Third-Party Logistics (3PL) Ecommerce Fulfillment and Solutions Guide

3pl-ecommerce-fulfillment

Order fulfillment is one of the most integral aspects of any online storefront. As an ecommerce business manager, setting up an efficient and cost-effective fulfillment strategy is essential to scale your business and satisfy your customers. 

However, some ecommerce businesses must rely on additional shipping support from outside their internal resources to improve operations and improve ROI. One of the most prevalent solutions for enterprise businesses is to utilize third-party logistics (3PL). Let’s discuss how third-party logistics works and some of our top ecommerce fulfillment solutions. 

What is 3PL Fulfillment?

3PL (third-party logistics) fulfillment is when an ecommerce business uses an outsourced entity to handle retail operations, including receiving orders, inventory management, packing, shipping, and storing products. Some organizations leverage 4PL to free up additional bandwidth from their organization. 4PL allows enterprise ecommerce businesses to have another party handle coordinating with their outsourced shipping and end-to-end supply chain management. 

Why 3PL is Important?

3PL is important for many growing businesses because it helps alleviate time-consuming internal operations so companies can spend more time growing their business. The most appealing advantage of 3PL is that it not only frees up time but that it’s the most cost-effective solution to coordinate, store, and ship inventory to customers. 

How Do 3PL Companies Work? The Stages of Ecommerce 3PL Fulfillment

Every 3PL partnership is different, but third-party logistics primarily includes storage, shipping, packing, and fulfillment. A 3PL partner can consist of several different entities, including warehousing companies, distribution centers, or fulfillment services. 3PL partners can help lower shipping costs, improve shipping times, optimize logistics, manage returns, and provide better customer service. 

3PL partners are essential for many growing businesses to scale their business. Handling inventory management, storage, and shipping can drain a lot of a company’s internal resources, so an outside partner can free up significant bandwidth to save an organization’s time and money. Let’s break down the entire 3PL process from start to finish. 

Storage

A business first must coordinate sending their inventory to their 3PL provider so that they can have their products at their disposal. Typically, a company will fill out a Warehouse Receiving Order (WRO) to document the quantity and product names they plan to send. Once a business records its inventory and transmits it to 3PL partners, they will store the items at their fulfillment centers either on shelves, pallets, or bins. They will categorize and label inventory accordingly to have it ready for when customers place orders. 

Orders

When a customer places an order online, the 3PL will begin the fulfillment process. The most efficient 3PL ordering processes integrate the online store with the fulfillment center. As soon as a customer places an order on the company’s website, the 3PL party is notified and sent the necessary information to complete the order. A warehouse packing team member will collect the order from storage and send it to the packing and shipping division. 

Packing and Shipping

The warehouse team will begin to package the item. Businesses can specify how to package their products based on costs and weight. They can also customize the packaging material to highlight the brand. The 3PL will place a shipping label on the product and have their daily inventory ready for carrier pickup. 3PL partners will send an order and shipping confirmation to their partners, and the 3PL can handle any possible returns. (PS: You can help reduce ecommerce return rates with our helpful guide.) 

6 Best Ecommerce Fulfillment Solutions

There are many reasons why businesses choose to leverage a 3PL partner. Whether it’s handling the fulfillment, storage, or supply chain management, a 3PL can be the MVP for your ecommerce business. Here are some reasons why you and your business could benefit from third-party logistics:

1. Time

You probably didn’t get into fashion retailing to spend hours packing orders. Working with a 3PL gives you the time you need to focus on your big-picture business strategies. There are countless tiny details involved in order fulfillment. Contracts with transportation drivers, tracking lost orders, figuring out how a storm on the East Coast may affect deliveries to the region—these are the kinds of small but important details you no longer have to worry about with a 3PL in place.

2. Money

When an outsourced provider handles your order fulfillment process, that can cut down on expenses. For instance, a 3PL with a warehouse means you don’t have to spend money on your own storage facility for excess inventory. You also don’t have to hire and pay extra staff members to handle fulfillment on your end. Plus, if you work with a 3PL with multiple other clients, it can often translate to lower shipping rates for everyone because the 3PL is shipping at high volume.

3. Convenience

Using 3PL is a terrific e-commerce business solution because it can handle every aspect of order fulfillment. Your vendors can ship merchandise directly to the 3PL warehouse, where it can be synced to your in-store inventory to keep everything organized for you. When orders come in, the 3PL handles all of the packing, labeling, and shipping. If an order is returned, the 3PL takes care of restocking. An experienced company that professionally and reliably administers all these logistics can be a game-changer for your business.

4. Customization

A 3PL can cover every aspect of order fulfillment for you. But 3PLs can also offer customized solutions tailored to your specific needs. Are you focused on adding next-day or same-day shipping to your e-commerce site? Find a 3PL with those capabilities and the warehouse network to support that. Do you want to provide gift-wrapping services or need temperature-controlled packaging? There are 3PLs out there that can handle every kind of fulfillment issue. The best firms will listen to your needs and develop a comprehensive plan to optimize your order fulfillment.

5. Flexibility

A 3PL boosts your company’s responsiveness to e-commerce demands. Suppose you’re planning a huge holiday sale, for instance. In that case, your 3PL company can adjust accordingly and make sure it has enough transportation solutions and fulfillment staffers in place to meet that higher order volume. Conversely, you don’t have to let go of your workers if there is a lull in orders; the 3PL can quickly ramp down, depending on your needs. 

