Retail as we know it has already changed.
The Australian e-commerce market is currently worth $28.6 billion, and with more than 80% of Australians shopping online, they’re spending an average of $1108 per year. And while online spending has only just reached 10% of total retail sales in 2018, taking its share to two percentage points higher than the previous year, Australians are spending more online each year - last year alone, online spending increased 24.4% year on year, according to the Australia Post Online Shopping 2019 Ecommerce Industry Report, and Web alive projects that by 2021, the Australian e-commerce market will be valued at $35.2 billion.
With this shift, for businesses large and small, comes a change to the infrastructure requirements of meeting online customers’ demands for fast delivery, combined with accurate real-time reporting to customer web interfaces to meet the high turnover and customer-centric user experience.
So, as your business grows online, and your internal business units experience increasing pressure to deliver fast and high quality results to your customers, at some point, your business will need to consider whether the warehousing and logistics capabilities continue to be done ‘in-house’ or outsourced to a third party supplier with specialist capabilities and expertise.
Outsourcing is one of the factors that can completely alter the fortunes of an online business. Here’s some of the benefits of outsourcing your warehousing and distribution to a third party supplier:
1. Scaleability
If you’re doing it right, your online business should be growing year on year.That means, more parcels, more storage, and more reporting requirements. To grow, a business owner can’t do everything.
Going from shipping your goods from a garage or small warehouse to a larger-scale operation is future-proofing your business for when you expand rapidly, with all of the storage, reporting and staffing to support your business growth.It’s also an excellent way to ensure that your customer service standards arenot only maintained, but monitored and reported against key metrics, to help your business perform and grow in the future.
2. Flexibility - for you, and your customers
Outsourcing to a third party supplier allows the demands to grow and shrink with seasonal requirements, without the need to hire, train or lay off staff to manage the process, and still maintain your customer expectations and business reporting requirements.
And as online purchasing becomes more prevalent, customers too are looking for flexibility in their purchasing options, delivery times and return processes.Australia Post’s Ben Franzi, General Manager, Parcel & Express Services andIntermediaries at Australia Post, suggests that giving more choices to customers on how they receive their delivery increases the conversion to sale rate -ranging from express delivery, to Parcel Locker collection, through to ‘click and collect’.
Customers are also looking for their return parcel drop-off (and reimbursement) to be a simple and fast process. Utilising the infrastructure of a third party supplier to manage this complex process, within your business’s service standards and quality, gives your business the opportunity to lean on the experts for this delicate part of your customer relations.
3. Speed
“The only way retailers are going to survive is to be fast and quick and get goods to their customers quickly,” says Travis Erridge, co-founder of warehouse and supply chain consultancy TM Insight.
Increasingly, customers expect a fast turnaround on their online orders, and many businesses hang their service hat on expediency of delivery - ranging from ‘overnight express’ through to ‘same day delivery’. According to Australia Post’s 2019eCommerce Industry Report, next business-day deliveries have grown by 31.7% inAustralia, and almost two-thirds (62%) of these are in the fashion industry.
“Retailers are definitely using speed as a marketing strategy,” says Ben Franzi, GeneralManager, Parcel & Express Services and Intermediaries at Australia Post.“Delighting shoppers with next-day delivery will help improve customer satisfaction and build loyalty.”
“We are seeing more same business-day delivery within metro areas,” says Ben, suggesting it’s a good opportunity to upsell. “You can manipulate basket size by offering free express shipping for orders over a spend threshold.”
Outsourced services are well-equipped to handle these fast turnaround times, with real-time reporting and the physical infrastructure, and staff, to meet the peaks and troughs of your business sales.
4. Leave it to the experts - so you can keep your main thing, the main thing
You didn’t start your business so that you could build warehousing and logistics. You wanted to build amazing products, a strong brand, and a loyal customer base. So focus on that, and let someone else do the grunt work. Third party warehousing and distribution systems are able to offer their business customers automation solutions to ensure quality control, reduce risk associated with labor availability, and deliver on high-level service agreements to meet your customers. So you can focus on the main thing - the tasks that let your business grow. As a business owner, you set standards for yourself, and ideally, the quality of your work - at every touch point - should not be sacrificed because of fluctuations in your business, or as a result of business growth. Outsourcing your warehousing and distribution is a smart way to future proof your business.
How can DMC Group help you with your warehousing and distribution needs?
DMC Group’s fully-integrated warehousing and distribution process takes the hassle out of storage, logistics and order processing, and allows clients to focus on their business. We do this by creating a personalised online ordering platform to suit your needs, or integrate with your existing ecommerce solutions. Our weekly and monthly reporting provides the ultimate in transparency for your warehousing needs, as well as projections for future use, and improvements against industry benchmarks. Speak to one of our team today to see how we can help your business reach its fulfilment potential.
