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Better Pricing is the Top Factor in Luring US E-Commerce Shoppers Overseas

Shoes directly from Japan? Pottery directly from a merchant in China? Sure, say a growing number of U.S. shoppers, who are quickly learning the ins and outs of buying overseas versus buying from a domestic online retailer.

According to the recently published UPS Pulse of the Online Shopper Survey, Nearly half of avid US online shoppers bought items from international retailers, demonstrating the need for retailers to offer more personalized services as a way to compete against lower prices, according to the sixth annual UPS Pulse of the Online Shopper study. Further, the survey noted, “almost all avid* U.S. online shoppers (97%), made purchases on marketplaces rather than direct store sites, up 12 points from 2016. Also, 81 percent of those surveyed cited price as the most important factor when searching for and selecting products online.”¹

The respondents were attracted to international retailers who:

Clearly show the total cost of the order to the online shopper, including duties and fees

Convert costs to the customer’s home currency

Have a good business reputation

As the chart shows below, online buyers are looking at international merchants for a variety of reasons:

As shoppers get more comfortable with shopping internationally, domestic retailers should be taking careful steps to keep them coming back for additional purchases.

Where Personalized Service Fits In

Responsive customer service is one way to keep shoppers coming back. In reality, many in the retail industry say it is a must for business survival and growth.

“The lines that separate domestic and international retailers continue to disappear,” said Alan Gershenhorn, Chief Commercial Officer for UPS. “Retailers are now competing across the globe. In order to win, retailers can distinguish themselves by providing value through personalized experiences.”²

What does personalized service look like to these shoppers?

Survey respondents cited the importance of a brick-and-mortar store in delivering personalized service:

59% see stores as an important means to touch and feel products

54% view stores as an avenue for immediate problem resolution

Over half of the respondents participate in loyalty programs

50% have used ship-to-store this year, with 41% planning to use it more often going forward

Many leading online retailers are already working diligently to enhance their customer service programs and let their buyers know all about it. For an interesting read on customer shopping preferences and how technology is being used to improve service, read, “Ten Customer Service And Customer Experience Trends For 2017,” by Forbes magazine.

Wooing International Shoppers

The good news is that companies who are at risk of losing domestic shoppers can also bolster their sales by entering the international market themselves.

To attract overseas buyers, a company will need to either internationalize its existing website or launch additional online stores that have been localized to the specific markets they’re going after. As many online retailers have learned, this is no short and simple task. For additional tips on what it takes to truly attract buyers in other markets, read, “7 Ways to Make Your Website Global-Ready,” an excellent article by commerce platform provider Magento.

Controlling e-Fulfillment Costs

As critical as it is to attract international customers, it’s equally important to get control over fulfillment costs once they start buying.

Do your homework before you enter a new market on the characteristics and costs of shipping products to that area. Talk to your carriers before you begin – let them know what your plans are and find out if/how they can help.

It’s also critical, as your business grows, to have a flexible multi-carrier shipping system that enables you to quickly onboard new carriers as you enter new markets. The best solutions make it much easier to determine availability, costs and transit times up front so that customers can see true total costs while they’re shopping – a requirement to prevent shopping cart abandonment.

The best approach is to use carrier-agnostic software that gives your company the ability to compare carrier rates, services and charges, as well as robust delivery tracking and reporting. The system vendor you choose should be experienced in integrating its shipping software with your e-commerce platforms, ERP, WMS, order management and other back office systems.

The provider should also have a ready list of e-commerce companies that are its customers for domestic and international shipping. If this is the case, the company will have previous experience onboarding international carriers for other online retailers doing business overseas, and will be able to make the process smoother for you.

Plan to Go International

What is the projected growth for international online shopping? According to eMarketer, global cross-border e-commerce is projected to grow at an average of 22 percent from 2015 to 2020 compared to 15 percent for U.S. e-commerce during the same time period. (UPS Pulse Survey)

As self-educating as consumers have become, online retailers should expect their customers to grow more sophisticated in their preferences and willing to shop elsewhere to find what they want.

All online retailers should also expect an increasingly international mix of shoppers to visit their site and plan ahead to identify and accommodate their service expectations.

Warehouses and e-commerce distribution tablets are replacing unfriendly and non-ergonomic RF Gun handheld barcode scanners. Ultimately the tablet is a more efficient way for workers to capture the data that matters most, quickly and accurately.

Whether on the manufacturing production line or in the aisles of warehouses the very nature of scanning has changed dynamically away from traditional scanners and to tablets suitable for each environment.

