Today, consumers expect products to arrive in two days or less. Anything longer than that feels like a lifetime. The logistics and fulfillment landscape for Shopify brands has rapidly shifted over the past few years, in part due to COVID-19 and technological advancements.
Aside from supply chain woes, online stores are constantly navigating the issue of order fulfillment as demand grows, especially amidst the holiday season. To learn more about how ecommerce fulfillment services are evolving to meet brands and consumers alike, we sat down with Casey Armstrong. He’s the CMO at ShipBob, an end-to-end global fulfillment provider working with brands such as Hero, Muddy Bites, and TB12.
Get ready to dive deep into:
- Shipping challenges for small businesses
- How brands can set themselves up for success before international shipping
- What to look for in a fulfillment partner
Ecommerce Fulfillment isn’t One-Size-Fits-All
So much of a business can be automated, but what about order fulfillment? That’s a different story.
Before 2014, the ShipBob founders had their own ecommerce business. Similar to many brand owners, they realized they could automate a good portion of their startup operations, but when it came time to nail down how to automate order fulfillment, they had a hard time finding an effective solution.
One of their biggest challenges was finding a fulfillment company that could meet their size, scale, and business needs as a SMB. Stuck in that gray area where they needed help but weren't large enough to qualify with certain service providers, they decided to create an ecommerce fulfillment solution independently. Enter: ShipBob.
The challenge of finding a fulfillment provider highlighted the bigger picture: major retailers (Target, Walmart, and Amazon) are fulfilling orders on a massive scale, often with same-day or next-day delivery. Now, that’s become the consumer expectation, even for small brands.
“Small and medium-sized DTC businesses are expected to step up and operate on the level of Target and Amazon. There’s the ‘Amazon Expectation Gap’ and brands of all sizes need to overcome that,” Armstrong explains.
So how can DTC brands keep up with customer expectations, and what can brands do to create a 10/10 customer experience and evolve as shopping habits change? Find the right ecommerce fulfillment partner.
Before selecting a warehousing and overall fulfillment partner, Armstrong suggests brands look at:
- Where are the majority of customers located?
- What’s the final destination for the largest percentage of packages?
Proximity to inventory is a huge piece of the puzzle. ShipBob runs 40 fulfillment centers across six countries. With over 7,000 customers, they seek out the most advantageous locations for new warehousing centers, ones that are close to where large order volumes are placed.
“This helps with shipping speed and reduces shipping costs for our customers,” says Armstrong. “Those savings can help them run a more profitable business with lower shipping rates, or it even allows them to provide free or low-cost shipping.”
Plus, today’s DTC brands are shipping ecommerce orders, both domestically and internationally. This adds another layer of complexity to order fulfillment services and shipping.
Pair that with different ecommerce platforms and multi-language or multicurrency needs, and without a doubt, brands need to think bigger moving forward.
“Customers expect brands to have a global reach. DTC businesses will either need a fulfillment solution that can fulfill globally, or they’ll need to find a new way to distribute inventory worldwide.”
Ecommerce Fulfillment Evolves to ShipBob’s Omnifulfillment Solutions
In addition to evolving customer expectations around fulfillment, Armstrong notes a shift in general shipping and selling behaviors.
“Brands have been using platforms [Shopify, Big Commerce, Instagram] to sell directly to consumers, but there’s been a shift. Now, these brands also see value in selling through different, online retailers,” says Armstrong.
Branding themselves as a “global omnifulfillment solution,” ShipBob strives to meet the needs of DTC brands while providing additional support, especially for those who sell through various sales channels (even B2B and B2B2C).
“More and more DTC brands are selling through different online retailers such as Target, Nordstrom, and Amazon Prime. In addition to fulfilling and shipping products to consumers, they need to fulfill and ship orders to other stores or the retailer’s distribution centers too,” explains Armstrong.
Plus, there’s a growing demand for customization. The unboxing experience is one area of focus for ShipBob. Recently, they’ve seen a huge influx of requests for customized tissue paper, gift notes, and even branded tape. The package itself is an opportunity to surprise and delight the customer and further improve the customer experience.
So, how does ShipBob offer customization when every brand has different inventory and SKUs?
It comes down to simplification.
ShipBob has its own proprietary warehouse management system (WMS), which powers their entire ecommerce fulfillment network. Their unique method standardizes order processing, even in the case of customization. By streamlining the order fulfillment process and the types of customization capabilities offered, ShipBob has created a workflow across their entire fulfillment network that works for any ecommerce business, regardless of size or quantity of goods.
