A Brief Guide To Retail Logistics
Are you having your orders delivered right to your doorstep? How about ordering food and clothing online and making curbside pickups? If so, then you probably have an idea of how retail logistics work.
These days, more and more customers expect a more efficient and seamless experience from your brand. This involves providing transportation and shipping options and meeting with them wherever they are.
Retail logistics simplifies and modernizes different supply chain stages of eCommerce to ensure smooth-sailing and efficient business operations. These operations range from securing inventory flow to ensuring an on-time shipping process.
As the sales in eCommerce continue to increase, digital retailers must reconsider and reevaluate their retail logistics strategies. This is crucial to meet consumer demands, offer quicker and easier delivery options, reduce transportation costs, and revamp overall customer experiences.
In this article, you’ll discover everything you need to know about retail logistics, including the process and some tips to improve your logistics operations. You can also use this guide if you’re planning to become an independent freight agent in addition to your professional training with experts in the logistics industry.
What Is Retail Logistics?
Retail logistics encompasses all inbound and outbound operations necessary for the efficient flow of finished goods from a manufacturer to its end-users. Implementing an effective retail logistics strategy is crucial for unceasing direct-to-consumer (DTC) retail operations.
Different stages of retail logistics involve material receiving, warehouse management, order fulfillment, and product shipping. Each stage of the process has to be revitalized to meet consumer expectations with efficient and economical delivery.
This means both labor and supply chain technology may be required to have functional retail logistics. However, this may contribute to high logistics expenses. This is why DTC retailers often outsource logistics operations from a third-party company to save on expenses and time.
What Are The Functions Of Retail Logistics?
At first glance, fulfilling customer orders may seem pretty simple and spot-on. You grab the items, box them up, and deliver the package to where they need to go. Sounds plain and easy, right? But the reality is that many processes are involved in a simple supply chain. These include:
Inventory procurement is the process of sourcing materials on time to meet customer demands and expectations. It affects how your eCommerce retail activities can be executed accordingly. These activities include inventory management, sales, and product distribution.
Knowing what happens in the procurement process may help you create a better plan to achieve a more sustainable and efficient supply chain. For example, instead of seeing procurement as a disconnected part of your logistics process, think of it as the initial—and most crucial—stage of managing logistic operations.
Receiving And Processing Inventory
To fulfill customer orders, your goods should be received and processed first. This involves unloading and checking incoming inventory, which is then documented before storage.
Receiving and processing inventory is extremely crucial to the success of your retail logistics operation. Apart from enabling speed and efficiency in product fulfillment, it also ensures that items being received match what has been ordered.
Distribution is the process of shipping inventory to multiple fulfillment centers or warehouses instead of a single facility. The principle behind this method is quite simple: it allows your products to be closer to the end-users. This makes it an effective technique to reduce delivery time—as well as lower shipping costs at the same time.
Because distance significantly affects the prices of retail orders, the lesser the distance a package needs to travel, the lower the cost customers need to pay. This is similar to booking carpool services like Lyft and Uber, where farther destinations mean higher costs.
Understand this: an efficient and cost-effective order fulfillment strategy is crucial and directly affects customer satisfaction. Once a customer clicks the ‘Order Now’ button, their information is validated, and ordered products will be packaged and picked up as soon as possible. This process is also known as order-to-cash (O2C).
During the O2C process, accounting and inventory management tasks must proceed. These include locating available items in the inventory and accepting customer payments. If you collaborate with a third-party fulfillment company, ordering and fulfillment tasks will be automated. This ensures that the orders are packed securely and shipped immediately.
Tracking Inventory And Orders
Across the entire supply chain, it’s crucial to have a system that would allow you to manage and monitor your inventory in real-time. Without it, you won’t be able to maintain appropriate stock levels and replenish your stocks to meet customer demands without going beyond the optimum range and increasing inventory costs.
Aside from tracking inventory, you also need to track customer orders. You may use digital tracking apps to effectively monitor shipments and orders in real-time. Also, it provides your customers with tracking information they can use to determine when their packages will arrive.
Once the customer’s orders are packed, they’ll be shipped immediately. If you have fulfillment facilities or multiple warehouses, orders will be delivered to these locations that are closer to your customers. For this to be effective, an effective shipping strategy is extremely important. This will help maintain customer loyalty and satisfaction. A compelling shipping strategy often combines different methods and collaboration with various carriers.
What Are The Tips To Improve Retail Logistics Operations?
Now that you know how retail logistics works, it’s time to find out how to improve it. Below are the tips that may help you take your logistics operations to the next level.
- Embrace Automation: Automation will help reduce repetitive manual tasks that consume your time and cost your business more. Doing so will help ensure that orders will be shipped as soon as possible.
- Treat Drivers Well: Drivers play a crucial role throughout the logistic process. So, make sure to pay them well and let them have a balanced work and life to encourage them to perform better.
- Use Mobile Tools: This allows drivers to send critical documents in real-time, speeding up the entire logistic process. It also helps provide them with the right directions to reach the right destination at the right time.
Retail logistics encompasses a wide range of operations, including managing inventory, receiving and processing orders, and shipping orders. Now that you know how retail logistics works, it’s time for you to create and implement a compelling strategy that’ll help you ensure fast and proper shipping of your orders. In this way, customers will be happy and completely satisfied.