As e-commerce companies hammer out ways to fulfill customer orders with greater speed and accuracy, more and more of them are offering same-day shipping. With this method, once a customer places an order, it is transmitted directly to the e-tailer’s warehouse, where the item is located, boxed and shipped within hours.
For a small e-tailer that processes only a few orders per day, providing same-day fulfillment is not usually difficult. But at a large company that receives scores of orders every hour, such speedy fulfillment can be a complex and sometimes overwhelming endeavor.
Is same-day shipping the wave of the future, or will customers experience more unfulfilled promises than on-time deliveries?
The move toward same-day fulfillment is gaining speed across the Internet as e-tailers seek to differentiate themselves from competitors. Some companies, however, have been offering this capability for a while.
Diamond.com spokesperson Jeff Kornblum told CRM Buyer that his company began offering the fast turnaround time in 1999, when it launched the e-commerce site.
“We knew it was something that would give us an edge,” he said. “That was especially true back then, when things were just getting started.”
Diamond.com has found that in the current e-commerce climate, when online brand loyalty has yet to emerge, offering same-day service makes a difference for customers.
“We know some people come to the site because of the shipping, especially around the holidays,” Kornblum said. “When someone goes to a site, they want things yesterday. The fast fulfillment allows people to do last-minute shopping, and that’s something that keeps customers coming back.”
Note of Distinction
Additionally, speeding up the fulfillment process is a way to stand out from the e-commerce crowd without spending marketing dollars on pricey print and television ads. Lisa Vagge, vice president of marketing at shoe e-tailer Zappos.com, told CRM Buyer that when the company wanted to stretch its dollars to earn customer loyalty, faster shipping seemed the most logical choice.
“We generally stay away from doing promotional discounts or money off of products,” she said. “The offer of expedited shipping helps, as does offering free standard shipping.”
Some companies have the flexibility to ship in unique ways. For example, flower purveyors can use a network of florists to arrange delivery. FTD vice president of corporate relations Caroline Barni told CRM Buyer that FTD also has added personnel to call centers to speed fulfillment.
“We do many promotional programs, and we’re always adding new products,” she said. “Keeping on top of that and getting orders out fast is an important part of our success.”
Stock in Trade
The process of providing same-day shipping is not without its challenges. Not only must call centers and warehouses be properly staffed, but employees also must be able to deliver on what is promised.
“Our biggest challenge is having the merchandise in stock,” Kornblum said. In order to offer fast fulfillment, he noted, a product must be in the warehouse on the day it is ordered. Ensuring availability requires finesse in terms ofsite updates.
Kornblum noted that to avoid building false expectations among customers, Diamond.com is especially careful about precisely tying together its warehouse inventory system and its e-commerce system.
“We have to watch everything to make sure that we have real-time data and that the site reflects what’s in the warehouse,” he said.
As more e-tailers transmit orders from the customer to the warehouse and out the door in a zippy fashion, a new trend may be about to speed up shipping even more.
Astrid Stevenson, a spokesperson for RedEnvelope, told CRM Buyerthat the company has offered overnight service since its inception as 911gifts.com. “It was our mission to be able to deliver great gifts on a short time frame,” she said. “We were geared toward people like the husband who forgot a birthday or anniversary.”
Since then, RedEnvelope has not just kept the expedited service, but also has found a way to put a seasonal spin on it. For some holidays, such as Valentine’s Day, RedEnvelope promotes an “express gifts” collection that lets customers shop until 11 p.m. EST on the day before the holiday, with guaranteed on-time delivery.
In order to deliver on its promises, the company implemented a new warehouse management system and plans to upgrade its materials handling equipment.
Convenience To Trump Price?
Kornblum predicts this seasonal-shipping trend will strengthen — and that e-tailers that do not keep up may find themselves behind the curve. He noted, “In the direct-mail catalog industry, you saw customers gradually go from making price the most important criteria in their purchasing decisions to making convenience the most important.”
He believes that kind of shift now is coming to e-commerce, in which comparison shopping will be less emphasized and customer convenience will be the focus. Same-day fulfillment is a large part of that shift, he said.
“We’re not there yet, but I think it’ll happen,” Kornblum said. “Price will become secondary, and that will make same-day shipping even more of a customer-loyalty tool.”