This scalability is especially valuable if you are at a crucial stage of growing your e-commerce business. There are few things worse than not being able to meet increased customer demand—it can tarnish your brand’s reputation. Plus, taking advantage of a 3PL’s warehouse means you may be able to carry a higher volume of inventory, so you can save money by buying merchandise in bulk and serve more customers with more orders, which can benefit your bottom line.

6. Quality Assurance

By doing your homework and partnering with a trusted 3PL company, you are leaving order fulfillment in the professionals’ hands. These intricate, heavily detailed logistics are their bread and butter, and you can be assured that your fulfillment process is in the best possible position to benefit your e-commerce business. A well-oiled fulfillment process reflects well on your business and enhances customer satisfaction and your brand’s reputation.

Let Us Take Care of Your Coordinating Your 3PL Operations

The decision to work with a 3PL can be a wise one, but only if you use a company focused on meeting your ecommerce needs and can provide you with quality service and practical solutions. We’ll help you improve your entire business operations so you can not only meet but exceed your ecommerce KPI goals. 

Connect with us and learn more about our global logistics solutions to optimize all of your ecommerce operational needs. Schedule a quick time to chat with us below, and we can discuss the best solutions for your business. 

In the meantime, learn more about how to improve your ecommerce business using our informative guides:

Coronavirus and the Future of Ecommerce

Future of ecommerce

It’s no secret that the world is facing a severe global health crisis thanks to the coronavirus (COVID-19) outbreak. It has not only become a public health pandemic, but it’s also having a critical impact on global supply chains, and markets worldwide have been on a rollercoaster as a result of what economic impact it may have.

As the coronavirus continues to gain traction in the U.S., there have already been considerable consumer behavior changes. Self and mandatory quarantines, along with emerging consumer worry about public places, will provide opportunities for ecommerce businesses to thrive over the next few months and potentially permanently.

As consumers turn to digital options to avoid physical shopping environments, the behavior change may impact longer-term habits. For instance, we are all keenly aware of the modern shift in holiday shopping behavior when ecommerce sales rise sharply compared to the rest of the calendar year. Therefore, it is highly likely that we will see similar shopping patterns possibly lead to a “step-change,” one in which consumers will not return to previous behaviors.

Let’s discuss what a post-pandemic ecommerce shopping environment will look like and the best ways to revise your business model for success.

How Covid-19 Affected Consumer Shopping Habits

Due to quarantines, ecommerce sales in specific categories like consumer product goods, grocery, and staple items, have already seen marked increases, and Amazon Prime has already noted significant increases in membership along with sales within these categories. Grocery delivery is also seeing a boost. In Target’s recent investor call, the company discussed new ways for people to shop with pick-up, drive-up, and delivery to cater to their new customer habits. All of which could potentially be the foundation for the ecommerce step-change that the internet promised 20 years ago.

Studies show that consumer behavior is influenced by environmental, economic, and sociological factors, all three of which are evident with the current COVID-19 crisis.

According to data analysis from Quantum Metric, coronavirus is driving U.S. consumers online. Ecommerce retailers based in the U.S. experienced a 52% growth rate in online spending during the fifth to eighth weeks of 2020 (the period when the virus began rapidly spreading outside of Asia) compared to the same weeks of 2019. According to Quantum Metric, consumers may have increased their online shopping because their local stores have run out of stock due to delayed shipments, stockpile items, avoid busy public places, or take advantage of direct shipping options bulk purchases. Once consumers have become familiar and comfortable in the ecommerce space, they are likely to continue to make future purchases in this same manner.

Tamara Gaffney, VP of strategy for Quantum Metric, posted to her blog, “Without a doubt, the digital retail experiences customers have been having these past few weeks, good or bad, will have a lasting impact on (retailers’) ability to build much-needed loyalty into their consumer-base.”

Consumer habits are hard to change, but when events such as this happen on such a large scale, it forces the market to change. This is a change that consumer marketing has been preparing for since the birth of the internet. Still, it may have just taken a cataclysmic event to unleash the true latent potential of ecommerce, and it would seem the restraints may have been broken forever by Covid-19.

Fortune favors the Bold for Retail-Rebuilding Post COVID-19

Coronavirus Shopping Trends

The longer Covid-19 persists, the faster online sales are being driven online permanently, thus cementing the long-awaited ‘ecommerce revolution’ once and for all.

The ongoing pandemic has swiftly brought on unprecedented social and economic change on a global scale. Many business sectors, including travel, hospitality, and nonessential retail, came to a screeching halt throughout March and April. While still, other industries have seen unprecedented demand. Consumer packaged goods, food and beverage delivery, educational software, health and wellness, and video conferencing software have increased 10-fold.

However, many categories are still in flux. Take fashion as an example. Those brands that sell heavily in wholesale and retail channels have been a transformative experience, leaving many in crisis. Other brands heavily focused on ecommerce and direct-to-consumer have seen expectantly strong results. The reality is that most of these brands have some mix of retail and online sales.

COVID-19 Ecommerce Statistics

A closer analysis of marketing and ecommerce sales across 24 brands shows precise results:

  • Brands that have restricted their marketing spend (greater than 40%), whether out of caution or necessity for cost-cutting in the face of the loss of sales, are seeing their online DTC sales struggle (-40% vs. the same period a year ago).
  • Those who maintained their marketing spend have seen online sales weather the storm after the initial dip in sales seen at the crisis’s onset.
  • Those that aggressively pushed forward with marketing and promotions are seeing unprecedented year-over-year sales growth.

Faced with precipitously falling sales the first two weeks of March, many brands had no choice but to cut their ad spend by about 50 percent, according to analytics firm MediaRadar. But not all brands took this approach. Those in categories like streaming, virtual conferencing, and food delivery took an aggressive approach, as expected. But a few retailers such as Muck Brands and Karen Kane have doubled down on direct-to-consumer. 

