Wednesday, March 16, 2016
How to improve logistics of an online shop?e-Commerce in Poland is quick to adapt upcoming trends in online sales from the Western Europe and the United States. Nonetheless, our family-owned e-businesses must still fend off many barriers which hinder further development of online shopping.
Among many challenges Polish online sellers are faced with are the ones related to relatively high fees for electronic payments, which has an impact on profitability, and problems with access to software tailored to specific businesses. Despite a wide range of IT solutions available for online shops, finding a decent interface for the warehouse or accounting system is still difficult. Application providers usually give access to API which is a ready-made “connector” of the shop’s website to which other applications should be linked. The configuration is left up to the shop itself which is not always possible or is performed in a way which ensures optimum cooperation of various systems. As a result, this reduces the margins and severely limits the freedom of online sales representatives to use customer bonuses like free shipment and return, individual and safe packaging, freebies or loyalty campaigns. On the other hand, the infrastructure does not allow to popularise “same day delivery” services or shipment on the ordering day, e.g. until 5.00 p.m.
But it is the logistics that presents the biggest challenge for online shop owners. Internet entrepreneurs encounter issues basically in every step of the logistics way.
Nearly every frequent online shopper has come across the purchase of non-existent goods. This situation might result from purposeful sales strategy (“I will offer you something reasonably priced to attract website traffic. Then, I will sell you something else and say the desired product just sold out.”). It might also be caused by the lack of systemic solutions (synchronisation of warehousing stocks with the shop’s website) or inadequate product storage conditions (the goods are physically at the warehouse but not suitable for sale). What is also more important: the flexibility of access to warehousing space and possibility to process seasonal turnover increases without the necessity to rent large-size warehouses on annual basis.
This part of the process might be very different depending on the size of the e-business. Small, one-person shops set their own procedures, work rhythm and internal standards. The larger the seller and the broader the range of products, the more complex the packaging of orders for shipment becomes. Someone who has a garage shop with tap seals knows the warehouse in and out (or keeps it written down in a copy book) to complete orders in a 15 square meter room. At the other extreme, there is a textile giant that has 15,000 SKUs on offer and has to use advanced software. It sorts out the orders to be picked by selected employees in given zones. This enables to prevent a situation in which a warehouse employee has to cross 600 m of warehouse and spend 15 minutes to pack three different products included in a PLN 50 order.
To satisfy the end user, you need to ensure the right delivery price as well as quality. In this regard, each online seller should take account of a few vital factors, including among others matching packaging to sold products or selecting the right carrier. Savings on packaging often end in increased number of returns due to damages, which are then swiftly rejected by courier companies according to regulations. When choosing a carrier it is worth to consider the characteristics of sold products and decide on a partner who is experienced in handling this type of goods. A good solution might be to use the service of two to three independent operators. This kind of configuration provides comfort when the quality or conditions of cooperation suddenly worsen with one of them.
Unfortunately, many domestic online businessmen do not realise the importance of Customer Service in keeping and developing a given enterprise. Professional consulting, assistance in selecting products, recommendations (both opinions, live-chat as well as availability of service via e-mail or phone) constitute elements which help the customer choose a product closest to expectations. As a result, not only the risk of return or withdrawal from purchase is reduced, but this also allows for building an image of a professional partner and increases chances when satisfied customers come back in the future. Post sales service is of equal importance – especially the way of processing complaints and returns. A positively and immediately handled complaint can bring more loyal customers than correct and flawless service of a standard order.
How to handle e-logistics?
Issues listed above are frequent for many large and small players on the domestic e-commerce market. In order to develop their business, online shops are more often faced with the necessity to invest in knowledge and state-of-the-art systemic and infrastructure solutions. In the case of lacking resources, e.g. funds for investing in warehousing systems or complex interfaces which combine various systems (website / payments / warehouse / picking system / courier system / accounting system / CRM system) – it is worth to consider cooperation with outsourcing companies which handle a part of or complete logistics process. These solutions are applied by a significant number of the largest players who succeed on the e-commerce market. While concentrating on the development of the business, they support know-how and infrastructure for experienced partners.
Krzysztof Wieczorek,e-Logistics Process Implementation Director at Cursor SA