For example, when ShipBob prints a custom note, they zoom in on the supply chain with an emphasis on “chain.” The team asks themselves, “Where in the supply chain do these customizations fit?” Then, they nail down a way to make it work within the existing workflow/fulfillment process, whether they’re filling goods in Southern California or Australia.
“Where do you get a 100% open rate? It’s in the packages you ship to customers. Creating a special experience in order fulfillment makes a difference.”
Challenges and Opportunities for DTC Brands
Looking for a shipping and fulfillment provider?
First and foremost, Armstrong recommends shopping around and then doing a test run with a fulfillment company. Starting small helps brands finetune options before putting in the time and effort into outsourcing on a larger scale.
If international shipping is on the table, diving into the metrics first is most helpful, particularly around which countries have the highest demand for goods. Then, brands can start to explore other challenges that might come up, such as additional shipping costs or duties. Additionally, understanding and meeting different codes, criteria, and regulations for products entering a country are crucial (and not easy). ShipBob offers help; they have a team of international experts who simplify the process and offer advice.
“There are so many ways people should harness data, and we have an analytics reporting tool built into the ShipBob dashboard for customers,” says Armstrong. “It all comes down to understanding where your end customer lives and how you can effectively manage inventory storage.”
Inventory management is a key part of the whole fulfillment equation. Noting recent inventory issues—items sitting on shelves for longer than expected and taking up space—more brands need to look into the inventory level data, notes Armstrong. One look at the data and brands can have a greater understanding of what to reorder and order, what products are moving (or not), and which items should be placed on sale or go in a bundle. Otherwise, it’s a sunk cost.
Take TB12, Tom Brady’s brand. They started with one ecommerce fulfillment center, and then after evaluating many 3PL providers, they switched to ShipBob. Now, they have three different fulfillment centers, which reduced shipping costs by 25%. With ShipBob’s fulfillment network, they can now offer free shipping thresholds and two-day shipping, improving customer satisfaction as a whole.
“Your fulfillment strategy—whether domestic or global—is always going to be an essential factor for a brand, large or small. One way to know when it’s time to look for a provider is when the fulfillment process starts taking up too much time that would better be spent on running the business.”
Armstrong’s Advice for DTC Brands
Armstrong reminds brands, “If you have customer orders, you’re always fulfilling.” Optimizing fulfillment all boils down to pricing, weight, and zones.
First, how many zones are you shipping across? That’s where effective inventory management comes into play. At the end of the day, your inventory should be close to your largest concentration of end customers. To help ecommerce companies find the right location, ShipBob does a time and transit analysis.
Then, all brands should look at their dimensional weight. Many ShipBob customers have gone through product and packaging design iterations to ensure products can fit in smaller boxes. That’s one way to save on fulfillment costs.
Finally, think through how you ship items—do you fulfill it in-house or through a service provider like ShipBob? Regardless, brands (or their ecommerce fulfillment center) need to receive goods as cleanly as possible.
“Garbage in, garbage out as the saying goes,” says Armstrong. “Work with your manufacturer to make sure the goods are sent in the cleanest way possible so that everything can be accurately stored and shipped out on time.”
“Make sure your products are as close to the largest concentration of end customers as possible.”
- What to pledge
- How to improve
- Which tools will set you up for success
I think the most important thing brands can do in 2023 is to better manage their customer data—both ethically and effectively. There’s an opportunity for brands to know their customers better than ever before—a clear benefit for both the customer and the brand. When you manage your data correctly, you’ll create stronger and more personalized ads, creative, site experiences, and so much more.
This is a classic: Let the data guide you. Go where the buyers for your products are and communicate with them on a personal level (i.e. by persona and funnel position) and nurture those relationships (past, present, and future customers). It’s possible—all through data.
We recommend that Shopify brands analyze and update their websites using data-driven decisions. Using analytics tools such as heatmaps and scrollmaps can help brands better understand how customers are interacting with their store.
Store owners tend to make assumptions about the way customers interact with their website. Most never go back and analyze their design choices to find pain points or areas of opportunity. By using heatmaps and scrollmaps, they can see where real customers are clicking and concentrating their attention. Leveraging this data, brands can start to iterate on design and make their online store experience streamlined and intuitive.
Hotjar provides a simple way to implement heatmaps, scrollmaps, and recorded user sessions on your site, helping you acquire incredibly informative user data. Additionally, it gives you the ability to create on-site surveys, which allows you to obtain direct and often critical feedback from users about their experience.