With the assistance of Nogin, both brands have come out swinging. They leaned heavily into promotions relying on A.I. consumer profiles driven by the Nogin ecommerce platform. In doing so, Muck US has seen over 120% growth, well ahead of projections for 2020, while Karen Kane has been booming at 160%. Relying on the enterprise ecommerce solutions, both marginally increased marketing to get their message out, first to customers and eventually to prospects based on overwhelming response. Both brands have found a silver lining in this challenging environment.

Many might be surprised by this outcome, but they really shouldn’t be after looking at the data. According to a study in The Economist, consumer discretionary spending is down by more than 50%. However, consumers are still shopping online; the inability to spend on things like travel, restaurants, and childcare and reduced costs for things like necessary transportation mean that there is still strong discretionary spending on ecommerce beyond essential goods. Throw in the fantastic discounts being offered all over the place, and it makes sense why, outside of a dip in mid-March, overall, nonessential ecommerce has fared well.

Adjusting Your Ecommerce Shopping Strategy

Depending on the chosen strategy, individual brands are seeing wildly different outcomes. While overhead for brick and mortar, such as rent and payroll for sales associates, is the cost of doing business in the retail world, digital advertising on Instagram, AdWords, and Facebook (among others) is the price of doing business online. While brands that have pulled back on marketing may conclude that online demand is soft, it is hardly the case. The brands that are fighting for it are taking the share of wallet.

Brands with both large retail and wholesale presence face difficult choices. They know cutting back on marketing will harm the bottom line. Many brands are opting to save their resources for a few months awaiting for stores to reopen. Although this seems to be a logical move facing a significant sales channel’s closure, people’s timeline to return to retail shopping is very much still in limbo. 

As states and retail commerce begin to open back up, consumer fears may still slow the return of retail. The longer consumers remain hesitant to return to brick and mortar establishments, the more likely it is we will finally realize the commerce capabilities the internet has promised since the first “.com” boom of the 1990s.

Despite toilet paper hoarding and panic buying, many consumers are trying online purchases for the first time; others increase online purchases because it is the only option. Either way, through the sentinel event effect, simple psychology tells us that many of these short-term consumer behaviors will lead to a permanent shift. And although some of this behavior will stick, and with states gradually re-opening retail, the presumption is that a return to normalcy is just around the corner. 

Everyday sociology, however, tells us that although retail stores will open, the expected rush of customers in June might never come. As we have already seen in states like Georgia, stores could likely re-open to a flood of week-one returns and very lukewarm subsequent traffic. It may take a long time or even a vaccine before consumers fully return, if they do at all, to some semblance of their pre-pandemic shopping behavior.

In the face of such uncertainty, decision-making can be strategically challenging. Moreover, rushing blindly into the digital world is not the right move for any brand. But taking the time to hone your messaging and getting your ducks in a row to define your re-opening promotional strategy is crucial. This is your opportunity to define your strategy with the specific goal of building your online sales channel.

Right now, you have the opportunity to redefine your brand. Take this opportunity to design market tests that validate your online marketing efforts. Begin to develop testing strategies to weigh your promotional successes, however incremental they may be. Dive in to rebuild your ideal customer profile and scale into new markets, and “always be testing.” 

Hone in on what messaging strategies, based on observable data, can effectively drive online purchasing behavior. Utilize this time to determine your cost of acquisition effectively, and figure out what makes sense for your business to spend. Transform your brand digitally to meet your target audience. The longer you wait for normalcy to return, the more likely you will be to wake up six months from now with multiple under-performing sales channels.

Retail Shopping Trends Post Pandemic

Tens of thousands of retailers have closed their doors to help stop the spread of the coronavirus across the country, either by choice or through government mandate, and according to industry experts, they may not be rushing to revert to the old days of retail anytime soon.

On its face, things do not look well for retailers. The widening pandemic could permanently shutter more than 15,000 stores across the U.S. While some stores begin to re-open in accordance with eased limitations in some states, nonessential retail largely remains closed for the foreseeable future. Moreover, more than two-thirds of America remain on stay-at-home orders.

E-commerce has seen a noticeable uptick. However, analysts are skeptical that it will make up for sales lost due to store closures. In an interview with Retail Dive, Doug Stephens said that luxury brands that hadn’t yet fully embraced ecommerce would be one of the biggest-hit sectors and that fear of viral contagion could also hurt the resale market.

The re-opening of retail couldn’t come sooner. 

According to Retail Dive, department stores only have about five to eight months of liquidity before a cash crunch becomes a risk factor. Companies such as J.C. Penney, Macy’s, and Kohl’s have reported only about 5-8 months of available cash, while analysts have pegged Nordstrom to have about a full year. Therefore, with physical locations likely to remain shuttered for a while longer, the pandemic has many retailers in a tough spot.

But that’s only the half of it. Just because stores are being given the green light to re-open in many places, consumers seem to be less than eager to return to traditional physical shopping. Surveys show that consumers continue to have lingering fears of infection, with two-thirds of respondents telling the Washington Post they wouldn’t feel safe going into a retail clothing store. 

Moreover, a survey from Fluent found that only 34% of respondents were even comfortable with governors lifting stay-at-home restrictions. Ethan Rose, EVP at Nogin, was previously interviewed as saying, “the longer this pandemic lasts, the more fear and uncertainty will necessitate an evolution in the consumer processes.”

