UK consumers are demanding same-day and next-day delivery in greater numbers, and e-tailers are turning to fulfilment 3PLs to make it possible

April 16, 2014

The e-commerce market is expanding rapidly in the UK (as in the rest of the world), and online customers are demanding express delivery much more often that has previously been the case.

So how can 3PLs help businesses with their order fulfilment ?

It seems that what online shoppers want most is speed and convenience. That’s why they use the internet in the first place. In fact, next day delivery is the fastest growing delivery option by far, and the segment of the delivery sector that offers it grew nearly 30% in the last four years. As it stands, next day delivery accounts for more than 2/3 of the consumer delivery market.

Because consumers are much more picky about delivery performance than businesses, the delivery market is shifting to specific time windows, rather than the traditional 24 or 48 hour windows. This is much more convenient for the consumer, but it is also more expensive. Not only does the courier service cost more, but the individual e-tailer has to respond to orders almost instantly to get the product on its way in time. This precludes just batching all of the orders at the end of the day, and disrupts the rest of the workday. I don’t need to tell you how your customers feel about paying one penny more for delivery that your cheapest competitor though, do I?

Where does that leave E-commerce businesses?

So that leaves the e-commerce seller in a tight spot. Their market demands more expensive service without a price increase. More and more, small e-commerce businesses are turning to 3PLs to handle their order fulfilment, or even their entire logistics process, including supply chain management, pick and pack, order fulfilment, response handling, rework of products or hand finishing and enclosing. It seems that 3PLs can offer these services at a lower cost that most businesses can manage in-house, and are better able to meet the kind of rapid turn-around times that same- and next-day delivery requires.

Order integration and warehouse management

The real strengths of a good fulfilment 3PL are omni-channel order integration, high-volume discounts, and the ability to dedicate a flexible amount of warehousing space to each of their ecommerce clients. It is a success as a business model because they can literally offer a better level of performance at a lower actual cost than most small or medium sized e-commerce operations could manage in-house.

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