3 Ways A 3PL Can Support Your Omnichannel Growth
While omnichannel has become standard practice for many retailers, more than a few emerging brands struggle to meet its demands. In fact, a study from Aberdeen Group Inc. concluded that brands with strong omnichannel strategies retain 89% of their customers, while companies with weaker strategies only retain 33%. Because delivering an omnichannel experience involves so many moving parts, some brands have enlisted the help of third-party logistics (3PL) providers to assist with the omnichannel essentials.
By leveraging its technology stack, industry expertise, and resources, the right 3PL can help brands and retailers with adapting to customer habits to increase efficiency and flexibility, while reducing operational costs.
Keeping track of inventory can be cumbersome, especially during peak shopping seasons, but it directly affects the customer experience, and your bottom line. If inventory is not properly managed, it can open your business to costly problems. For example, outdated inventory information can lead to over- or under-buying products, which can wreak havoc on fulfillment and customer service teams. Additionally, slower moving SKUs can take up valuable shelf space, which could be better utilized for fast-moving items. Inventory issues can also tarnish a brand’s reputation, as inaccurate reporting can lead to inconvenient experiences that may reduce a customer’s trust in a brand.
With up-to-date order management systems (OMS) and real-time inventory monitoring solutions, a well-equipped 3PL can keep accurate inventory data across all channels and at all points of the supply chain to provide current updates for partnered retailers and customers. With this technology in place,a 3PL can create accurate inventory visibility that can show retailers and shoppers a specific item’s availability, allowing the customer or the retailer to use all possible channels to order and deliver products in the most efficient way.
According to Dotcom Distribution’s 2017 eCommerce Study, faster delivery was one of the top factors for brands to gain customer loyalty. More than 600 online shoppers were surveyed and 33.6% of respondents said receiving their package faster would increase their trust in a brand. Timely shipping builds loyalty, ultimately leading to repeat customers. Additionally, 23% of surveyed shoppers have tried same day delivery, indicating that the “want-it-now” mindset is not letting up. With more companies offering sophisticated fulfillment options, customer expectations have caught up, meaning brands and retailers will have to follow suit or fall behind. Many emerging brands, however, cannot offer innovative delivery options to meet this demand.
Trust and Transparency
An experienced 3PL partner can determine the best possible shipping method for a delivery time that meets or exceeds customer expectations. Whether it involves shipping directly to a customer or to the brick-and-mortar location for in-store pickup, a good 3PL will have the resources and established relationships with carriers and shipping service providers to understand the most cost-effective methods to fulfill an order, and the best way to execute them.
Speed isn’t the only priority in fulfillment, as customers also value transparency when an order is being processed. As indicated in our eCommerce Study, 26.5% of respondents said greater visibility when an order is in transit could drive repeat purchases. With order management software and API integrations, a 3PL can push updates that interface with your customer shipping communications. Shipping updates establish a high level of trust because customers always know their order status, helping to build brand loyalty and increasing lifetime value.
Data-Driven Decision Making
While inventory and shipping updates are useful for customers, real-time operations data flowing between a 3PL and a brand helps with strategic decision-making, like adapting to trends. Emerging brands in a growth phase already have a seemingly never-ending workload, and many of them may not have the time or experience to effectively analyze data. Partnering with an experienced 3PL can introduce growing brands to a wealth of extremely valuable industry knowledge that can help them scale most effectively.
Tracking and analyzing customer data, feedback and competitive intelligence is useful when deciding which specific omnichannel functions need to be deployed. When compiling information, it’s vital to integrate it across every channel. Segmenting customers by how and where they purchase can create issues of double counting and may paint an improper picture of a shopper’s buying habits. A better method is to gather information for every interaction on all channels, as it will provide a more accurate depiction of a customer.
Analyzing order volume and sales numbers alone can help determine which products sell and the delivery methods that maximize profits. Additionally, a 3PL can compare that information to industry averages for better insight on a brand’s position compared to competitors. Studying this data alongside information gained through industry research and similar clients can allow a 3PL to properly strategize with a retailer partner for more efficient and profitable operations.
A 3PL partner can help brands roll out omnichannel strategies by maximizing efficiency and flexibility, helping them reach more customers, cater to modern shoppers’ omnichannel expectations, and decrease the associated costs.
To learn more about omnichannel strategies and a 3PL’s role in implementing them, download our Step into Omnichannel white paper.