Even the smallest e-commerce company must have the ability to deliver fulfillment with agility, accuracy, and efficiency. The ability to fulfill online orders requires a high degree of inventory visibility and operational efficiency. Inventory and asset management, directed picking, and proof of delivery are identical to the large distribution centers popping up throughout North America. E-commerce fulfillment solutions must allow mastery of high-velocity fulfillment processes and meet the ever-increasing customer demand for rapid product delivery.

Agile Customer Delivery Enabled via Tablet

Much has been written about the fact that customers demand faster order delivery. E-commerce retailers are feeling the pressure to meet that demand and maintain visibility from the time their shipment leaves the fulfillment center, through the last mile and into the customers’ hands.

Increase Efficiency throughout the Warehouse

From receiving to picking and staging to loading, operations with the help of tablets and new warehouse operation systems are becoming more agile, optimized, and better connected to manage inventory, people, and assets. Integration of the supply chain achieves increased efficiencies throughout the warehouse and requires implementation of dynamic fulfillment, which means realized transformational gains with best-in-class hardware, software, and solutions.

High-velocity e-commerce fulfillment centers rely on speed and efficiency to get products stocked, to be picked quickly. Efficiency throughout the supply chain is more important than ever to remain profitable and keep up with fast-paced customer demands.

E-commerce order fulfillment inaccuracies and inconsistencies are doing harm in maintaining hard-fought and hard-won customers. One mis-pick can lose a customer.  The cost of customer acquisition is the single greatest expense in e-commerce. Losing a customer has a dangerous and costly financial consequence. Customers and warehouses must set realistic expectations. This is only possible when data collected via tablets in the warehouse accurately reflect inventory, picking the right product, and shipped rapidly to the customer. Only then is there a successful e-commerce transaction.

The rapid transformation of the logistic industry is driven by some basic principles starting with the customer is always right. In 2017 and beyond the most successful e-commerce companies will provide a seamless connection between the customers’ ordering and receipt of their order.

The rapid transformation and the future of logistics technology for e-commerce rests with two fundamental elements: innovation and expertise. In many cases manufacturers and retailers are using 3PL logistic providers to integrate newer technologies into their service model.

Increasingly warehouses are developing more dynamic relationships throughout their supply chain as a key competitive advantage. New industry standards for innovative logistics in 2017 are established with primary focus on earnings, growth, and customer loyalty.

Logistics and supply chain technologies must provide real-time, totally visible, and accurate data for 24/7 awareness of what is (and is not) in stock and where product is located in the warehouse. Real-time stock tracking prevent confusion about current stock levels ensuring that both customers and warehouse workers are confident about what can be shipped NOW.

Beyond inside the warehouse tracking, customers also want to confirm shipment tracking to improve the consumer experience. Important areas like warehouse technology, customer friendly communication through email and social media provide shoppers more opportunities to re-order. Communicating the status of shipped orders and projected arrival prove helpful and bolster the consumer experience, satisfaction, and drive multiple future order data.

When companies provide updates of the inventories and tracking of shipment movements in the supply chain, the request stock is always accurate. Customers will recall how they were treated by an e-commerce company. The new warehouse logistic technologies, apps on tables, leverage instinctive, graphic data with real-time alerts regarding low quantity or near expiry date inventory.

Never has the world been smaller and with global customers the ability to deliver the product on time worldwide is essential. Customers are global ordering from all seven continents and still expect rapid delivery.

Even the smallest online retailers see strategic necessity in embracing technology warehouse advances. 3PL organizations are making the growth of e-commerce easier for even the smaller e-commerce enterprise to fully take advantage of these new cloud-based applications.

According to Market Share, the official blog for commercial real estate, published by NAIOP, over the last two years, e-commerce logistics real estate was the most active industrial sector in the United States. In fact, it represented 22.5 percent of all big-box leases of 500,000 square feet or more. That is up from 16.1 percent of all big-box transactions from 2010 to 2014, when e-commerce was the third most-active industrial sector.

Large and small warehouses must be stocked and despite the promise of warehouse automation, e-commerce fulfillment and distribution centers create high demand for human workers to replenish inventory. At a time of near full unemployment (4.4% unemployment rate is considered full-employment by the Bureau of Labor Statistics) the demand for e-commerce fulfillment operations labor is greater than ever. When thin margins persist and labor costs are increasing, the urgency for lean and efficient warehouse practices is a simple ROI (return on investment) calculation.

