What is Order Fulfillment?
Order fulfillment is the process by which a company delivers its products to buyers as orders are received, processed, fulfilled and delivered. Order fulfillment, at its most basic level, is simply ensuring buyers receive what they purchased in order to close a transaction. Some order fulfillment networks exclusively focus on B2C fulfillment for primarily ecommerce orders that require small parcel deliveries direct-to-consumers. Others focus on B2B fulfillment where goods are shipped to retail stores or retailer fulfillment centers . A true omnichannel fulfillment network does both.
Order fulfillment process is a fundamental element of any online or brick-and-mortar retail business. Although it sounds simple enough to do it all on your own, the challenges that come with it can be a distraction that pulls time away from other important components of your business. What’s more, today’s modern order fulfillment landscape is complex, dynamic and fast-moving! In fact, Shopify’s research shows that 53% of retailers say delivery and fulfillment logistics pose a ‘significant’ challenge. That’s why we’ve put together this all-you-need-to-know-guide about order fulfillment below.
Market Trends in Order Fulfillment
There are a multitude of ever-evolving trends happening in the order fulfillment center. The biggest ones TAGG is experiencing through our order fulfillment operations with hundreds of companies include:
Trend #1: Direct-to-Consumer Delivery
Direct-to-Consumer delivery & ecommerce order fulfillment make up the fastest growing segments of the order fulfillment market. Order fulfillment trends found in TheHustle.com, state the D2C outsourcing market could reach ~156 Billion by 2023. Century old brands like Nestle, who had almost no D2C presence 10 years ago, today estimate that D2C now makes up ~10% of sales.
Trend #2: Emergence of Omnichannel Order Fulfillment Networks
As many companies grow, they need a true omnichannel fulfillment solution that allows them to ship their products in different formats, sku combinations, quantities and more through multiple channels that produce orders. Examples of channels that produce orders could be the company’s website, third-party e-tail sites, retail stores, and more. According to a study conducted by McKinsey and the Retail Industry Leaders Association (RILA), 2/3 of survey respondents cited the growth of omnichannel and digital shopping as the industry’s most significant trend—and greatest challenge. As well, 100% of top-quartile retailers cited omnichannel personalization as a top 5 priority, but only 15% of retailers have fully implemented it across all channels.
Trend #3: Scaling for Growth
For rapidly growing companies, getting the scale they need in their fulfillment operations to handle an ever-widening array of products and distribution points is key.
Trend #4: Demand Volatility
Everything is easy if it’s predictable, right? But today’s consumer marketplace is everything but that! Consumer demand changes on a dime and something as seemingly harmless as an influencer social post can wreak havoc on your order fulfillment volumes. TheHustle.com cites that social commerce is growing rapidly, with 60% of social media users purchasing on a social network.
Healthcare Order Fulfillment
The healthcare order fulfillment center is filled with many different types of products, with a wide range of distribution and fulfillment requirements. For example, skin care product fulfillment, weight loss supplement shipping, and omnichannel fulfillment for nutraceuticals, speed and special handling win over today’s consumers.
Here’s the latest e-commerce order fulfillment data:
- Nutraceuticals are a $71.73 billion dollar market in the US
- Skin care products are a $20 billion dollar market in the US
- Weight loss supplements are a $2.8 billion dollar market in the US
Manufacturers have grown through leveraging 3PL order fulfillment strategies in these markets have found ways to appeal to healthcare consumers’ desires for fast, easy results, authenticity and transparency. These attributes extend beyond the products they’re buying to the entire process of ordering, receiving them and opening them.
How TAO Clean manages Order Fulfillment
TAO Clean, founded in 2015, is an example of a strong, fast-growing consumer brand with a successful order fulfillment model. The company centers on a lifestyle concept; one that values cleanliness in mind, body, and spirit. TAO Clean’s products focus on joining form and function—designing elegant personal care products like sonic toothbrushes and facial brushes that are practical, innovative, and beautifully designed.
TAO Clean strives to deliver a fantastic user experience—and holds itself to exceptionally high standards for not only cleanliness, but also precision and performance. That’s why they chose TAGG Logistics as their order fulfillment partner. TAO Clean had a history of outsourcing logistics, but TAGG brought a new level of capability.
TAO Clean’s CEO, Ryan Mongan says, “Until we found TAGG Logistics, no one could meet our highly variable volume requirements, drop shipping demands, or special-order complexities. What’s more, they made a smooth operational transition during the uncertain and highly dynamic onset of a global pandemic. If they can partner with us through a storm like that, the future looks very bright.”
Top 10 Tips for finding an Order Fulfillment Partner
Top 10 best strategies for choosing the right order fulfillment partner:
- Flexibility — to sell your products any way you can
- Technology leadership
- Save money — lots of it!
