Across the globe, e-commerce continues to grow. Consumer demands have changed from traditional patterns to ones that reflect the growth experienced in e-commerce transactions.
The question now is whether or not your warehouse can support the increased demand that e-commerce has brought to warehousing. E-commerce opens up a new area that expands the reach to a new customer base comparative to general business customers. The fact is that e-commerce customers are very different than business customers.
Non-business consumers order small but in higher volumes. The number of orders will increase, but the size of the order will downsize tremendously. Business consumers tended to order a bulk amount of one good, but now non-business consumers order many variable single products. This can cause warehouse structures to be rethought and redesigned to support the new trend in orders.
The rate at which orders come in will vary. Whereas, warehouses are accustomed to dealing with business orders that come at a predictable rate, consumers today order products at an unpredictable rate. For warehouses to be able to keep up with the rise and fall of orders coming into the warehouse, they will have to change their strategies and technologies.
If more goods are being ordered online, it is expected that more will be returned. Goods that are ordered online are 22% more likely to be returned, compared to the 10% of goods that are bought offline. Consumers change their mind after purchasing their order or they will choose to order several items, but know they will only be keeping one.
In the past, consumers have only exposed to big e-commerce retailer like Amazon. Their expectations are solely based on their interactions with places like Amazon. Consumers assume they will receive quick order fulfillment and low delivery costs, but smaller retailers cannot offer the same experience as global retailers. Previous technologies used for order fulfillment cannot keep up with the experience that today’s consumers demand.
So what can you do to make sure your warehouse is ready for the e-commerce demand? Here are the biggest issues that you will come in contact with during the influx of e-commerce orders.
- Think about adding a separate warehouse that only deals with e-commerce orders.
- Single-item orders will increase. How will your warehouse deal with this change in order type?
- Should you outsource the warehouse process, or keep it internal?
- Products will need to be replenished at a higher rate. How will you keep up with the demand?
Technologies are the best way for smaller companies to keep up with the increasing demand for orders. This change in warehousing will need to be in the conversation in the future to help companies stay in competition with global warehouses.