E- Commerce Sales Means 2017 Biggest Sales Ever

The U.S. Census Bureau released its latest report, showing retail e-commerce sales reached an estimated $105.7 billion in Q1 2017, a 4.1 percent increase over the previous quarter and 14.7 percent year-over-year increase compared to Q1 2016.

The Census Bureau said the $105.7 billion estimate is adjusted for seasonal variation, but not price changes. According to the report, e-commerce sales made up 8.5 percent of the total $1.25 billion in retail sales generated in Q1 2017.

E-commerce sales are sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over an Internet, extranet, Electronic Data Interchange (EDI) network, electronic mail, or other online system. Payment may or may not be made online.

Estimated Quarterly U.S. Retail E-commerce Sales

The US Census Bureau plans on releasing its Q2 2017 report on August 17.

Retail e-commerce sales are estimated from the same sample used for the Monthly Retail Trade Survey (MRTS) to estimate preliminary and final U.S. retail sales. Advanced U.S. retail sales are estimated from a subsample of the MRTS sample that is not of adequate size to measure changes in retail e-commerce sales. A stratified simple random sampling method is used to select approximately 10,000 retail firms excluding food services whose sales are then weighted and benchmarked to represent the complete universe of over two million retail firms. The MRTS sample is probability based and represents all employer firms engaged in retail activities as defined by the North American Industry Classification System (NAICS). Coverage includes all retailers whether they are engaged in e-commerce or not.

Online travel services, financial brokers and dealers, and ticket sales agencies are not classified as retail and are not included in either the total retail or retail e-commerce sales estimates. Non-employers are represented in the estimates through benchmarking to prior annual survey estimates that include non-employer sales based on administrative records. E-commerce sales are included in the total monthly sales estimates.

The MRTS sample is updated on an ongoing basis to account for new retail employer businesses (including those selling via the Internet), business deaths, and other changes to the retail business universe. Firms are asked each month to report e-commerce sales separately. For each month of the quarter, data for nonresponding sampling units are imputed from responding sampling units falling within the same kind of business and sales size category or based on historical performance of that company. Responding firms account for approximately 72 percent of the e-commerce sales estimate and about 71 percent of the estimate of U.S. retail sales for any quarter.

With less than six months to the holiday shopping season this growth trajectory for U.S. retail e-commerce sales emphasizes the importance of technological preparedness. 

The National Retail Federation shows the reason the Winter Holidays are so important as a percentage to gross annual sales.

Leading providers of outsourced fulfillment solutions are opening new warehouse as fast as possible in 2017. Many of these new fulfillment centers are strategically located to enable next-day shipping to e-commerce customers across the United States. At capacity, these facilities it will be powered by a staff of approximately hundreds of full-time employees working alongside a state-of-the-art robotic autonomous picking solutions for maximum efficiency and accuracy.

These 3PLs (third party logistics firms) consider site selection as well as strategic carrier partnerships, so they can reach 100% of the U.S. population in no more than two to three days at extremely competitive rates, often with far less accessorial charges than other U.S.-origin zip code. Often the Midwest hub offers e-commerce retailers a quick two-day delivery transit time to New York City, and three-day transit to Los Angeles via ground shipping.   

Managing split inventory cross-country is no longer a necessity when a fulfillment network can provide two-day delivery to most e-commerce shoppers. Coupled with industry-leading same-day shipping performance, these transit times ensure customer orders arrive quickly and accurately. The time savings is found in how rapidly warehouses can process an e-commerce order. In more cases than ever before, distribution centers, warehouse fulfillment centers, and 3PLs can capture the online order and within an hour of receiving the order and make sure it is delivered with a custom – and often personalized – brand experience.

This growth is not only in the Midwest. Since the consumer, thanks in part to Amazon Prime driving even more rapid delivery expectations, companies are looking at four to eight distribution centers and consider them part of important strategic initiatives to increase the capacity of a fulfillment network. The best technology available today, and the best people, increases throughput and empowers employees to work at full capability and capacity.

Area Development asserts gone are the days when companies simply asked their 3PLs to do the “pallet in-pallet out” drill. Increasing e-commerce companies expect 3PLs to perform a host of sometimes complex, intricate, and even strategic tasks that were once performed by the companies themselves, with never a thought that such activities, being so critical to the company’s success, could ever be outsourced. Interestingly, the arrangements are working out so well that not only are companies asking their 3PLs to handle more and more of these value-added tasks, but the 3PLs themselves are coming up with innovative value-added ideas that allow companies (their customers) to focus more on their core competencies.

