Internet retailing is enormous and it’s only getting bigger. And yet, the software to manage the processes of Internet retailers is poorly integrated, poorly configured, and inefficient.
We sat down with a number of Internet retailers and asked them what they want from a software perspective? Their consensus: a need for fulfillment execution software. They want tools that help them at every stage of the process. They want tools to increase customer satisfaction and thereby indirectly increase sales.
Internet retailers either buy or manufacture products, load product content onto marketplaces, and fulfill orders. They want everything to be integrated and seamless with complete, accurate, and timely information accessible by everyone who needs it. They want excellent customer experiences supported by fast, accurate deliveries at the best shipment cost. They want superior inventory management and the ability to achieve the highest levels of operational efficiency, especially in regards to personnel (training and numbers of employees), space, and keeping a handle on seasonal fluctuations.
Unfortunately, that’s not what they are offered by most suppliers of fulfillment execution software.
Most software used by Internet retailers solves a single problem without coordinating functionality across multiple platforms. What functionality ought to be fully integrated and configured for optimal efficiency? Examples include: uploading of item content to marketplaces; integration with financial accounting software; provision of complete and timely information to customer service personnel; communication with vendors and drop shippers; warehouse processes (including receiving, quality control, putaway, picking, and shipping); optimizing shipping efficiency; replenishing inventory; and projecting personnel, space, and raw material requirements.
Internet retailers told us they wanted to end the Frankentech effect – the reality that their many software platforms were poorly integrated – cobbled together ineffectively by in-house personnel, rather than delivered by their solution provider in an effective, easy-to-use package. They wanted somebody to understand that their in-house IT personnel had built Frankenstein’s monster – and every so often, the monster wakes up and tries to eat them! They want a single software supplier to offer a fully integrated, effectively configured fulfillment execution solution that would help them run their business as effectively and productively as possible. Some of the many items on their “wish list” included:
Internet retailers want an easy way to upload item content to marketplaces from a single spreadsheet. Too much time is wasted entering item content to multiple marketplaces since each marketplace has different rules about item content uploads. Internet retailers want to enter the item content once, in a single spreadsheet, and be able to confidently rely on their channel management software (CMS) to upload that item content information instantly and seamlessly to every marketplace.
Many Internet retailers are entrepreneurs. They don’t have time to wade through reams of reports. They want dashboards with all necessary information synthesized efficiently and accurately, in real time. They want to see everything they need to run their businesses in summary form, but without sacrificing any critical information. They want to see all orders, accumulated in a single consolidated view, regardless of marketplace / channel. They want to see a summary of which orders are coming from which marketplaces, at what times / days. They want to see a comparison of in-stock inventory to sales by items, by channel. And since every Internet retailer is unique, they want to see a custom dashboard tool that allows them to display their critical information – and to allow each employee in their organization to display their own unique dashboards, custom-configured to their function. They want accuracy, simplicity in customization, with seamless and instant integration of all information. Internet retailers require mobile friendly dashboards to know what’s going on in their business anywhere, anytime. Dashboards should be flexible and should not require action by the software provider to modify. Every employee should have a customized dashboard that helps them be productive and effective. Every employee should have appropriate access to modify their personal dashboard to ensure they have the critical information at the right time. Emergency reaction to potential problems and the ability to redirect resources and activities on the fly is more than ever necessary to Internet retailers. Their world moves at light speed and every employee must have the tools required to keep pace and make good decisions.
Receiving / Putaway
When it comes to specific operational requirements, Internet retailers have a TON of needs. Many Internet retailers import goods from non-domestic sources and frequently, purchase orders and receipts are at variance. They want an easy way to create a reconciliation of mismatched receiving quantity to manifest, etc. They want the fastest, easiest way to offload containers and be confident that the inventory they are receiving is accurate, and that quantity and quality disputes with suppliers are handled instantly with excellent documentation. As inventory is received, they want to automate quality control segregation with the ability to customize QC processes by supplier. They want to manage receiving pallet weight as a quick check for quality control and receiving quantity audit. They want these processes to be replicated as well, to ensure accuracy of outgoing shipments. Internet retailers want to be able to putaway quickly and accurately, clearing receiving floor space as quickly as containers can be offloaded. They want to be able to putaway to virtual inventory locations, so that like-kind inventory can be located in a variety of warehouse locations with instant and efficient inventory locating during the picking (and picking planning) processes. They want putaway tasks to optimize the utilization of personnel and space in the warehouse and they want this accomplished automatically by their software to minimize double inventory movement and maximize inventory visibility.
