Despite a global economic slowdown, business-to-consumer online sales continue to grow at double-digit percentage rates. Traditional, brick-and-mortar retailers have watched their online stores year-to-year results skyrocket while flagship physical locations flounder. Retail industry analysts attribute the success of online sales to more than just cost savings. The quality of the online shopping experience and the speed of order fulfillment can make visiting an online merchant more pleasurable and more efficient than making a purchase in person.

Product Fulfillment Efficiency Improves Shopper Loyalty

Online shoppers demand fast shipping, easy product selection, and competitive pricing. Major e-commerce Web sites, like Amazon.com and Buy.com, helped define the online purchasing experience by offering vast selections of products with consistent shipping processes. Because very few retailers can afford the major infrastructure investments of those early movers, product fulfillment companies can help get new shopping sites off the ground quickly.

By tying online ordering and merchant payment authorizations directly to fulfillment centers, even small retailers can emulate the quick turnaround time of the major players in the business. Splitting shipping duties across multiple fulfillment centers can cut shipping times while reducing reliance on more expensive air freight services. Many fulfillment companies now offer secured returns processing departments, ensuring that product can be processed both into and out of third-party facilities without ever needing to land inside a companys offices.

Direct Fulfillment Services Impact Shopping Experience

Endcaps and in-store positioning have been staples of the retail buying experience for decades. Savvy product merchandisers understand how to stage items throughout a brick-and-mortar store to encourage more purchases. Online marketers have amplified the same strategy, using product recommendations and accurate search technology to replicate the "impulse buy" online. Direct fulfillment services fuel shoppers impulse buying habits by offering faster access to niche products.

The integration of drop shipping technology directly into e-commerce Web sites has revolutionized the online impulse buying experience. Retailers can offer highly specialized product lines from niche manufacturers without ever owning product or tying up warehouse space. Manufacturers simply use their own fulfillment centers to ship requested products on-demand. This direct fulfillment strategy reduces shipping costs by moving product directly from the source to the customer, without requiring a pit stop at a retailers order fulfillment facility. Using drop shipping to complement a retailers core inventory puts less strain on their cash flow, reducing overhead and allowing marketers to post even more competitive prices.

When online retailers integrate fulfillment services into their operations effectively, customers experience nothing but a seamless, branded, enjoyable experience. Shoppers attribute lower prices on their favorite goods to aggressive competition, not necessarily to the lower overhead required to facilitate fast, accurate shipping. Relying on fulfillment centers to handle customer orders also allows retailers to focus their teams on enhancing the online shopping experience in other ways. By developing core competencies around building customer loyalty and encouraging more frequent impulse purchasing, retailers can cultivate even more growth from B2C online sales.

Sources

BusinessWeek

Infosys