Bob sat down with the executive staff of Nogin this week to get their insights as to what the future of retail holds when things attempt to “return to normal”

Here are some of their most insightful thoughts on the issue:

We Won’t Return to Any Sort of Normal Without a Vaccine

Jan Nugent, CEO at Nogin: As we know, sheltering in place was meant to slow the virus, not cure it. And as we move back to somewhat normal life, there has to be an understanding that, in essence, nothing has changed. Without a vaccine, businesses cannot guarantee the safety of their employees, vendors, and customers; but some precautions, like facemasks and daily testing, can be made to limit exposure. 

But as simple as that sounds, this is an unprecedented time (unless you were alive in 1918). However we proceed, it must be with caution. Facemasks and wide-spread daily testing will be the norm. Distancing availability, fewer people per space, and hospitals will have to be equipped to handle the increased caseload.

Understanding Your Customers’ Needs

Rikke Alderson, Chief Growth Officer: Now more than ever, truly understanding your customers’ needs will be paramount to current and ongoing success for businesses.

Brands need to understand that most society is now working in a completely different environment from just a few months ago. 

In that time, shopping patterns have drastically evolved, necessitating a shift in strategy by virtually everyone. For example, shopping habits seem to have shifted regarding the traditional role of seasons. We are already seeing up-tics in footwear, loungewear, athleisure, and negative flows within formal wear or cocktail fancy attire, which are relatively abnormal buying patterns for this time of year.

As such, the opportunity to leverage search engine query volumes correlative to fashion and apparel will be super edifying around what consumers are looking to purchase today versus last year at the same time. Moreover, once stores begin to reopen, with the initial phase of curbside pick-up versus browsing and the like, we expect stores to see greater clarity from the consumer on what they are looking for versus opportunistic buying.

Public Safety Comes First

Kurt Lohse, SVP: Nonessential stores should only reopen after the Coronavirus transmission rates have dropped to federal, state, and local safety regulation levels and when it is safe for workers and customers to interact. Active measures should be taken to provide 6′ distances during work hours, and protective masks and gloves should be required until an effective vaccine is made available. 

Retailers and shoppers alike may adopt protective gear for some time. The three most significant changes I see relate to additional space becoming a requirement to maintain 6′ distance guidelines, limited in-store customer volume control, and added extra cleaning measures to be taken regularly to ensure virus-free surface transmissions.

Companies Should Focus on Their Operations and Digital Footprints

Henry Henderson, Logistics & Supply Chain Executive: Due to the struggles keeping up with demand amidst consumers’ anxiety and protecting front-line sales associates, it’s impossible to pin down a date when things may even resemble returning to normal in the retail world. So until we have a definitive answer as to when people will be back in stores, brands and companies should be focusing their operations and go-to-market strategies around digital fulfillment.

In the absence of in-person experiences, consumers focus on the essentials, and the transition to digital fulfillment has been swift. This crisis has highlighted the absolute need for last-mile connectivity, apart from reimagining traditional single-carrier dependency models and centralized warehousing. In effect, this translates to creating micro-fulfillment centers leveraging the omnichannel capabilities of the store. If nothing else, we see the importance of agility and connectivity being the fundamentals your brand will need in the new normal.

Leave It to the Scientists

Geoff VanHaeren, CTO: As we are already seeing, the opening is being done on a state-by-state basis, as data presents itself. This is key; all decisions surrounding states’ opening needs to be based upon science and empirical data. Of course, people are getting stir-crazy and can make their own decisions, but this needs to be handled from a top-down approach.

Consumer feelings can not be what directs the opening of society. I don’t have experience with infectious diseases, so I am not qualified to respond to “when” questions. What I do know is that the virus doesn’t care about people’s feelings. I will leave those decisions to scientists.

Evolution of Ecommerce: Trends, Innovation, and What the Future Holds

evolution-of-ecommerce

The world has changed quite drastically over the first half of 2020. The ongoing pandemic has forever altered the way people work, live, and shop. The ecommerce revolution that was once promised with the dot-com boom of the 90s seems to have finally come to fruition.

People are shopping online more than ever before, and ecommerce is growing and evolving in real-time. Large or small, the digital landscape has forced retailers to overhaul their entire operations and move towards omnichannel software solutions. Large retailers are building their platforms and whole teams of web developers to make the shift, while smaller brands find themselves hamstrung by the development costs and operational shifts necessary to make the change.

So, where does ecommerce go from here?

Every day more and more platforms are popping up to accommodate the need for ecommerce. For every entry point software like Shopify, three new companies pop up. Even Salesforce has moved quickly into the space with its CommerceCloud suite. So how do these platforms compare? How do they distinguish themselves from one another? We know that nothing is certain. This revolution started 30 years ago, and the coronavirus pandemic has exponentially sped up the process.  

However, when looking at the last 30 years, it becomes pretty clear where these trends are taking us. Moreover, by analyzing those trends and insights, we can better understand where online retail goes from here. Let’s discuss how ecommerce has transformed business in our country and the latest trends that will guide the future of commerce. 

How Has Ecommerce Changed the American Economy?

ecommerce-trends-statistics

There are between 12-24 million ecommerce sites across the world, and new merchants continue to enter the marketplace to capitalize on consumer shifts to online retail. In 2020, the new coronavirus ecommerce landscape launched online shopping into the stratosphere. Online shopping accounted for 21.3% of total retail sales in 2020 alone, compared to 15.8% in 2019. Additionally, consumers spent $861.12 billion online with U.S. merchants in 2020, a 44% increase from the $598.02 billion spent in 2019. 