From a technology perspective, whether the warehouse is at the manufacturers facility or a distribution center to ensure rapid on-time delivery, the increasing popularity in value-added services from 3PLs seems to be growing because of synergy between customers and 3PLs. 3PLs are happy to take these responsibilities on because they make money on labor. Then, as they get more involved, they start to see additional opportunities for revenue and profits.

As Q3 2017 approaches, final holiday inventory preparedness for both eCommerce and 3PLs are taking place.

Shopify insists the holiday season is the most important (and profitable) time of year for online businesses.  The company provides some actionable advice to help small e-commerce firms take advantage of holiday traffic to generate more sales.

The holiday season is almost always the most profitable time of year for online businesses. Not only does the last quarter of the year see increases to the number of orders but the average order sizes also tend to be much bigger as well. In fact, some retailers make up to 40% of their yearly revenue in the last quarter alone.

Shopify acknowledges that with the day-to-day hustle of running an ecommerce business it is easy to forget approaching holidays.  The last two months of the year is packed with special holidays that e-commerce retailers should use to hit yearly targets, move new products, and clear out old inventory.

Bottom-line:  Start planning for the holiday shipping-season NOW.

The single most important change in warehouses over the past two years:  Tablets.

Some RFID guns are becoming less expensive and less bulky as vendors try and compete with the tablet mobile solutions market. Too little, too late.

Standalone or networked PCs are gone, nowhere to be found in distribution center. IT functions in warehouses have been relegated to third party vendors to save money and utilize current, fast-changing, best-practice technology.

Tablets are running warehouse operations—receiving inventory, recording shipments, tracking stock movement, and material flow.

Not only are standalone PCs gone, but tablets are quickly replacing bulky and expensive RFID guns that were a standard fixture in most warehouses over the past decade. Tablets are the backbone for most e-commerce warehouse operations.

Much cheaper than traditional RF guns, tablets are familiar to most warehouse workers.  They are lighter, more ergonomic, and easier to use for laborers without loss of functionality.

Just like RF guns, tablets are vital during the receiving process when product bar codes are scanned to match the shipment to the purchase order and confirm that the item numbers and quantities reflected on the purchase orders correspond with actual shipments.

During the put away process, tablets effectively ensure the product bar codes are scanned and show the item code, description, and storage location for each item in a software-determined sequence that will minimize travel time during the put away process. Tablets ensure products are placed on the correct shelf, slot, bin, or rack position.  Better than RF guns, tablets accurately report the quantity and location each item being stored in the warehouse.

The benefits of tablet scanning for 3PL (third party logistics) applications improve accuracy and efficiency. With real-time inventory visibility, labors costs are reduced.  Reduction in paperwork reduces the amount of information needed to be keyed manually from paper documents by warehouse labor and/or administrative support staff. Elimination of re-keying data minimizes introduction of error and attributes much of the increased productivity and reduced labor expense.

Tablet mobile devices are more durable, and even more suitable to rough warehouse environments. Longer battery life also makes tablets more effecient, making the cost-justification of tablets (90-day ROI) versus RF guns (2+ year ROI).

Tablets are the platform by which add-on apps and Operating Systems (OS) are being developed in warehouse operating systems (WOS). With 90 percent of e-commerce operations, less than $100M in gross annual revenue, smaller individual apps are good for smaller operations. That said, most of these solutions have the capacity to integrate with both WMS (Warehouse Management Systems) and WCS (Warehouse Control Systems).

WOS developers have ensured that regardless of the WCS/WMS utilized, there is compatibility with these operating systems, seamlessly integrating scanning and inventory control.

These considerations of integration means that IT personnel, who rarely have a full-time function in the smaller e-commerce business model, are less involved in maintaining WMS and inventory systems. Strategic supply chain design, organization, and planning is a more valued skillset.

The familiarity of tablet use means less training. Most people, like the shop floor, labor know how to use a tablet, so do their children. This reduced training impacts the bottom-line, driving faster work productivity and throughput and fewer picking errors. The movement away from the RF gun is seamless, rapid, and meets with little worker resistance.

Despite the effort of RF Gun manufacturers to hold-on to market share by nitpicking and fault-finding of tablet devices, the fate of the RF Gun is set.  The tablet will be the industry standard.

The single most important change in warehouses over the past two years:  Tablets.

Some RFID guns are becoming less expensive and less bulky as vendors try and compete with the tablet mobile solutions market. Too little, too late.

Standalone or networked PCs are gone, nowhere to be found in distribution center. IT functions in warehouses have been relegated to third party vendors to save money and utilize current, fast-changing, best-practice technology.

