“Influence of Online Order Fulfillment on Consumer Purchase Behavior”
Whether a customer places an order online, by mail or over the telephone, he or she expects nearly instant gratification. Delays or errors in order processing and order fulfillment are the leading cause of dissatisfied customer, followed by a customer service team that is unable or unwilling to offer an adequate solution. Order fulfillment is a critical component of customer satisfaction that should not be neglected. It plays a pivotal role in customer satisfaction if the warehouse duties such as packing and shipping are not at top standard, you could be turning away customers. Also, if your online store has issues with inventory counts or unreasonably high shipping costs, you may see an increase in cart abandonment. The relationship between ineffective order fulfillment and customer behavior is important as it holds the potential to evoke a customer reaction more complex than merely
the inverse of successful service engagement. This has been observed in the service failure research where it has been seen that positive and negative outcomes relate distinctly to satisfying and dissatisfying experiences i.e.,those factors leading to satisfaction and dissatisfaction are distinct, and the behaviors evoked by satisfaction and dissatisfaction vary.
A brief look at comparison-shopping and store-rating websites reveals that customer complaints often focus on order fulfillment glitches. While most steps in online retailing are visible to the customer and occur before actual payment for the product, shipping and order fulfillment typically occur after payment. This causes the customer to become particularly aware of the order fulfillment process, as the retailer now holds their money, but the product has not yet been received. Accordingly, customers may magnify the significance of glitches as they may view it as the retailer taking undue advantage of them once they have paid for the product.
Therefore, organizations should focus on order fulfillment strategies in order to fulfill the demand of their customers on time and by doing this they could be able to attract new customers and can also retain their loyal customers. Routine evaluation of order fulfillment metrics can prevent issues and avoid delays for customer delivery. Continuously improving each aspect of fulfillment creates a positive customer experience and promotes repeat purchases.
E-commerce order fulfillment is labor intensive and costly. The factors which affects the online purchasing behavior of customers are; absence of face to face interaction, lack of opportunity to examine a product prior to purchase increases the perceived risk and security and privacy issues.
To create and sustain long-term and mutually beneficial online and offline relationships, organizations need to reduce consumers’ perceived risk; increase consumer trust and lessen security and privacy concerns. Addressing these consumer concerns is highly important because consumers increasingly rely on the internet for their regular information search and purchase. Recent
cyber-attacks on high profile corporations’ websites and consequent privacy breaches have made these consumers concerns even more important because in such an online context face-to-face interaction is absent, behavioral intentions of the firm is not clear, and often information is collected without the express consent of the consumer.
Six ways to improve your E-Commerce order fulfillment process are given below:
1) Order Inventory
Products sold through online retail stores have to be pre-ordered in bulk by a third-party. This manufacturer or supplier will sell at a wholesale rate. Since orders are unpredictable, the flow can be either fast or slow, either way items always have to be stocked up in advance.
The minute the inventory is delivered, check each item thoroughly. Tally the number of items ordered and delivered. Also check for damages that may have been caused due to transport or some other unfortunate circumstance. Add SKU’s (Stock Keeping Units) or Labels to your products are essential as they keep a track of each product in the warehouse. This also helps keep a clear count of how many products have been sold. Insert all the Stock Keeping Units inside warehouse management software. This will complete step one of order fulfilment.
2) Inventory Storage
After you check, count, label, and insert SKU’s in a Warehouse Management System. You must organize products in shelves. They have to be strategically placed so as to increase the speed and efficiency of product packaging. For example, those products which sell quick and often have to be placed close to the packing station. The speed of transferring it from the shelf and boxing it becomes fast as the task becomes easy. You can segregate products through the warehouse management software (WMS).
3) Process the order
Every time a customer places an order, it is noted by the retailer and then sent to the warehouse. The product is then looked up and sent for packaging. Instead of going through this prolonged process, the best solution for saving shipping cost and time is installing automated shipping software. This not only gives you the best price on bulk orders but also provides benefits like one point of contact, access to a the best courier companies like (DHL, FedEx Leopards, TCS and etc), for quick delivery and optimum efficiency.
4) Shipping
When the order reaches the warehouse, the product is sort out by its label or SKU. Once double checked, this product is parcelled to the shipping centre. Be sure the packaging is sturdy and durable. Transport at times damages fragile goods. The shipping company weighs the parcel and accordingly suggests the best shipping price. By picking the optimal ship method, you not only make sure you deliver products on time, you also ensure that you don’t spend unnecessarily on shipping upgrades.
5) Return Back Offer
One of the strongest perks of ordering online is the Return Back Policy. This is must have for customers. Although it is a pleasure for the customer to be able to return the product, for the seller it is a pain. Keeping a track of all the return back orders is hectic and if not handled properly may lead to extreme mess ups.
Everyone who is trying to enter in E-Commerce market is faced with the need to work with piece-goods. It is necessary not only to store boxes and pallets, but remove contents, calculate and place each piece. This requires specific business processes. Activities in the order fulfillment should determine the strategy to be followed in the entire distribution network the type of relationships to be maintained with the level of efficiency and efficacy.
6. End -to-End Order Visibility & Tracking
It’s not enough to use the same order management system as your suppliers. What’s more important is the degree of visibility you have into your suppliers’ catalog, inventory and order fulfillment process. Is your supplier running low on stock? Update inventory levels right away on your website too. Does it look like an order that was placed is stuck in transit? Inform the buyer right away to expect delayed deliveries.
The ability to track supplier orders and update customers in real-time helps you manage customer expectations better and improves the overall credibility of your brand. Another benefit of inventory and order visibility is the ability to showcase inventory availability to shoppers on your E-commerce site.
Types of E-commerce fulfillment
1. Drop shipping
In the drop shipping model, you don’t own or keep inventory before you make a sale. You act as a middleman who focuses on marketing and selling a product. You don’t actually have the product on hand. Once a sale is made, you have the product shipped directly to the customer from your partner drop shipper or the product’s authorized distributor. With drop shipping, you essentially outsource the logistics of order fulfillment. You make a profit from the difference between your selling price and the price you pay your drop ship source for the product (this includes any other associated costs such as the drop ship fee).
2. Third Party Service provider 3PLs
More and more companies are starting to outsource their order fulfillment duties and to accelerate their deliveries. Commonly, they partner with third party logistics firms, also known as 3PLs. These firms keep a fully stocked inventory of the company’s products and fulfill all orders in a timely manner. This way, the company can focus on selling its products and doesn’t have to go through any additional tasks to ensure that the product is delivered properly to the end user. A 3PL can improve your delivery processes: while you focus on what you do best making and selling your product. 3PL partner will take care of the delivery process and make sure your customers get their orders on time.
3. Self-Fulfillment and Shipping
Also direct fulfillment, self-fulfillment is the model in which you not only own the inventory but also fulfill (pick, pack, and ship) orders in-house. It’s probably what you’re doing right now, albeit on a smaller scale. If this is the case, then think of self-fulfillment as a leveling-up of your current fulfillment operations. When you go into the self-fulfillment route, you lease a warehouse (if you don’t have the extra storage space on site) and hire staff to do the inventory tracking as well as the picking, packing, and shipping of items as orders come in. The warehouse then serves as your distribution hub where all of your order fulfillment operations are conducted.
The inventory should always be updated and monitored; missing and/or depleted stock can cost you a lot of money of you don’t keep track of inventory carefully. This is why it’s imperative that you use a warehouse management software (WMS) when you’re doing your fulfillment processes in-house. In this E-commerce fulfillment model, your profit is the difference between the retail price you set and the costs associated with inventory buying, inventory storing, and order fulfillment.
