Your supply chain practices could make or break your business. The way you approach logistics has a significant impact on customer satisfaction, especially in an age when customer demands are increasing. Supply chain practices affect how fast products are delivered to customers, how sustainable your logistics are, and your overall costs.
COVID-19 accelerated eCommerce adoption rates by five years, meaning that more businesses are embracing eCommerce. The average consumer also expects their favorite brands to support their need to shop online. This increased supply and demand for eCommerce offerings increases competition. If you aren't optimizing your eCommerce offerings, you risk pushing these customers away.
This begs the question, how can you improve your competitive advantage from a supply chain standpoint? Here are four trends that could give your eCommerce business the upper hand come 2022.
Optimize your supply chain for omnichannel customer support
eCommerce stores have customers who access their businesses from diverse platforms, including social media, eCommerce platforms, and even in-stores. These customers expect consistent service delivery regardless of where they are shopping from, but the sad truth is that only 29% of them get it. Ignoring customers at specific brand touchpoints could leave a bad taste in the mouths of willing customers – people who you could push towards the competition.
However, embracing optimized omnichannel supply chains isn't easy. You have to serve customers with diverse expectations using segmented supply chain networks. Some want same-day delivery, while others crave reduced product costs. You can ensure that your business supports these diverse consumer expectations by:
- Centralizing your supply chain network with the help of an ERP system: This helps you have a bird's-eye view of the best-performing supply chain segments while providing insights on anything that needs tweaking.
- Working with vendors you can count on: The right vendor relationships will ensure that you can reach product delivery goals and reduce unexpected product delays. They will also help you cut supply chain costs and time for an easier time engaging with omnichannel customers. For instance, partnering with distributors with fulfillment centers close to customers could reduce lead time.
- Prioritizing lead time accuracy: Look for tools that help you forecast product lead times to ensure you promise customers feasible product delivery timelines. This reduces frustration on your end while keeping customers happy.
- Ensuring compliance to customs: Customs regulations can have a huge impact on business efficiency. Working with partners that help you remain compliant reduces supply chain bottlenecks.
Focus on supplier relationship management
COVID-19 put supplier relationship management in check. Companies that had strong supplier relationships had an easier time adjusting to the pandemic. Those that didn't were struggling to survive. Building strong supplier relationships would be a great place to start if you are looking to fortify your eCommerce business in 2022.
You should look beyond the typical supplier relationship management signals, such as how optimized a supplier's pick and pack strategies are. For instance, the focus should be on assessing how disruption-ready your suppliers are since you don't know when the next big disruption will come. Some other great tips to follow are:
- Optimize your supplier onboarding procedures and embrace flexible payment terms.
- Allocate supplier relationship management roles to specific team members to ensure personalized relationships with critical suppliers.
- Consider signing more outcome-based contracts to increase suppliers' commitment to your business' success.
- Communicate consistently and effectively with suppliers.
Optimize your supply chain for last-mile delivery
Last-mile delivery is the most important part of most supply chains - it's customer-facing. The priority should be to deliver products fast, in excellent condition, and at minimal costs. The order fulfillment bar has been raised, with 80% of customers wanting same-day delivery and 61% expecting orders to be fulfilled within one to three hours.
One aspect that adds more pressure to small-scale eCommerce retailers is that eCommerce giants like Amazon have been improving their last-mile delivery. If you want to fight against such giants and retain a competitive advantage, consider the following:
- Optimizing your supply chain network for last-mile delivery: This includes segmenting customers based on buyer behavior, shopping basket composition, and willingness to pay, among other things. You can then partner with suppliers and 3PL agencies that can meet the expectations of these different segments.
- Pay attention to logistics cost management: Ideally, you should strike the right balance between meeting customer expectations and managing service costs. This means that you will need to exercise control over warehouse fulfillment costs as well as delivery, customer support, and return costs.
- Set KPIs for third-party performance management: Making sure your supply chain partners do their part will ensure both customer satisfaction and better cost management practices.
Embrace green logistics
Customers care more about the environment than ever before. 83% of consumers believe that companies should prioritize a product's ability to be recycled or reused. With consumers being more conscious about their environmental impact and that of their favorite brands, eCommerce businesses that can embrace green initiatives will win in 2022. More importantly, environmental forums like COP26 continue to sensitize people to stop climate change, which could impact consumer behavior.
Besides saving the planet and attracting environmentally-conscious customers, green logistics also promise multiple benefits for businesses. For instance, you can enjoy reduced costs, government subsidies, and safer working environments. Best of all, implementing green logistics can be as easy as using electric delivery vehicles, optimizing your fuel economy, switching to biodegradable packaging, or optimizing reverse logistics to enable the recycling of waste products.
Step up your logistics game
Customers are demanding faster shipping and better eCommerce experiences that are wrapped in sustainable practices. Companies that can offer these features will have a competitive advantage in 2022. Achieving most of these goals requires having a solid 3PL that can help with your supply chain. Learn how outsourcing to Rakuten Super Logistics can reduce your shipping and fulfillment costs while delivering fast and accurate order fulfillment.
Rakuten Super Logistics is a leading eCommerce order fulfillment company that provides the scalability, flexibility, and cost savings retailers demand.
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