Tablets are running warehouse operations—receiving inventory, recording shipments, tracking stock movement, and material flow.

Not only are standalone PCs gone, but tablets are quickly replacing bulky and expensive RFID guns that were a standard fixture in most warehouses over the past decade. Tablets are the backbone for most e-commerce warehouse operations.

Much cheaper than traditional RF guns, tablets are familiar to most warehouse workers.  They are lighter, more ergonomic, and easier to use for laborers without loss of functionality.

Just like RF guns, tablets are vital during the receiving process when product bar codes are scanned to match the shipment to the purchase order and confirm that the item numbers and quantities reflected on the purchase orders correspond with actual shipments.

During the put away process, tablets effectively ensure the product bar codes are scanned and show the item code, description, and storage location for each item in a software-determined sequence that will minimize travel time during the put away process. Tablets ensure products are placed on the correct shelf, slot, bin, or rack position.  Better than RF guns, tablets accurately report the quantity and location each item being stored in the warehouse.

The benefits of tablet scanning for 3PL (third party logistics) applications improve accuracy and efficiency. With real-time inventory visibility, labors costs are reduced.  Reduction in paperwork reduces the amount of information needed to be keyed manually from paper documents by warehouse labor and/or administrative support staff. Elimination of re-keying data minimizes introduction of error and attributes much of the increased productivity and reduced labor expense.

Tablet mobile devices are more durable, and even more suitable to rough warehouse environments. Longer battery life also makes tablets more effecient, making the cost-justification of tablets (90-day ROI) versus RF guns (2+ year ROI).

Tablets are the platform by which add-on apps and Operating Systems (OS) are being developed in warehouse operating systems (WOS). With 90 percent of e-commerce operations, less than $100M in gross annual revenue, smaller individual apps are good for smaller operations. That said, most of these solutions have the capacity to integrate with both WMS (Warehouse Management Systems) and WCS (Warehouse Control Systems).

WOS developers have ensured that regardless of the WCS/WMS utilized, there is compatibility with these operating systems, seamlessly integrating scanning and inventory control.

These considerations of integration means that IT personnel, who rarely have a full-time function in the smaller e-commerce business model, are less involved in maintaining WMS and inventory systems. Strategic supply chain design, organization, and planning is a more valued skillset.

The familiarity of tablet use means less training. Most people, like the shop floor, labor know how to use a tablet, so do their children. This reduced training impacts the bottom-line, driving faster work productivity and throughput and fewer picking errors. The movement away from the RF gun is seamless, rapid, and meets with little worker resistance.

Despite the effort of RF Gun manufacturers to hold-on to market share by nitpicking and fault-finding of tablet devices, the fate of the RF Gun is set.  The tablet will be the industry standard.

As Published in Wholesale Distribution International. To read the full article, click here.


Hoj Engineering and Sales Inc.

For many businesses, processing and shipping a high volume of small customer orders can prove challenging.

“The trend in the industry is toward larger volumes but in lower quantities – even to the point where you’re picking one item at a time for individual customers,” says Tim Hoj, CEO of HOJ Engineering and Sales Inc., a Salt Lake City-based material handling solutions provider. “A lot of traditional warehouse models aren’t equipped to handle that volume of orders.”

Read the full article online here.

 

As Published in Quality Digest. To read the full article online, click here.


Last Mile Delivery in the Supply Chain 

Flawless order fulfillment from a distribution center or warehouse to the customer’s door is the neglected leg of the supply chain. Ironically, without careful attention to the last mile, e-commerce customers are disappointed with the quality, accuracy, and condition of the products being delivered. Although tablets and mobile devices can provide the needed visibility, they are relatively new to the most important part of the supply chain: last-mile delivery.

Read the full article online here.

 

As Published in A&D India. To read the full article online, click here.


 Achieving perfection in logistics 

Passion, purpose and requirement are the three essential ingredients of any third party logistics, also referred to as 3PL that ensures an accurate fulfillment of maximum orders each day, their delivery-on-time and infusing transparency throughout the process.

Enlinx Logistics Services has cultivated the 3PL approach and has spent years understanding and growing the business. Sharing his insights on this, David Burns, CEO, Enlinx Logistics Services, described his company’s passion for perfect delivery and shared, “We experienced the exhilaration of rapid growth and the frustration of supply chain challenges that came along with it. We understand the importance of logistics and fulfillment in successful business operations. So, we are devoted to perfecting the 3PL business so that customers can stay focused on what they do best, which is further developing great products for their customers.”

Read the full article online here. (see page 54)

Download the PDF here.