Consumer expectations are rising, being pushed by invocation by the biggest ecommerce companied in the world, which poses unique challenges for wineries and their fulfillment operations.
Over the past 2 years, the average time to delivery for the top 25 eCommerce companies has dropped from nearly 5 days to about 3.5 days.And it appears the focus on speed to delivery is intensifying among top sellers.
So lets pull back from same day delivery and see what is considered “standard delivery” these days.Here are a few of the top 25 internet retailers as identified by Stella Service, a kind of consumer reports monitoring service for eCommerce companies.These are the times from placing an order, until deliver are the consumers address.Each company is well under three days, and they all use a Under-promise/ over delivery strategy by beating he promised delivery window…which in Zappos’ words, is a deliberate attempt to “WOW” the customer.
eBay, Google, Amazon and WalMart have all launched some form of same day delivery.Same day delivery is thought to be a gateway to expand the product categories we buy online:For example, instead of stopping at the store to buy dish soap, razors, or juice boxes (all things I had to pickup this week) you can have it on your door step when you get home.Just imagine how this will change what kinds of things you buy on line, and how often you purchase.
Speedy delivery and effective fulfillment operations are such a strategic part of Amazon’s business they recently purchased the leading warehouse robotics and automation company, Kiva Systems for $700M, in an effort to push the development of technology that improves shipping times while reducing errors.These little orange pods you see are robotsbringing racks full of good directly to the person filling the box, rather than the picker walking around the entire warehouse.In addition, to testing same day service in CA and WA, and building robots, Amazon has plans to open fulfilment centers near every major metro areas in the US. Essentially putting all their fast moving products right in your backyards for next day delivery.
SO what’s a winery to do?Being in CA we are Geographically disadvantaged, as most of the country is at least five days out, when you allow for one processing day.
One solution is to move your goods closer to your customers, similar to what Amazon is doing by building all their new warehouses.WineDirect operates two warehouses, one in CA and one in OH, which puts 85% of US consumers within a two day delivery window using ground service.Using multiple distribution points has the added benefit of lowing the cost of shipping by about 15% for most shipments.
Trends in wine that are driving change in fulfillment operationsCustomization. Build your own clubs, and pick to order mixed cases are becoming the norm.Consumer demands shipping incentives, free shipping. Consumer demands, speedier delivery.How. Apply technology in the warehouse to pick fasterRemoved data bottlenecks, get the order to the fulfillment center more quicklyConsumer wants dataOrder confirmationTracking ASAPInventory visibility,Run mini-flash promotions for overstock items, or slow moversUse of inventory countdowns on the site, to promote urgency.Made possible with real-time links between fulfillment and ecommerce inventory systems.
One that tis clear, consumer love free shipping. In fact, in most industries some sort of shipping promotion has become the default.
When offering free shipping it becomes even more important to try to control your shipping costs, since you are not simply passing it on to the consumer.Get your stuff closer to the customer to lower your zone.Eliminate technical bottlenecks, seek out ways to reduce your reliance on manual steps and spreadsheets to lower the cost to process shipments.Focus on controllable expenses residential fees, returns and redirects.Which can be as much as 3-4% of your transportation spend in left unchecked.
In a recent survey of over 6,000 consumers preformed by Deloitte Consulting 71% say they are more likely to buy from a retailer that offers free shipping.
Another effort will allow the company to get stuff to you even faster. In SF, Oakland, Seattle, New York, and the United Kingdom, Amazon has set up automated “lockers” in drug stores and convenience stores. If you order something from Amazon the company will offer to drop off your item there. On your way home from work, you can just stop by Rite Aid, Radio Shack, Staples, punch in a security code, and get your stuff.
Google is onboard with the locker idea as well, recently acquiring a “rent an address” service called Buffer Box."We want to remove as much friction as possible from the shopping experience, while helping consumers save time and money, and we think the BufferBox team has a lot of great ideas around how to do that.“-Google SpokespersonThe expansion of secure delivery is just another example of customization, which gives consumers many choices on how to receive their goods.
Two great solutions available for Wineries today.FedEx Office- you only need to know which location is most convenient for your consumer, and set it as the shipping address. No addition charge, reasonably temperature controlled, and most stores have a large operating window.UPS My Choice is an interesting service to watch, it allows consumer to redirect packages to a convenient address, FOR NO CHARGE to the shipper. In short, UPS will inform consumers when packages are on the ay, and the consumer can decide which address is most convenient for them.
Consumer expectations are rising, being pushed by innovation by the biggest ecommerce companies in the world, it safe to say consumers in general are going to expect more from wineries selling DTC.I often hear that “my customers don’t care about faster delivery, tracking numbers, etc.” and that my be true, but those things are only going become more important to consumers over time so its best to get ahead of that trend.
TAKE AWAY ALERT:No longer is it sufficient to merely Deliver the what the customer ordered. A modern fulfillment operation must:Reduce the time to delivery.Offer flexible, convenient delivery options.Provide accurate and timely information about your order.Improve your ability to WOW consumers.
ConclusionsChanges in modern ecommerce and consumer expectations will force change for wine order fulfillment.Focus on integration, data availability and scalability are essential to meet these demands.Consumer expectations will require substantial investment by providers to automate, integration and open more facilities.
Funny:-If you’re like me and you tend to zone out during presentations you will appreciate that I have devised a system to indicate when I get to the good content that you might want to take notes on.-
Vin65 RoadShow - WineDirect Presentation
Three Trends in Modern eCommerce…and their effect on consumer expectations andyour fulfillment operations.
“Boy, Amazon and Zappos arereally messing things up for all ofus!”
Proprietary and ConfidentialDo not distributeActual Delivery Times:Zappos.com- 2.0 daysNewegg.com- 2.3 daysHPShopping.com- 2.5 daysAmazon.com- 2.7 daysSonystyle.com- 2.8 daysSite listed: 4-5 days 4-7 days 5-7 days 3-5 days 5-7 days
Proprietary and ConfidentialDo not distributeeCommerce innovation pushes fulfillment in the future.
• 2012 AcquiresKiva Systems• 2013 20 newwarehouses• 8 in CA, 4 in TX,2 in NY Metro
CA wineries Geographically DisadvantagedProprietary and ConfidentialDo not distribute• 58% of US isfour or morebusinessdays.
Solution: move product closer to consumersProprietary and ConfidentialDo not distribute• 85% of US intwo days orless.
Four ways to accelerate your time t0 delivery1. Eliminate technical bottlenecks.2. Work with provider to get later cutoff times.3. Get your stuff closer to the customer.4. If you can’t speed up, be clear aboutdelivery times…and beat them.Proprietary and ConfidentialDo not distribute
"We want to removeas much friction aspossible from theshopping experience,while helpingconsumers save timeand money, and wethink the BufferBoxteam has a lot of greatideas around how todo that.“-Google Spokesperson
New Standards for Modern Order Fulfillment Operations• Deliver the perfect order.• Reduce the time to delivery.• Offer flexible, convenient delivery options.• Provide accurate and timely information aboutyour order.• Improve your ability to WOW consumers.Proprietary and ConfidentialDo not distribute
Four questions to ask about your fulfillment process?1. What are you doing to increase order accuracy?2. What can we do to increase speed to delivery?3. What can we do to control our shipping costs?4. What can you do to improve the availability andtimeliness of data for my consumers?Proprietary and ConfidentialDo not distribute