Online shopping is booming. Last year, shoppers spent£7.7 billion doing their Christmas shopping on the net. This year, IMRG anticipates the figures will be even more impressive, reaching as much as£10.5 billion.
However, to make the most of the seasonal online boom, retailers are reliant not only on the smooth running of their web site, but also, at an even more fundamental level, on getting the orders right in the first place. For e-retailers, fulfilment – in other words, the picking, packing and distribution of an order – is vital to customer satisfaction. Get an order wrong and miss the window for delivery, especially around peak times such as Christmas, and you risk losing trust and future custom.
Asos chief executive Nick Robertson says good fulfilment is vital to his business. “We devote a lot of time and energy into getting it right. Having a good product isn’t enough; it’s dependant on a perfect delivery platform,” he says.
For some smaller retailers, online fulfilment is simply handled by the same staff in the same warehouse, but this isn’t necessarily the best way of working – mistakes when picking goods for store replenishment are a pain, but not as catastrophic as getting an order wrong for an internet customer. Other retailers choose to outsource their despatch operations to e-fulfilment specialists. With their expertise in the market, such operators pledge to deliver a more efficient, more cost-effective service.
Mark Hewitt is chief executive officer of iForce, which handles e-fulfilment for John Lewis Direct and Boots.com. He says retailers cannot afford to make mistakes. “As a percentage of sales, online retail may be small, but the impact is the most direct you can have,” he says.
The first step in ensuring customer satisfaction is for the web site to be operating from accurate stock records. Paul Brooks is sales director of Unipart Consumer Logistics, which takes charge of online fulfilment for the likes of Homebase, Halfords and Asos. He says retailers, or their e-fulfilment partners, must ensure that stock really is available. “Online it might say it’s available, but where is it available? Is it available to pick and ship to the customer in the lead time you are promising?” he asks.
“For us, the whole process starts with stock integrity,” says Hewitt. “We do a full stock check when the retailer ships to us and constant updates to ensure availability. When an order comes in, our system verifies the stock is in place and then soft allocates the stock to that order,” he explains. Availability is updated every five minutes.
Orders are picked by warehouse staff who carry either a PDA or a paper copy of the order against which they can check off goods.
Voice picking – widely used in warehouse environments for store replenishment – isn’t as cost-effective for the smaller, individual picking required for internet orders. However, some are starting to introduce it. Zendor, which handles e-fulfilment for Early Learning Centre and River Island, has tested the technology and is going through the tendering process for a supplier. It will be using voice picking in its warehouses for the first time this Christmas.
Zendor chief executive Nick Allen says the system helps to ensure near-100 per cent order accuracy because it asks the user for check codes to ensure the picker is in the right location and that they have selected the right item. It will also not allow them to proceed to picking the next item until the previous one has been confirmed. “It’s relying on technology to cut out human error,” explains Allen. As well as being more efficient, staff can also be trained within three or four days rather than the two weeks needed for training by the traditional route, he says.
However, if warehouse staff do not have the customer-facing experience of their store-based colleagues, it can be a potential minefield. Without the buzz of interaction with customers, picking orders can be a mundane process, meaning that mistakes occur – and this can be a particular problem if the company is using temporary staff at peak periods. The seasonal rush can see numbers swell dramatically: in one warehouse that normally has 40 permanent staff, there are about 290 at Christmas. “We plan our schedules in July by looking at our clients’ sales projections,” says Allen. “And we recruit early to get to the front of the queue and get better quality staff.” Once assessed for their suitability, they are trained and put into teams with permanent members of staff assigned to support them.
Brooks says his company tries to ensure its warehouse staff are as in tune with the retailer and the retailer’s customer base as they can be. “We assemble everyone – whether they’re permanent, agency or temporary staff – for 10 minutes at the start of each shift to get them engaged,” he explains. In addition, image boards for each client are displayed in the warehouse so that staff understand what the brand is trying to portray.
Hewitt says it helps that, for large retail clients, such as Boots and John Lewis, e-fulfilment operates out of individual warehouses for each brand, meaning that warehouse staff feel part of the retailer’s staff. “Many of the brands we work with are blue chip, so all our permanent staff take great pride in what they do. We collaborate closely with our retailers and form really strong partnerships,” he says. Ensuring temporary staff are up to the job, too, is vital. “It’s all about manager motivation,” he says. Allen agrees and says productivity contests can help boost morale and build team loyalty.
While fulfilment specialists’ business relies on orders being shipped accurately, contingency plans – to cope with higher-than-expected levels of demand, for example – must also be in place. But mistakes can still happen. “You really shouldn’t lose anything between collection and delivery, but in a UK plc, you’d expect a 1 per cent to 2 per cent failure rate at each of those stages,” says Brooks. “This could mean that about 6 per cent of customers will not have their expectations met.”
Hewitt says his company shipped 2.5 million items in the six-week Christmas period last year – up 80 per cent on the previous year. He claims 99 per cent accuracy. “We have service-level agreements with our retailers, so we are contractually bound to deliver,” he explains.
The safeguards in place mean mistakes are rare, but they can happen. For this reason, retailers also have to ensure they, or their fulfilment provider, have sufficient customer service team personnel to cope. “If it goes wrong, you need to have policies and procedures in place to be able to keep the customer for next time,” says Allen. This is particularly true at Christmas, when reputations are even more at stake. “It’s not that the problem gets worse – it may still be just 0.5 per cent or 1 per cent – but it’s bigger because the number of orders is higher,” says Hewitt.
Brooks says a prompt, positive response by the internet customer service support team can save the day, even if orders have been shipped incorrectly or are incomplete. “If you can manage the query brilliantly, then you can still maintain 100 per cent customer satisfaction,” he says. “Some retailers, such as John Lewis, put a huge effort into the customer service experience to protect their brand,” says Brooks.
“It’s important to make sure that an online customer service team has enough support,” explains head of customer service at John Lewis Direct Vicky Lovell. “We have a dedicated after-sales team in place to ensure our customers get the right information first time.” Hewitt agrees: “People accept that mistakes happen – it’s how you deal with them that’s important.”
While customers may be forgiving, that isn’t an excuse for poor service if something goes wrong. “It’s about taking full responsibility and doing what you can to get the replacement item or missing product to the customer before they expect it,” Robertson says.
Get your e-fulfilment right and you are likely to meet the most important requirement of all – satisfying the customer.
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