Internet retailers do not want to have to inventory everything they sell. Therefore, they demand drop shipping and multi-warehouse functionality so that they can offer a wide variety of products on their marketplaces. They want “real time inventory grabs” from drop shippers to ensure that everything they sell can be delivered, regardless whether the drop ship supplier is also offering drop ship services for other Internet retailers. Internet retailers want to manage how inventory is offered to various marketplaces. For example, they want to be able to prioritize shipments so they can deplete the drop shipper’s inventory first, and then raise the prices on their marketplaces when all remaining inventory is in company-owned warehouses. Internet retailers want flexibility and a relationship with a software supplier which allows customization of the interface with company-owned inventory locations, suppliers, drop shippers, and marketplaces to ensure optimal product availability, excellence of customer experience, and minimization of cost in relation to maximization of sales.
Integration With Other Software / Information Access
Internet retailers want accessibility to all order data for their Customer Service Department. To provide an excellent customer experience, CS representatives must be able to answer any question, immediately, to the satisfaction of the customer. Complete, accurate, and up-to-date information about the products, pricing, delivery, in-stock / out-of-stock status, alternative products, order history, payment information, delivery address, etc. must be available to the CS representative. Internet retailers know that customers expect automated communications, such as “your order has shipped.” These communications must be automatically integrated with the customer file and all CSR functions. Duplicate data entry means mistakes, increased cost, and delay. Internet retailers demand automatic integration of all transaction details on product sales, as well as reliable, automatic data transfer regarding receiving, inventory, relief from inventory, reconciliation with shipping, etc. This information must be integrated perfectly with whatever financial accounting software is used. There are many reasons that financial statement integration is imperative, but one example is matching PO documents to incoming inventory receipt processes to accelerate receiving processes – meaning that the inventory is available for sale immediately upon receipt. Another example of how perfect integration can boost sales and improve customer experience is where the Internet retailer has accepted orders on inventory that is out of stock, but for which shipments are anticipated. Without seamless system integration, these important facts can be invisible to the personnel and systems that require them. Additionally, automatic orders for replenishment of inventory illustrate the need for complete integration of financial accounting software and the fulfillment execution software. One need only think about COD receipt of inventory, tracking COD shipments to customers, or backorder management to recognize the multitude of other benefits that comes from effective integration with financial accounting software. Finally, effective dashboards absolutely require the perfect integration of operational process software with financial accounting software, because many of the gauges on a useful dashboard are ratios, or comparisons, presenting critical information from both sources. Elimination of double shipments to customers and receipt of double orders from suppliers can only be accomplished when the information from all sources is perfectly integrated across all systems.
Picking / Shipping
Internet retailers often reprioritize shipments. Therefore, the ability to grab orders by shipping priority is imperative. It is important to be able to manage receiving, picking, and shipping tasks in accordance with A, B, or C priority with projected ship dates, by carrier. As every Internet retailer knows, particular shippers have hard and fast pickup times – for example, UPS orders must be picked to arrive at shipping in sufficient time. Internet retailers require wave and batch picking alternatives, by warehouse location, or drop shipper. Internet retailers who ship single items to customers must have the most effective and efficient picking methodology established by their WMS software and picking instructions must be communicated to warehouse personnel instantly and without the possibility of error. Items picked in bulk for single orders must be aggregated with customer orders at the most efficient location to accelerate order-to-shipment times and to eliminate bottlenecks and pinch points. Multiple RFID confirmations ensure accuracy of picking, packing, shipping, and excellence of customer experience.
Internet retailers see a much higher percentage of returns than do traditional brick and mortar retailers. Returns must be processed quickly, accurately, and flexibly. Is the item able to go back to stock? Does it require repackaging? Does it go to liquidation? How can your fulfillment execution system (and its returns component) help you maximize the return on resale of items returned by customers?
Internet retailers want one thing more than anything else – to increase sales. Software suppliers should start with order generation, focus on how to increase sales, and then focus on WMS. Too many WMS, or fulfillment execution suppliers, focus on their area of expertise and forget that the Internet retailer’s focus is on sales first. Fulfillment execution can and does boost sales. Customer dissatisfaction is the ultimate poison to the Internet retailer. When customers get what they order, at the right price, shipped conveniently and quickly, with the ability to manage returns simply and politely, customer satisfaction increases dramatically and customer reviews drive sales increases. Making your fulfillment execution systems work impeccably is perhaps the single largest factor in ensuring your customers see your Internet retail business as world class.