Fulfillment is the New Battleground in E-Commerce

Thanks to Amazon.com, a customer’s online buying experience is every bit as important as the item that’s acquired. E-commerce b2b capabilities have been lagging b2c, prompting companies to look for ways they can provide fast, accurate and inexpensive delivery options.

Innovators have been looking at the logistics space where there’s lots of opportunity for improvement (See High-Tech Tackles Logistics). “Shipping is the new battleground,” said Sean Wilcox, vice president of marketing for software as a service (SaaS) provider GrandCanals. “It’s no longer price and assortment. Customers will buy an item that’s not in the color or brand they want because it comes from Amazon.”

Sean Wilcox, GrandCanals

Logistics is an $8 trillion-dollar global industry, according to Transparency Market Research. Turvo, which recently launched a collaborative logistics platform for shippers, brokers and carriers, said the industry is plagued by complexity and chaos. “Communication is done through back and forth phone calls, emails, and faxes which is inefficient and error-prone,” according to Turvo. Many of the companies jumping into the logistics space believe visibility and data analytics are ways of improving efficiency.

GrandCanals’ cloud-based service uses data analytics to maximize a company’s fulfillment capabilities. “We can ensure you are informed and positioned correctly to fulfill your customers’ expectations,” said Omar Akilah, GrandCanals vice president for products. Some customers may expect the lowest cost; others may emphasize the speed of delivery. “We’re helping customers leverage fulfillment as a differentiator,” said Akilah.

There are millions of ways shipping and airline services; truck fleets and freight forwarders; third-party logistics providers and package delivery services can be combined to deliver a parcel quickly, correctly and at reasonable cost. In addition to the expectations set by Amazon, mobile shopping applications and millennials have changed the rules of fulfillment, said Wilcox. By 2016, he said, three to four days was not considered fast enough for today’s online buyers.

Among the reasons b2b sites have been lagging in the delivery game are legacy infrastructure and fulfillment relationships. GrandCanals analyzes a customer's carrier and delivery data; internal shipping costs and external pricing; order history; delivery locations (including any seasonality); and transit time to help companies optimize their fulfillment process.

One client of GrandCanals had a long-term relationship with a national carrier. An analysis revealed the customer’s demand was on the West Coast. “By applying a regional carrier on the West Coast rather than a national carrier we were able to save the client significant money,” said Wilcox. “Now they only use the national carrier when they have to ship to the Midwest or East Coast.”

Omar Akilah, GrandCanals

“We’ve seen companies where there are too many shipping options and shipping costs that are based on weight,” added Akilah. “Most customers have no idea what an item weighs. More is not better.”

Setting accurate and acceptable expectations for delivery can mean the difference between a sale and a lost customer, Akilah said. “It is no longer enough to provide vague ranges of delivery days or order processing times.”

Capturing relevant deep data from customers is no longer a time-consuming task, the GrandCanals executives pointed out. “When I log on [to Amazon] they already know so much about me they can cater to my experience,” said Akilah. “They know my buying pattern, if I’m a discount shipper or a loyal shopper—all this is being learned through data analytics.” For example, location analysis, said Wilcox, helps determine the best route between a warehouse and a customer. If a company is trying to achieve overnight delivery, GrandCanals finds the optimum combination of service providers. “We can utilize almost anything that’s out there, including Uber, to manage ‘last mile’ delivery,” Wilcox said.

GrandCanals is technology-agnostic, the executives said, and can provide a number of advantages to small and midsized companies playing in the b2b space. “Amazon uses the urgency-to-buy tactic to increase shopping cart conversions: eg, in their product page, (even before the shopping cart), they say '3 left' and 'order in the next hour and receive it tomorrow for $x,' Wilcox explained. “This has been proven to increase sales, but requires knowledge of inventory, delivery history, and accurate costs. GrandCanals' goal is to provide this type of capability to all e-commerce companies, not just those with Amazon-sized budgets. “