Rapid delivery is more than a convenient option in today’s competitive consumer marketplace. Quick and efficient product delivery is a modern ecommerce expectation that is proving crucial for differentiation, and in order to thrive brands need to source, store and ship products close to their end consumer for optimal cost savings.
According to McKinsey, 75% of retailers plan to build out fulfillment networks in order to offer two-day or faster delivery, and 42% expect to achieve one-day delivery by the end of 2022. While that sounds great for consumers, execution will continue to remain elusive for many brands that lack the massive budgets and fulfillment networks of Amazon, Walmart, and other retail giants.
The good news? You don’t need to contract with multiple 3PLs or set up an in-house fulfillment team. Instead, look to fulfillment networks that enable you to offer the fast, efficient, sustainable delivery options your customers expect. Here are four reasons why you need a fulfillment network:
1. Fulfillment networks fast track brands’ ability to scale
Expanding fulfillment networks and optimizing supply chains requires bringing the delivery lanes closer to the end customer, but doing so doesn’t require spending millions on real estate in warehouse districts all over the country.
With 33M square feet of fulfillment space across more than 130 locations nationwide, Flowspace identifies the optimal locations for every brand and provides tools to manage distributed operations from a single point of integration, eliminating the need for multiple 3PLs and associated costs.
The flexibility to add or remove nodes within a network is crucial when it comes to scale and cost savings. In fact, Flowspace benchmark data shows that a brand shifting from a single location to three optimally located fulfillment locations will reduce their average shipping zone by half.
2. The need for speed will only intensify
Modern consumers want everything yesterday. In fact, more than 90% of American consumers see two to three day shipping as standard, with 30% expecting same-day delivery offerings. That translates into constant and consistent pressure on retail supply chains and fulfillment networks that handle order intake, shipping, delivery and returns.
As speedy delivery expectations accelerate, distributed fulfillment networks empower brands like Reel Paper to offer the fast, efficient shipping options their customers demand.
“The reality of today is that everyone wants everything yesterday. Thanks to Amazon, next-day and free shipping options are standard. Being able to meet that demand, because of the Flowspace network, is huge. It puts us on par with Amazon-level service and gives us a leg up on other brands.” – Hector Omoigui, senior operations manager, Reel Paper
3. Sustainability is a priority from click to delivery
The supply chain accounts for 95% of a retailer’s overall carbon footprint, and many, including Walmart and Rothy’s, are redesigning operations to ensure their supply chains are sources of sustainability versus drags on progress. Consumers demand sustainable products from sustainable retailers, and as more brands publicly pivot to meet this need, they are putting pressure on network partners, from fulfillment warehouses to delivery fleets, to decrease their footprints as well.
While carbon emissions from online shopping are 36% lower, on average, than those produced by in-store trips, transportation and delivery still takes a toll on the environment. The further a product has to travel to a consumer, the more pollution is created.
Per Flowspace benchmark data, brands can reduce shipping distance and related carbon emissions by up to 70% with three networked fulfillment locations.
4. Success means optimizing for time and money
Brands worldwide are facing global supply chain pressures, rising shipping costs, and intense competition, and the biggest opportunity for optimization lies within the way brands design their fulfillment networks to focus more on proximity rather than prowess.
It’s possible to save money and expand operations by eliminating reliance on legacy fulfillment operations, instead focusing on reducing shipping distance to optimize for speed and cost.
“In just four months since switching from a 3PL to Flowspace in order to fulfill our product closer to our end consumer, we have reduced shipping costs by more than half, even as we grow at a double-digit rate month after month.” – Kelsey Chabolla, director of logistics and supply chain, Sundays for Dogs
Fulfillment networks can and should be designed not only for speed, but to achieve cost-efficiency, sustainability, and scale that empowers you to deliver products quickly, affordably, and responsibly. Is your brand set up for success?
Get a Custom Network Optimization Study and understand how Flowspace can help you fulfill more efficiently and profitably.