What You Can Learn From Top Enterprise Warehousing Strategies

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Customer Experience – from click all the way through to delivery, and more

In the age of omnichannel, customer experience has become the central mantra. Especially true of those that sell online, much of the focus in improving customer experience has been centered on visual aspects. Second to this, there has been a drive towards reducing barriers to purchase with the aim, presumably, of leaving consumers less time to consider their wallets.

But only more recently have businesses selling through these digital channels realized that the customer experience does not, in fact, end at clicking ‘Pay Now’. Customer experience, ideally, is a circle without end, with delivery being the make-or-break moment in many cases on whether or not this circle is maintained or broken in the customer returning to shop again, or to find greener pastures.

So the idea of what customer experience means to omnichannel businesses has quickly expanded from user interface-focused to encompass everything from first click, all the way down to delivery – third party logistics and omnichannel fulfillment. The concept of care in that final touch with your customer — fulfillment — has already been validated by enterprises and mega-companies. This is particularly clear with Amazon’s click-to-delivery strategy; Amazon is well-known for strategically placed warehouses across and their Fulfillment By Amazon (FBA) services for businesses selling through the marketplace.

But with the news of new strides to be made in that final step of delivery, businesses, pundits, and trend-callers alike got, perhaps, a little excited. Conflation between the concepts of ‘customer experience’ and ‘delivery’ inevitably lead to some interesting conclusions to be drawn; namely, that speed of delivery meant amazed and satisfied customers everywhere. But the reality of click-to-delivery customer experience is that it is multifaceted and complex — just like customers themselves.

When faster isn’t always better

When complex problems can’t be grasped immediately, people and businesses alike fixate on what they can understand — it’s simply human nature. In the case of VL’s sophisticated data integration platform, we run into this barrier from time to time due to the complex nature of what we do. A similar situation developed around click-to-delivery and customer experience. Without a deep understanding of the nuances of what customers actually want, everyone fixated on the one thing they could wrap their heads around: shipping speeds. The concept caught fire with Amazon’s 2014 test of 2- and 1-hour delivery times in Manhattan. Free 2-hour delivery was promised for the area with the option to upgrade to a 1-hour delivery time for a small fee.

But think: have you heard anything on micro shipping times since?

Turns out that free and fast shipping is extremely important to the end customer experience for fulfillment, but it’s not everything. I recall testing out the local permutation of the Amazon 2-hour delivery in my home town (on a Sunday, of all things), and to my astonishment, my item actually did show up within 2 hours of my order. I recall being mildly impressed and a bit bewildered — and then I never used the service again.

Slice Intelligence logo

Turns out that, according to Slice Intelligence and this presentation they gave at IRCE in 2016, shipping speed and handling prices are very important but are not the end-all, be-all. The presentation profiles several companies in the pet supply vertical: Chewy had been able to increase their share of the pet food category through reducing shipping time and maintaining universal free shipping. PetsMart, by comparison, had slower shipping speed and has included fees for shipping and handling for the same time period, and has predictably only maintained a small market share. But in Slice’s research, they discovered an interesting phenomenon: when Wag.com consistently maintained quick shipping and low to free shipping costs, their market share slipped — considerably.

A few illuminating conclusions came from this study. First and foremost, consumer expectations on speed and associated fees in delivery/fulfillment are high. But interestingly, fast+free shipping is not an automatic recipe for success. This information, coupled with the Amazon 2-hour delivery experiment, means that there exists a ‘happy middle ground’ of delivery elements: free (or free over a certain threshold) and fast delivery to the tune of 1 to 2 days is a good combination for success, but meeting lofty customer expectations does not — and has not — stopped there.

Specialized & tailored solutions – not one-size-fits all

Since Slice’s 2016 presentation, click-to-ship and click-to-delivery fulfillment strategies have continued to evolve to match consumer expectations. Fulfillment providers have more than kept pace with many adapting to match the complex and niche needs of the businesses they serve.

There’s also been a parallel evolution of industries supplying the omnichannel industry. Between fulfillment suppliers like Red Stag Fulfillment and data integration experts like VL OMNI, the steady rise of specialist companies exposes a reinvigorated line of thinking and strategy. Businesses are choosing partner suppliers who specialize in one core function, and who, as a result, do that one thing really, really well. Check out Jim Collins’ “Hedgehog Concept

We’ve already established that there’s a sweet-spot between speed and cost of shipping, but cutting-edge omnichannel retailers are taking it a step further. In ensuring that products are matched with the most efficient and effective fulfillment provider, Red Stag Fulfillment has boomed. Focusing on heavier, larger items (like pet food), RSF has tailored their operations and warehouse configuration to fit. Focusing on click-to-ship for heavier, larger items, Red Stag Fulfillment’s aisles are wides, their picking carts are larger, the infrastructure is matched to the products housed, and their physical warehouse locations are strategically placed.

All this results in not being able to serve every potential business out there, but rather focusing on a niche and providing exceptional service. This, in turn, makes for a better customer experience at the end of the day: choosing a specialist fulfillment partner like RSF means that they’re equipped to handle the click-to-ship portion for specialty products like heavy or large items, meaning they can get that item out the door and into the hands of your customer that much quicker. It all comes down to picking the right strategy to fill the complex needs and demands of your unique customer base, and going with the canned solution your nearest competitor is using is clearly not enough to set you apart from the crowd. Fulfillment providers, not dissimilar from integration providers, are long-term partners in your business’ success. Choose the right mix that allows your business to reach new heights, and preferably those partners that give your business a strategic advantage today and tomorrow.



Accelerate growth with VL OMNI. VL provides agile and scalable SaaS data integration to scaling upper SMB and enterprise-level omnichannel business across a number of sectors, including omnichannel retail. Over 200 businesses trust VL OMNI, an agile point to multi-channel integration middleware platform, to move data seamlessly through their infrastructure as they grow, expand and accelerate their business. Accelerate growth with VL OMNI: Your trusted integration platform for real-time accurate customer order data, shipment details, inventory, and prices. Learn more about VL OMNI at www.VLOMNI.com, or start a conversation today by clicking here.

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