Test various attribution models and analyze the impact on your business. At Fifty Six, we are always here to help our clients identify and optimize their approach—a critical step in any successful marketing strategy.
If I’ve said it once, I’ve said it a million times–Customer Lifetime Value. And even more importantly, Future Lifetime Value (FLTV). With the ever-growing importance of first-party data, it is crucial that brands take a good look at their CRM and FLTV metrics.
Stop allocating budgets to low-hanging fruit that doesn’t move the needle on conversion. Think about what’s really going to improve your CX and the return of undertaking different initiatives—not just on what’s top on your list of bugbears on the site!
One of the best ways to understand your customer behavior is by using HotJar. Their heat-mapping and screen recording tools shine a light on where customers are navigating to and from on your site, where they're rage clicking and experiencing frustration, and where conversion is dropping off within real life customer journeys and flows!
Understanding your customers’ pain points via data and analytics , will allow you to work with your CRO/CX Agency to solve customer frustrations and improve conversion.
Rewind backs up all product, customer, and order data for Shopify sites—essential since Shopify itself doesn’t provide this solution. It's saved so many of our clients time and money from administrative accidents.
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33% of customer service inquiries are pre-sale questions. What does this mean? If you’re not investing in customer service, you’re missing out on revenue-generating opportunities.
The benefits of elevating your customer experience:
- 10% to 25% increase in AOV for customers who engage with live chat pre-purchase
- 21x higher conversion rate for customers who reach out via Live Chat or SMS compared to other site visitors
- 87% of customers who have a great customer experience will make another purchase
- 72% of customers share positive experiences with 6 or more individuals
Gorgias is our favorite Helpdesk platform. They can reduce costs by 35%, primarily by decreasing the average ticket handle time. Their machine learning algorithms are trained on millions of ecommerce-related interactions across Gorgias’ customer base and provide accurate, automated replies for the most common ecommerce inquiries. This helps our agents resolve tickets faster, which provides the customer a seamless experience.
Trust your agency! Agencies do the same things across multiple brands and niches, so we see the trends and have the practice and experience!
Don't be afraid of data and insights. If customers aren't clicking on your emails, try a new CTA. If your ads are driving good metrics at a small spend, start scaling. If your customers are complaining about a product, look into QA! If the data tells you something isn't working, let it go and try something else!
I'm supposed to say Tydo, right? 😉
Double down on differentiation. There will be a lot of headwinds this year and standing out from the crowd will set you apart.
A picture is worth 1,000 words. A video? Probably millions. In ecommerce that value translates into engagement, acquisition, and retention—everything you need to impact your bottom line.
At soona, we've seen the we've seen the impact of creative and the continuous split testing of it yield results. Our resolution is to challenge ourselves and double down on innovation and creative optionality so that each brand we work with can distinguish themselves in a crowded sea of D2C ecomm. We'd love to see our brands share this resolution and keep pushing the creative limits.
Klaviyo. We're using it to power our email and newsletter at soona too!
Optimize your returns strategy! This can lead to valuable customer insights, enhanced user experiences, and increased revenue and customer loyalty.
Brands need to dive deeper into understanding their customers to set themselves up for success. Conduct research to gain insights into customer needs, preferences, and behaviors. By doing so, you can develop targeted strategies that will enhance customer experience and boost overall retention.
Right now I would say Gorgias. Having a good customer service tool is crucial to building strong customer relationships.
Start paying heavy attention to data, specifically around retention. We see a lot of effort put towards acquisition with the assumption that once someone buys, they are your customer forever. Instead, get to know your customer, understand their needs, and analyze their behaviors once they are on-site and judge their sentiment after they have visited. Work with a retention focused and data-driven agency to implement tools that contribute to repeat business and customer delight. It will pay dividends.
When surveyed, about 80% of ecommerce merchants think that they are delivering a great experience to their customers. However, when the same customers are surveyed, only 8% of those customers think that they are getting a great experience from the merchant. Now, more than ever, retaining loyal customers is an essential part of any online business and you should spend time with your customers to judge their experience with your website and products and offer improvements based on that feedback.
Tydo's report cards are an essential tool, along with Klaviyo for email and SMS, Recharge for subscriptions and memberships, Okendo for reviews and surveys, Rebuy for AI driven collections and upsells, Loop for self service returns... each tool is great on their own, but their strength as the ultimate tool comes from when they are used together!
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