Recently I was asked to put together a list of considerations for functional and operational requirements for setting up a business-to-consumer (B2C) (or Direct-to-Consumer, DTC) fulfilment operation for a UK retailer. This was to initially to drive discussion with the leadership team but would also form the basis for the developing business requirements for the fulfilment function.
As a starter for 10, the retailer was looking to simply extend their store replenishment operation to also handle B2C fulfilment – but this is not a good idea. I will explain in a separate post why.
Key Considerations for a B2C fulfilment operation
- B2C retail primarily sells products in single item units however the products may be sourced from suppliers or manufacturers in pack quantities or similar.
- Use of the ‘Availability to Promise’ to manage stock levels and allocate to customer orders
- Ability to handle back orders and pre-orders
- Stock availability is provided to the website when the customer is browsing, then checked again and reserved during the checkout process.
Product types and identifiers
- Ability to uniquely identify one item from another within a warehouse. For example, a supplier may use the same unique product number to identify an item that is distinct, by colour. Your warehouse must be able to uniquely differentiate these for ordering and picking.
- Products with variation in size will need to be stocked and ordered separately.
- High value items will need to be secured and controlled within warehouse environment to prevent theft
- Fragile items will need to be stored and have handling processes to minimise damage.
In addition, the units in which products are sold may have different requirements:
- Kits (separately stocked items that cannot be sold separately) and bundles (similar but can be sold separately) – are expected to be delivered to the customer together.
- Make to Order items (typically furniture or curtains) will have bespoke stocking and picking requirements.
Pick, Pack and Despatch
- High volume, small size orders – each customer order may only contain a few SKUs, so the warehouse operation must be able to support this through resourcing and layout
- Pick waving –prioritisation of picking based on delivery promise to the customer
- Same day pick and despatch for same day/next day delivery.
- Depending on the size of the warehouse, each customer order (or even the parcels within the order) are typically picked individually.
- Operating procedures must be in place to ensure pick accuracy for each order
- Each order must be packed in to ensure the product arrives in perfect condition to the customer
- Ability to stop or hold orders based on results of a fraud check.
- Value added services: gift message, gift wrap etc.
- Carrier selection and label printing (wider range of products and/or delivery options usually require more than one carrier to be used)
- Customer delivery address must be compliant with addressing rules to ensure successful delivery
- Advising of despatch to customer to the customer by email or SMS.
- Delivery Options: same day delivery, next day, timeslots, scheduled day, etc etc (replenishment usually has a standard schedule)
- Range of carriers – delivery of specialist products (white glove), delivery cost efficiencies vary by package size and weight and order value, (e.g. delivery of make-up (Royal Mail) vs.
- Automated parcel tracking from point of despatch to delivery
Customer Returns Management
- Separate area within warehouse is required for receiving and processing customer returns (both registered and blind returns)
- Ability to capture details about a customer return condition and the customer’s desired return action for each returned item
Reporting and KPIs
Performance measures and reports for B2C are somewhat different as the focus is on individual fulfilled orders and on-time delivery to customer.
Sales and delivery to international addresses has additional requirements that must be considered within the warehouse environment. These include:
- Delivery address that is printed on the label may need to be compliant to ensure successful international delivery. Use international address verification to help ensure address accuracy.
- Destination delivery country may have additional customs documentation that may need to be produced and put on the parcel