Despite the comeback of brick-and-mortar retail in 2022, e-commerce has secured its place as an essential channel for customers. However, just as a retail clerk having a bad day or a dirty store might ruin the customer experience for shoppers, so can wrong, missing, or poorly packaged items in response to an online purchase. Hybrid shoppers have come to expect the same quality service online that they receive in a store, which makes your fulfillment house an extension of your overall brand.
When selecting a third-party logistics (3PL) provider for e-commerce fulfillment, you must consider much more than cost. Ultimately, how your fulfillment 3PL treats your products will directly impact your customers and their overall shopping experience.
How Your 3PL Provides a Quality Retail Customer Experience
On the surface, providing a good fulfillment experience for your retail customers seems simple:
- Pick the correct items
- Put those items into the box and seal it
- Ship the package quickly
- Deliver the order on time and intact
Easy, right? You might think so, but not all fulfillment providers provide the same level of service or capabilities. Here are some problems a 3PL might have that will result in a domino effect that ends at your customer’s experience:
- Unscalable manual processes. While not all e-commerce fulfillment needs automation, the level of automation a fulfillment center does need tends to climb in tandem with order volumes. As a result, if a warehouse doesn’t have the proper technology to handle its current volume, it will be reflected in mistakes. Such mistakes may include late shipments, incorrect picks, or missing items. Furthermore, online shoppers expect good visibility into their orders, which a low-tech 3PL can’t provide.
- Unhappy employees. Employees perform better when they have a positive work environment and good compensation. This extra effort shows through to your customers when they open the box. Conversely, an unhappy employee may treat products roughly and damage them or fail to package items properly and risk shipping damage. Your customer can tell when the packer didn’t care.
- Too small of a warehouse footprint. If your 3PL can’t locate inventory near your customers, you’ll pay higher shipping costs between the warehouse and your customer’s front porch. Higher shipping costs may result in a need to raise prices to accommodate. Also, if the bulk of your shipments are shipped long-distance, your risk of late shipments rises considerably. A 3PL with a large national warehouse footprint can help to mitigate these challenges by holding inventory near key markets.
- Poor processes for handling returns. Consumers returned an average of 8% of their online purchases in 2021. Though the end-goal is always a happy customer who keeps their product, the reality is that e-commerce returns have become an essential part of the customer experience. If your 3PL can’t process returns quickly and effectively, your customer may wait far too long for their refund or replacement. This type of interaction can negatively impact your brand reputation among customers.
- Inexperience with your product type. General e-commerce experience does not guarantee a good customer experience. For example, let’s say you sell glassware. If you use a 3PL whose online order fulfillment experience is limited to stuffed toys or heavy gym equipment, their processes and equipment may not be set up to handle your delicate products. As a result, your customers could end up with a box of shattered glass instead of the glassware they ordered.
When vetting 3PLs, always ask for metrics and speak with existing customers to find out what kind of service levels the fulfillment provider can offer. With that information, you can gain some insight into how that particular 3PL’s service might impact customer retention. Finding a 3PL that treats you as a strategic partner instead of just another customer will help to ensure a positive customer experience for both you and the online shoppers that support you.
About Phoenix Logistics
Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.
Mr. Frank P. Crivello began his real estate career in 1982, focusing his investments in multifamily, office, industrial, and shopping center developments across the United States. From 1994 to 2008, Mr. Crivello assisted Phoenix Investors in its execution of its then business model of acquiring net lease commercial real estate across the United States. Since 2009, Mr. Crivello has assisted Phoenix Investors in the shift of its core focus to the acquisition of industrial real estate throughout the country.
Given his extensive experience in all aspects of commercial real estate, Mr. Crivello provides strategic and operational input to Phoenix Investors and its affiliated companies.
Mr. Crivello received a B.A., Magna Cum Laude, from Brown University and the London School of Economics, while completing a double major in Economics and Political Science; he is a member of Phi Beta Kappa. Outside of his business interests, Mr. Crivello invests his time, energy, and financial support across a wide net of charitable projects and organizations.