Ecommerce is the fastest growing sector in the United States marketplace. Businesses can run more efficient and cost-effective operations using online storefronts by leveraging 3pl ecommerce fulfillment and ecommerce conversion funnels. Also, online retailers have access to a bounty of informative analytics to help them understand their target audience and refine their marketing strategies. They can establish ecommerce KPIs and effectively assess their results month-over-month to improve their operations. 

Why is Digital Commerce Important?

Digital commerce is becoming more important for businesses since customers continue to shift their time, attention, and money towards online mediums. It will be tough for a company to survive if they have little online presence and can only rely on foot track for transactions. 

Consumers rely on digital content, such as written descriptions, images, and videos, to learn more about the products and services they want to buy. No longer can a shopper ask retail employees for recommendations or physically touch a product before checking out. 

Businesses must invest heavily into their online presence and create a dynamic and attractive experience for visitors. 65% of customers feel that a company’s app or website impacts their overall experience. 92% of people also are more likely to purchase from a company that provides an emotional journey. 

Merchants must develop a comprehensive online experience and shift budgets towards ecommerce rather than a physical storefront. They have to create a complete marketing plan that encompasses social media, SEO, PPC, and digital content to attract customers from various avenues. They have to cater to mobile shoppers because mobile transactions continue to become more prominent. In fact, 51% of website traffic comes from mobile alone. 

If you need help building your online empire, invest in the best ecommerce software and enterprise ecommerce solutions to dominate your market before your competitors take your spot. 

What Percentage of Ecommerce Businesses Fail?

Around 90% of ecommerce startups fail within the first four months of operations. Merchants cite the main reasons for failure include poor marketing and search engine visibility. It is especially hard for new brands and merchants to reach their audience if they are battling goliaths in their industry. Many top brands invest millions into marketing to capture and convert leads. 

If you want your business to thrive, it is imperative to carve out a niche and develop an effective marketing funnel to draw in your target audience. Check out our guide to learn how to properly scale your ecommerce business from scratch and our ultimate product listing strategies to ensure your customers convert. 

The Impact of Ecommerce on Emerging Markets and Consumer Behavior

Ecommerce has changed the way people approach shopping. The ecommerce industry is part of the larger digital ecosystem, and different components influence how consumers find and buy products. Social commerce is an integral part of electronic commerce, and digital social interaction is directly tied to the online shopping experience. For instance, brand partnerships and celebrity collaborations can support a product’s growth and entice consumers to purchase items. The marketing is embedded into social media posting rather than a traditional advertisement. 

Online merchants can employ retail pricing strategies coupled with their marketing efforts to entice consumers. People can discover discounted products by searching for particular items in search, and PPC links can display links to exclusive deals. They can also run A/B tests to evaluate the best prices for their products. 

Consumers also are much more invested in a company’s mission rather than just their products. For instance, a visitor may feel more compelled to purchase from a particular brand if they work with charitable organizations or humanely produce their products. Ecommerce has transformed how sellers must approach branding and interaction with their customers. They must design a storefront that is not just a place to buy something but an immersive experience to guide consumers on a journey, especially in the luxury ecommerce industry. 

How to Grow a Category in Ecommerce

There are many ecommerce myths out there, but there are several strategies that are sure to compel your business to the next level:

  • Develop content with high-purchase intent. Once consumers land on your product listings, make sure to include value-based descriptions, high-definition images, and video demonstrations. 
  • Have a comprehensive marketing plan that encompasses web and search engine optimization, social media ads, and Pay-Per-Click (PPC) ads. Test which channels are best for reaching your audience and generate the best return on ad spend. 
  • Use a variety of keywords to categorize your product listings. Always have a main category listing but use subcategories to help match user search intent with your product pages. 
  • Utilize testimonials on your website and compel your customers to leave reviews on your Google My Business listing or product pages. Products with many high-star reviews are an excellent way to demonstrate your product’s quality and build trust with new visitors.

Top Ecommerce Trends and Innovations

ecommerce-trends

Let’s discuss some of the most noteworthy ecommerce trends and innovations in the industry and how you can use them to your advantage:

1. Your Store lives on Social

People live their lives on social media. Whether it’s Facebook, Instagram, Twitter, YouTube, WhatsApp, Tumblr, or another burgeoning platform, most people share their lives on some medium of social media. It’s only natural for shopping to evolve to be a part of that experience.

Over the last year, social media has gained tremendous momentum in the world of ecommerce. According to Forbes, there has been a 146% year-over-year growth in online retail orders alone, and almost all social platforms now have some sort of commerce offering.

Understanding the value of placing products where people shop, Facebook first introduced Marketplace in 2007. Although it may have been a bit ahead of its time as it never really gained traction and was spun off to Oodle, they continued building the platform. They re-introduced a new marketplace in 2017 with the idea of engaging shoppers through social interaction.  

Likewise, in March of 2019, Instagram launched an ecommerce checkout feature to allow brands to meet customers where they live. The feature enables users to make product purchases without ever leaving the app while enabling IG brands to build actionable consumer profiles.

Instagram order screen

Seamless purchases through social media are essential in today’s marketplace. If consumers find your brand in their social feeds but have to leave the platform to make a purchase, chances are, the sale is lost. Whether it’s email marketing, webpage optimization, or social sales, the fewer clicks it take to complete an action, the better, and conversion rates agree. An impulse buy should never take more than three clicks.

Suppose your brand is not utilizing all that social media offers. In that case, you are quite simply missing a critical opportunity to connect with your audience (and future audiences) on a far more profound, emotional level. From chasing trends and hashtags to laser-focused audience targeting and utilizing influencer marketing, brands should be using every tool they can to access those that directly align with their brand.

