Why Order Fulfillment is Critical for Same-Day Delivery

While same-day delivery has yet to become the norm, more people are willing to pay extra to receive an item the same day they purchase it from an online retailer. Several notable players in the eCommerce space have made the move to offer customers same-day delivery, including Target, Staples, Toys R Us, Blue Bottle Coffee, eBay, Amazon and Walmart. The rollout of same-day delivery has been limited to major metro areas, such as San Francisco, California, in many of these cases, but retailers have shown interest in expanding the programs.

While same-day delivery provides customers with yet another option to customize their shopping experience, there is no denying that offering the option will require radical adjustment to order fulfillment operations. To offer same-day delivery, retailers’ order fulfillment processes will be put to the test. Order cycles need to be cut down from hours to minutes or seconds – retailers are not going to be able to offer same-day delivery if it takes them an hour or two just to pick and pack the item.

Moreover, retailers need to improve the efficiency of the fulfillment process as well. Much like two-day shipping, it is quite conceivable that big-name players will push to make same-day delivery the norm. It is a limited option right now, but from the customer perspective, it only makes sense that delivery times get shorter as competition increases. Merchants need to not only be able to offer same-day delivery, they must be able to do it in a cost effective manner.

speed up order fulfillment

Decreasing order cycle times

For modern distribution, cutting down time spent picking and packing orders has been one of the leading challenges. With more people shopping online or via mobile apps, the sheer number of incoming orders has never been higher, and with the prospect of same-day delivery looming, retailers need to be able to process a high volume of orders quickly and effectively without missing a beat. Everything from the logic used to determine the ideal fulfillment location to picking tasks must be well coordinated.

“Warehouse and DC operations that may have traditionally been fulfilling 5,000 orders a day are now expected to fulfill 50,000 orders a day…

“New challenges have emerged on the fulfillment side,” Beth Ann Haven Ferner, director of marketing at OPEX, told Retail Solutions Online. “Chiefly, how to process an increasing number of small quantity, mixed-SKU orders for what is often next day, or even same day, delivery. Warehouse and DC operations that may have traditionally been fulfilling 5,000 orders a day are now expected to fulfill 50,000 orders a day and to do so faster than ever before, often overwhelming their existing fulfillment capabilities.”

Many retailers are investing in new technologies for the distribution center to help streamline order cycles and expedite the picking and packing process while simultaneously improving accuracy. Even incremental improvements can prove game changing, allowing distribution centers to fulfill even more orders per day. New solutions, such as goods-to-person technology that automatically pulls items and delivers them to pickers through conveyor belts, can eliminate time-consuming manual tasks that have hindered distribution centers in years past.

Moreover, automation adds another key benefit in scalability. When processes and tasks are automated, retailers are able to take on a greater workload with the same resources, allowing the solutions to take care of menial manual jobs and having their employers address other, more important tasks. This is critical in decreasing order cycle times, particularly during peak periods where sales are likely to go up.

“These systems can be designed to accommodate the busy holiday shopping seasons and allow companies to meet the ever increasing demands of the busy fourth quarter holiday season,” Blake Bearden, regional director at Bastian Solutions, told RSO.

Better serving the customer through better warehouse operations

When retailers think about serving the customer, it is easy to look at front-end factors such as customer service or sales floor store associates. However, warehouse and order management also play a pivotal role in helping retailers live up to their end of the bargain.

Same-day delivery is becoming increasingly common, and some of the most desirable demographics are the ones opting in, so retailers need to look at how they can utilize this option. Citing a study from Boston Consulting Group, Yahoo reported that affluent millennials, who do most of their shopping online already, were quite likely to spring for same-day delivery. Offering the option may help merchants tap a high-value audience.

Customers have high expectations and eCommerce leaders such as Amazon keep raising the bar even higher via low-cost, timely shipping options as well as speedy same-day delivery. Cutting down order cycle times is pivotal not only to improving efficiency, but also in providing a better experience to customers.