and error-laden activity, which makes matching the expectations of retailers and consumers difficult.
So how do distributors overcome such obstacles? The answer is to implement a comprehensive ERP solution that can integrate with EDI and your WMS. The right ERP software can help manage your shipments, prevent steep penalties imposed by retailers, and streamline your shipping processes. With the right solution, you can increase productivity while meeting the ever-increasing needs of the modern customer.