2. Tell Your Audience What They Want

Predictive analytics is nothing new, but it is primarily utilized by big box stores and those brands with billion-dollar budgets. However, through the growth of Big Data and machine learning, coupled with the surge of online shopping, platforms such as Nogin have helped brands leverage their data to deliver solutions to brands at a much more affordable entry price.

Predictive Analytics allows brands to:

  • Predict what people are planning to purchase
  • Determine a successful pricing strategy
  • Improve logistics
  • Grant more significant insights into promotions
  • Minimize fraud

The future of retail is entirely reliant on predictive data, regardless of product or vertical. If your brand isn’t utilizing statistical techniques, data mining, predictive modeling, and machine learning to analyze historical data and make predictions relevant to your business, you are left behind. Understanding customer behavior is one of the keys to competing with big retail.

3. Improved Logistics: The Future of Ecommerce Delivery

Consistent delivery across all of your sales channels is pertinent to a brand’s success. When Amazon can ship almost any item within 24 hours at no cost to the brand, this can seem like a daunting task for small to mid-market brands to keep pace. Brands need to self-reflect on what they can deliver and be honest with their customers as to delivery times. That may still leave your brand behind and needing to pay for a logistics solution that can compete, which can shrink profitability.

Finding a solution to handle all three flows of logistics while maintaining competitive SLAs can be difficult. Therefore, your primary focus must start with inventory management; knowing where everything is along your supply chain is critical. Utilizing a system that manages reordering, deliveries, fulfillment, and more is essential.  When completed, you will have created that high-level view of your inventory. It becomes time to focus on a delivery service that aligns with your brand’s needs.

Once your brand has determined the necessary services, the next step is to ensure they display them everywhere. They should ensure that they appropriately optimize them for search rendering with quick access to delivery options.  Every page should clearly present the offer and a link to the delivery options. 

Merchants should display shipping rates, delivery time, and other information clearly and concisely throughout the buyer’s journey.  Then repeat it. And repeat it again at checkout.  Managing customer expectations can be a brand’s greatest promotional tool.

4. Talk to Your Customers

To put it into terms that Visa gave us:

Getting a customer to your website: $10 in SEO. Getting direct one on one conversation with your potential buyer: Priceless.

However, hiring the staff necessary to handle direct inquiries does have a price. It wouldn’t be financially feasible for many brands to hire an entire call center in-house to deal with direct customer interactions.  Therefore many brands have created AI chatbots loaded with answers to common questions to limit human customer relations.  

Over the years, these chatbots have become unbelievably proficient in solving customer’s needs, and in the future may be impossible to distinguish between a real human interaction.

As brands continue to fight to improve their customer service with chatbots and various instant messaging applications, outsourcing to a call center is always an option. Either way, ensuring that the potential customer has productive, practical, and timely information in response to their inquiries is once again critical to the success of competing with larger retailers.

Nogin New Client Announcement: Sanrio

sanrio nogin

Sanrio Partners with Nogin to Deliver New Online Shopping Experience Designed to Delight and Inspire Guests Across the Globe 

  Sophisticated Design Paired with Advanced Analytics and Personalization Features, Drive Consumer Engagement for the World-Class Lifestyle Brand

LOS ANGELES – Sept. 30, 2019Nogin, a full-spectrum ecommerce partner and leading provider of customized, end-to-end digital commerce solutions for retail brands, today announced its partnership with Sanrio, Inc. to revamp the beloved brand’s online store. The remodeled, direct-to-consumer sanrio.com and its underlying technology enable a more fluid and personalized shopping experience.

“As consumer demands continue to evolve as quickly as the online shopping industry, it is vital for brands, both young and iconic, to stay current on ecommerce trends while exceeding customer expectations,” said Jan-Christopher Nugent, CEO of Nogin. “With the updates, we have incorporated into the new website, Sanrio is set to scale quickly and continue to carry the torch as a multi-generational cherished brand.”

The unveiling of Sanrio’s new online shopping experience is the latest step in its evolving ecommerce strategy, concentrated on streamlining business operations and propelling direct-to-consumer sales. Along with delivering the technology backbone and design for the retailer’s store, Nogin is providing full-service support including creative and marketing as well as development, logistics, and fulfillment. Additionally, the new site leverages Nogin’s unique Shoot Sheet Management tool, which enables the Sanrio ecommerce team to manage the entire photo production lifecycle from one central dashboard. The time-saving feature gives individuals visibility into timelines at each stage of production; custom shot list management; image and swatch verification; and search by Product Information Distribution Services (PIDS), stock-keeping unit number (SKU), product name, or universal product code (UPC).

Nogin understands that story and magical experiences are the foundation of Sanrio and its beloved cast of characters.  The brand’s official online destination plays a big role in building and nurturing connections with millions of fans across the globe and we are excited about the fun, new interactive shopping experience the site delivers.

To drive engagement and encourage new purchases, personalization and discovery are at the core of the new site design, which features playful imagery and content crafted to delight and inspire. Mobile-friendly design, integration of Nogin’s robust underlying analytics platform, and a fresh, new user interface, ensure a seamless guest experience from discovery to purchase.

Following the reveal of Sanrio’s new online destination, the team will soon unveil an official new site for Hello Kitty, where fans will be able to explore her cheerful world and access the latest trends and exclusive deals.

For more information about Nogin, visit https://nogin.com, and experience the new look of Sanrio at www.sanrio.com.

