With the continued rise of ecommerce, traditional retailers need to reconsider their warehousing and distribution strategies.
In 2016, online retail sales totaled $395 billion, an increase of 15.6% over the previous year. To put this figure in perspective, e-commerce accounted for 11.7% of all retail sales in the United States last year.
As ecommerce companies continue to streamline the warehousing and distribution processes, online retail’s share of the overall market will continue to increase exponentially in the coming years. Unfortunately for brick-and-mortar retailers, this trend threatens long-established distribution practices and, as a result, their ability to remain competitive in an increasingly on-demand, digital marketplace.
Now that consumers are able to order and receive inexpensive goods in as little as a day, traditional retailers can’t afford to store inventory in warehouses and ship them in bulk to outlets once every week or two. To better meet changing consumer expectations, retailers will need to work with experienced logistics providers to develop more flexible shipping strategies.
A Changing Game
As e-commerce continues to transform consumer practices, the traditional model for shipping goods is becoming less competitive. While most customers expect a large selection of vendors, a mobile-friendly website, quick delivery, and free returns, retailers have struggled to adapt to these new fulfillment services.
In particular, many lack the advanced warehouse management systems (WMS) and automated technologies needed to expand their inventories, simplify ordering, consolidate shipping operations, monitor goods throughout the shipping process, all while keeping excess overhead to minimum.
The latter is especially important when you consider that today, many consumers will go to brick-and-mortar locations to try out a product in person, then purchase it online at a discount. Advanced WMS solutions leverage predictive algorithms and data sharing tools to help traditional retailers maintain an optimal inventory balance, ensuring popular products remain in stock without the risk of over-ordering, thereby jeopardizing ROI.
A Third-Party Solution
While some established retailers have order fulfillment centers and sophisticated tracking technologies, many SMEs lack the infrastructure needed to compete with major ecommerce operations. By outsourcing shipping programs to third-party logistics providers (3PLs), however, these businesses can increase visibility throughout the warehousing and distribution process; effectively respond to sudden changes in demand and other logistical challenges; and integrate inventory, merchandising, and distributions networks, driving additional value and minimizing risk.
Unlike most in-house fulfillment operations, a 3PL has the personnel and resources necessary to meet consumers’ needs at every stage of the shipping process while simultaneously capturing data that can be used to further improve distribution strategies. As an end-to-end provider, 3PLs will oversee the entire process from the initial order to the final delivery, handling every task from identifying local vendors to processing returns. The best 3PLs will also leverage advanced technologies to gauge the popularity of specific products, transportation costs, and delivery timelines, all of which can be used to optimize operations and boost the retailer’s bottom line.
Your Primary Advantage
With more than 20 years of warehousing and distribution experience under our belt, Primary Freight has the necessary expertise and resources to help smaller retailers achieve sustainable success in the ecommerce age. Instead of offering one-size-fits-all solutions, our dedicated team develops custom strategies that take into account the unique values and goals of your organization. Regardless of your company’s size, we look forward to helping you maintain your competitive edge with innovative technologies and intelligent distribution solutions.
If you’d like to learn more about how Primary Freight’s warehousing and distribution solutions, contact us today at (800)-635-0013.