- Service is paramount
- Do it right the first time
- Simple, understandable billing structure
- Focus and expertise in your industry and product types
- Project work is inevitable
- Location, location, location
- True partnership
Automation & Robotics in your Order Fulfillment Operation
Automation and robotics play an increasingly important role, bringing efficiency and productivity improvements to order fulfillment centers at a rapid pace. Fierce competition and consumer demand for ever-faster response times makes keeping up with the latest technology in the areas of robotics and automation more important than ever. It has become critical for direct-to-consumer (DTC) shipping to have the right automation technology in place. TAGG Logistics has invested in the latest DTC order fulfillment technology from 6 River Systems (6RS), autonomous pick carts that use artificial intelligence and machine learning to increase speed, accuracy, and efficiency.
TAGG has introduced self-navigating mobile robotic pick carts at our Reno, Nevada order fulfillment center, replacing manual pick carts with robotic ones. The project has been so successful, that we’ve replicated it at our Dallas, Texas fulfillment center and St. Louis, Missouri fulfillment center — and we’re rolling it out in order fulfillment operations nationwide.
Our clients reap the benefits of TAGG’s investment in cutting-edge technology. We’ve seen benefits across the board.
Managing through Peak Season Order Fulfillment
Did you know that during the 2020 holiday season, at the height of the global pandemic, more than a million gifts ordered online were not delivered on time, according to CBSNews.com? The causes were unprecedented, including a boom in ecommerce order fulfillment demand, a tight labor market and a shortage of transportation capacity.
Outsource your fulfillment and warehouse needs for a successful peak season. You need look no further than TAGG’s Peak Prep program. TAGG Peak Prep is a volume forecasting and resource allocation strategy built to keep client orders flowing in a timely manner during the peak holiday season. Collaborating closely with our clients, TAGG has developed forecasting models to ensure we are positioned to manage the anticipated surge in holiday sales volume. We develop these models by first studying historical peak volume by TAGG order fulfillment center, individual TAGG client and shipping services. Then, we share these data analytics with clients to gain their insights and make any adjustments to 2021 planning.
Lowering transportation costs for Order Fulfillment
Lower your transportation costs for order fulfillment by partnering with TAGG Logistics.
Here are the four strategies:
- Reverse the rising cost trend for order fulfillment and transportation by:
- reducing chargebacks
- reviewing multiple rate options
- consolidating shipments
- Improve reliability with your order fulfillment partner and their transportation carrier partners
- Drive greater visibility in order fulfillment and transportation shipments
- Manage transportation smarter with TAGG as your order fulfillment partner
Flash Sales Order Fulfillment
A flash sale is an e-commerce business model in which a website offers a specific number of products for sale for a limited time only, typically at a highly discounted price. These sales are most often promoted over TV networks as well as via email, over social channels and from companies’ websites. The flash sale market is rapidly growing with more and more people turning to them for a range of products. In fact, while flash sales have easily been around since the early 2000’s, they have become more popular with consumers than ever. On Cyber Monday last year, consumers spent $9.4 billion over a 24-hour period—a 19.7% year-over-year increase.
Flash sale ecommerce order fulfillment sites must move a wide variety of items to a vast amount of people in the shortest amount of time possible. That’s one reason that specialists in flash sales order fulfillment are rare. What does it take to fulfill 5,000 to 60,000 orders within a few days—performing flawlessly on deliveries across the U.S.? For most flash sellers, it takes a third-party fulfillment partner with the rare combination of experience, people, facilities and equipment to pull it off. That’s where TAGG Logistics comes in.
Subscription Box Order Fulfillment
There’s a subscription box for everything these days! From cosmetics to clothes, and from techies to foodies, you can find a subscription box for anything and anyone. TAGG delivers ‘‘Retail therapy in a box’ to meet all of your subscription box fulfillment needs.
For businesses who are looking to add or expand their subscription bundles, these order fulfillment challenges can snowball faster than you might think:
- Boxes can come in many combinations depending on the customer’s order or preferences
- The right products have to be in stock at the right time
- The order must be kitted correctly and attractively
- It all has to happen fast.
As a business owner, you should be focusing on growing your customer base, not on haggling with these problems. That’s why TAGG has perfected its expertise in subscription box order fulfillment for our customers. We take our proven approach to fulfillment and customize it to your needs. If you have an idea about branding or the unboxing experience, we can make it a reality, all with a seamless, streamlined, and frustration-free process. You focus on building your business, and we handle the logistics.
Fulfillment Centers Nationwide
Finding the ideal ecommerce order fulfillment center location can be difficult, especially if your 3PL does not have a nationwide network that gives you the flexibility and local consumer reach you need. At TAGG Logistics, we specialize in Order Fulfillment Centers to help with Amazon shipping and Ecommerce shipping from 23+ fulfillment center locations nationwide.
At TAGG, we understand that your fulfillment network is dynamic and constantly changing. Whether your needs are local, regional, or you require a nationwide network of fulfillment center locations, we provide the access and expertise you need for same day, next day or two-day shipping.
Find the perfect location ideally suited to reach your ecommerce customers faster when you work with TAGG!