What is Dropshipping? A Practical Solution to Maintain Profitability and Grow Your Ecommerce Business

dropsipping ecommerce guide

Dropshipping might not sound like the flashiest segment of the high-tech world of fashion ecommerce, but it’s a strategically crucial component of expanding product line visibility and increasing revenues.

“As many retailers continue to see downward pressure on their sales, they are looking for innovative ways to sell their products,” explains Howard West, Nogin’s Chief Product Strategist. “While most retailers continue to see overall sales shrink year over year, large and small retailers alike are seeing significant growth opportunities in the ecommerce space. Dropship services for retailers are a significant part of any brand owner’s ecommerce growth strategy.”

Learn more about dropshipping, how it works, the advantages and disadvantages, and how Nogin has the most innovative solution for enterprise ecommerce merchants to leverage 3pl fulfillment while maintaining MAXIMUM ROI.

What is Dropshipping?

Dropshipping is when another party—other than the brand owner—is marketing and selling products, but when an order is placed, the products are shipped directly from the brand owner to the consumer. This process allows large retailers to expand their product selection via an app or online store without having to stock inventory for that product.

Dropshipping is one of the biggest ecommerce trends. Brands can integrate their dropshipping provider in many common ecommerce business platforms, including Shopify and BigCommerce. However, many do not feature 3pl EDI integration which is the FUTURE of dropshipping.

Advantages of Dropshipping

There are numerous advantages and benefits of dropshipping that ecommerce merchants can leverage, including:

1. Storage, Shipping, and Fulfillment

Since you don’t have to worry about storing your products in a physical location, it’s simple to get your ecommerce business started. Your dropshipping partner will coordinate managing your warehouse supply, packing, managing and shipping inventory, and handling returns. 

Coordinating fast and efficient ecommerce return rate solutions is imperative to any ecommerce business since poor customer experiences can lead to poor reviews and tarnish your reputation. A professional dropshipping partner will ensure your ecommerce operations run smoothly. 

2. Minimal Capital Investment

A dropshipping model requires minimal capital investment, and ecommerce merchants do not have to commit to a high upfront purchase order. Although buying products in bulk brings down the cost of each product, ecommerce businesses are forced to store, manage, and sell their inventory. If the products don’t sell, they are stuck with a high investment without suitable ROI. 

However, for merchants using a dropshipping supplier, products are only made when there is a verified purchase to fulfill. Merchants no longer have to commit to a hefty upfront payment to get started, so there is less risk. Dropshipping merchants must also factor in paying a premium to produce each product based on a confirmed purchase, so you must have an effective conversion funnel and customer retention strategy to make a sufficient return on your investment. 

3. Scable and Testable With a Variety of Products to Sell

Merchants using a dropshipping supplier can offer a variety of products on their websites. You can test trending products and use your marketing analytics to analyze your best-selling items. Testing various items and selling the products that work without a significant upfront investment in inventory is a massive advantage for emerging ecommerce merchants. It also helps to have marketing automation software to ensure your marketing dollars are maximized. 

If you do experience a boost in sales, you will have the facilities to support larger orders without the additional headaches of scaling your business. It’s also important to use traditional marketing strategies, including product listing strategies and retail markdown 

strategies to ensure consistent purchase orders and growth.  

Does DropShipping Work? Dropshipping Challenges

Dropshipping will reach a predicted market valuation of $557.9 billion by 2025, and around 27% of online ecommerce merchants use dropshipping. Although it is a frequently talked about ecommerce myth that dropshipping is “dead,” that is clearly not the case. However, there are clear challenges many enterprise-level merchants will face using a dropshipping model, including:

1. Meeting Customer Expectations

High-end retailers like Nordstrom and Macy’s, have high expectations of the customer experience. Brands must keep an accurate inventory reading so that retailers aren’t selling products that can’t be fulfilled and negatively impacting this experience. You can harm your brand by opening yourself up to a dropship scenario if you don’t have the infrastructure in place to support these expectations.

2. Managing Logistics

Being able to meet SLAs (Service Level Agreements) consistently is another challenge for brand owners. For example, a department store might expect that when they send an order to a brand by noon, that order needs to be picked, packed, and shipped the same day. If you’re not meeting the agreed-upon expectations, they may no longer carry your products.

3. Processing Returns

Many retailers handle the return process themselves under their previously established returns process. However, there are some situations when the order comes back to the dropship brand owner—for instance when a product is undeliverable or refused upon delivery. Combining these returns quickly and communicating with the retailer is imperative to a healthy consumer relationship.

Complying with packaging requirements: Packaging must be appropriate for the product being shipped. Retailers may require custom packaging and inserts as well as branded packing slips and shipping labels. Being able to manage multiple shipping accounts across multiple retailers can introduce challenges. Many nuances go into building a successful dropship program—and brands need to have effective and accurate systems and processes to ensure success.

4. Operational Infrastructure

For many brand owners, dropshipping a single order to a customer can be a significant challenge. Often, fulfillment systems and processes in place are designed for bulk sales, so a single product order in many cases can result in manual intervention and introduce room for error.

For example, for some brand owners, picking a single item order might look something like this: a worker grabs a lift truck, pulls down a pallet, opens a box, then opens up a master case, opens another box, finds the right size, re-boxes that item, and then ships it. Automating and managing inventory to provide an excellent shopper experience is where Nogin can help provide technology and services that help manage these types of scenarios.

Is Dropshipping Profitable? Is It Worth It?

