E-commerce value will exceed $4 trillion by 2025, and demand for e-commerce requires seamless integration between traditional shipping practices and an e-commerce shipping plan. Unfortunately, e-commerce is incredibly complex. Its global nature makes conventional shipping strategies inefficient and utterly unworkable. Instead of trying to start from scratch, shippers need to know a few things about the challenges of integrating traditional with e-commerce shipping, why integration is key to success and the best practices necessary to avoid additional issues.
Challenges in Integrating an E-Commerce Shipping Plan
A primary issue in integrating e-commerce shipping goes back to the extent of current shipping practices. The warehouse management system (WMS), e-commerce platform, vendor systems and more may already be integrated. Although efficient, traditional shipping practices are crafted to handle weekly or biweekly shipments. In the era of e-commerce, this is unacceptable. Customers expect orders within the same time frames as Amazon, increasing freight spend. This is in addition to other challenges, like international trade laws, customs clearances, political issues and more.
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Why Integration Is Key to Success
Since those integrating e-commerce into existing brick-and-mortar operations have experience in physical spaces, such expertise can be leveraged to incorporate new e-commerce shipping strategies. Critical components of a successful e-commerce shipping strategy asserts John Costanzo of Parcel Magazine, include:
- Visibility into warehouse and inventory management.
- Access to multi-modal shipping and drop shipping options.
- Seamless transportation by carriers.
- Superior last mile delivery.
- Effective returns management.
Each area reflects a focus point for integration. Since e-commerce offers the opportunities of sustained growth and higher profitability, shippers must integrate each aspect of the e-commerce strategy with all existing platforms and systems. This includes the enterprise resource planning (ERP) system, as well as any other systems used in the supply chain.
Best Practices to Integrate an E-Commerce Shipping Plan With Existing Shipping Practices
Finding a path to e-commerce success includes two priorities—identifying the needs of your supply chain and meeting the needs of customers. Everything goes back to these needs. So, integration should focus on how each area can be improved to meet these fundamental needs. To handle the transition to and use of an e-commerce shipping plan, shippers should follow these best practices:
- Recognize the current limitations of existing systems. Outdated software and disconnected data contribute to problems in managing inventory and integrating systems. Older, disjointed systems may be incompatible with modern e-commerce shipping platforms. As a result, shippers should first identify the limitations of their systems and begin the process of finding a new system. Although this may take years in traditional settings, reports Hanover Research, modern service providers, like a third-party logistics provider (3PL) or even a third-party integrator (3PI), can streamline the selection, implementation and change management necessary.
- Use omnichannel fulfillment to handle e-commerce. Since brick-and-mortar stores already have a physical footprint, these locations can be used to fulfill orders from the store, offer in-store pickup and manage inventory more efficiently. However, it is impractical to fulfill all orders from a brick-and-mortar storefront due to the increased number of SKUs. Shippers should consider working to expand warehousing, open more locations or take advantage of additional services, like dropshipping. Drop shipping allows shippers to move the fulfillment process to vendors, explains Magento, but they may sacrifice some quality control in this process. Thoroughly vet all vendors that will engage in drop shipping to prevent losses in product quality. Some e-commerce shipping solutions, like Cerasis, can integrate seamlessly with dropshipping and e-commerce shopping carts, including Magento, Magento 2, Shopify, Woo Commerce, and PrestaShop.
- Emphasize last mile success. Approximately 28 percent of transportation spending is devoted to last mile delivery. They are essential to getting a product to consumers as expected. The best-laid plans for e-commerce shipping strategy will fail without the right last mile delivery standards. Carriers should be able to handle multiple types of last mile delivery needs, including in-apartment delivery, delivery to office buildings, home delivery and more.
- Select the right returns management strategy. Although you may accept returns in brick-and-mortar stores, customers may want additional options, including shipping returns. This may be an area where outsourcing to a logistics provider can help.
- Choose carriers with established, cross-border trade routes. Since e-commerce can easily involve international trade, it is important to consider cross-border trade routes and benefits. Carriers may have developed, preauthorization protocols that can speed cross-border trade. You may also consider establishing warehousing networks and distribution centers in countries with higher e-commerce sales, such as Canada.
- Stay flexible. E-commerce needs can change within seconds, so scalability and flexibility are essential aspects of any e-commerce shipping strategy. Make sure your carriers and service providers can scale and adapt to the evolving needs.
The Big Picture
E-commerce is not going away. There may be as many as 1 million e-commerce businesses around the globe. Up to 1.3 million may exist within North American trade alone. Since e-commerce is vital to success in the digital age, shippers must embrace the e-commerce revolution and implement strong e-commerce shipping practices. Of course, these practices fall back on building positive customer experiences and enhancing the needs of your supply chain. Essentially, integration is your new best friend in the e-commerce-driven world.