The short answer is it can be, but for most ecommerce business businesses, dropshipping is not the most profitable approach. Most ecommerce businesses using a dropshipping model have their product margins eaten away by the expensive costs of dropshipping fulfillment. It’s a convenient way to run an ecommerce business, but it costs a pretty penny to get it done. Not to mention, companies also have to generate traffic to their shops using Google or social media ads, further dipping into profit margins. 

Worst of all, big retailers have the resources and infrastructure to squeeze you. Most growing ecommerce businesses fail to scale and maintain their profitability. They have to offer colossal sale prices to stay competitive and simply cannot bring their operating costs down enough to stand a chance against Amazon, Walmart, and other retailers. Big retailers can also invest in their own knock-off products that you may try to sell in your store. Although they may be popular items, Amazon or Walmart will be able to offer a more inexpensive alternative with free shipping and better fulfillment infrastructure. 

The only way to compete is by using Nogin. We have the power of big retail to fight big retailers. You’ll never be able to match the free shipping, fulfillment, and marketing solutions needed to compete with big retailers. Fortunately, we have a different approach. We can migrate your storefront on our proprietary intelligent ecommerce platform. You’ll never have to worry about replatforming again and save thousands on internal development costs and essential internal resources. We also have our own fulfillment centers and intelligent shipping solutions to help you save on all your ecommerce expenses. 

Dropshipping can be profitable if you use your Nogin.dropshipping-solutions  

How is Dropship Evolving?

Retailers are embracing innovative, omnichannel marketing strategies as they continue to combat the ecommerce revolution. This requires brand owners to keep up with technology and infrastructure investments to meet the demands of their most successful retailers.

Making products, wherever they are, readily available to the customer is just part of the overall picture. To create seamless experiences, it is necessary to access accurate inventories—which may be in a store or a warehouse or transit—and to be able to communicate the right product information consistently and deliver on customer expectations.

The key is not to focus on keeping up with Amazon or Walmart but on differentiating your brand experience from the rest. Having the right partner to provide consistent operational expertise and infrastructure so that brand owners can innovate and differentiate their products is the only way to compete. 

Picture this: a customer visits a retailer with a personal shopper. As the personal shopper finds products and styles for this customer, they might use technology like augmented reality to show how styles that the retailer does not hold in stock might look on the customer. The shopper can make the purchase right there and have the products delivered directly to the home, or the shopper can pick them up and try them on the next day at the retailer.

For a brand owner, this means making certain they have provided the retailer with the right mix of photography and product content, making sure that inventory and sizes are 100% accurate, and having the infrastructure to dropship that order immediately following the decision of the customer either to the shopper or to the retailer. As a brand owner, being able to support these retailer innovations is a must to succeed.

Imagine going into a high-end boutique, standing in front of a mirror, and being able to interact with digitally, drag and drop, and try on clothes virtually thru technology, then trying on shoes or accessories via the mirror, placing an order with your phone via a mobile payment app, and having all of these products delivered from multiple brands directly to your home via dropship. This is happening today, and as a brand owner, you must be looking ahead to make sure you can support these types of sales processes.

Dropshipping FAQs

We are sure you have other questions about dropshipping and if it is right for your business. Check out the answers to some of the most frequently asked questions about dropshipping. 

How Much Do I Need to Invest to Start Dropshipping?

The minimum amount needed to start a dropshipping business is around 150 dollars. New merchants simply need to purchase a domain name, a hosting website, CMS, and dropshipping software to fulfill orders. 

Do I Need GST for Dropshipping?

If your business operates out of Canada, you will have to fill, apply, and collect Goods and Services Tax (GST) instead of sales tax which is a flat-rate percentage based on the individual transaction value. 

How Do Dropshippers Make Money?

The profit margins are slim, and competition is fierce. Suppose you want to make money with your dropshipping business. In that case, we recommend learning more about what our enterprise ecommerce solutions can help increase profitability, lower internal operating costs, and scale your business. 

Is Dropshipping Legal?

Dropshipping businesses can run into legal troubles if they work with a shady supplier. Some suppliers provide illegally trademarked logos or products that use a company’s intellectual property. If you sell their illegal products, then you are liable and complicit. Make sure to choose your supplier carefully and sign a solid Dropshipping Agreement Contract. 

How to Find Dropshipping Suppliers?

There are many dropshipping suppliers to choose from but some of the most popular include:

How to Make Dropshipping Work? Use Your Nogin!

The reality is that ecommerce operations and logistics are not what many ecommerce leaders want to worry about. Managing inventory, infrastructure, marketing, development, and the endless other components of running an ecommerce business is not only challenging but draining. 

Nogin provides comprehensive ecommerce support for our partners. Nogin believes in a partnership model to ensure that we can serve your business to the best of our abilities. Typically, ecommerce giants must rely on outsourcing their marketing, development, website maintenance, fulfillment, and more. It is expensive but requires significant oversight to ensure they are working in tandem with your business’s goals to meet your website KPIs

Nogin invests in your business upfront and migrates your business on our proprietary headless ecommerce platform. We have a team of Nogin Nerds to ensure your ecommerce business maximizes efforts front to back. More importantly, our technology features marketing automation and continuous research and development to deploy the most effective tactics for all our partners. You also NEVER have to replatform again, which can cost ecommerce businesses tens of thousands of dollars. You won’t have to worry about updating your website with every Google algorithm or iOS update. dropshipping-savings

Our partners save on every facet of their business to become scalable, profitable, and nimble. You’ll finally have the tools, resources, and support to fight big retail while maintaining complete control over your brand. Get in touch with us to see if you qualify for a FREE site audit. You could be wasting thousands of dollars each day, so don’t let your opportunity slip by. Use your Nogin!