The Importance of Digital Investment For 3PLs

By Rob Hodgson, WMS Fulfilment Expert
Digital Investment Blog 1 915X519

With additional challenges being caused as a result of the current supply chain issues, driver shortages and the biggest ever peak season expected just around the corner, expectations of 3PLs are ever increasing. 


Working more efficiently has never been more important, which is why many online retailers are looking to outsource their logistics and partner with a 3PL that can offer streamlined fulfilment and shipping solutions as they look to keep ahead of growing demand. 


In order to stand out from competitors, 3PLs and fulfilment houses should look into implementing technology such as an order management system (OMS), as this will allow them to make more informed and calculated decisions – whether it be around inventory, returns processes or even selecting the best courier for the job. By being able to automate tasks and save time as well as reduce errors – you’ll have a unique selling point to add to your services when retaining existing clients or attracting new ones. 


As a result of these increased expectations, implementing technology is not only key for 3PLs to survive (and thrive) but will continue to shape the industry for years to come.


How to best serve you clients – and their customers 

Ease and convenience are the top differentiators for top E-commerce brands, so ensuring a hassle-free customer buying journey is key to ensuring repeat orders. Many online retailers are changing their strategies to be able to meet their customers where they are shopping as the ability to shop 24/7 is part of E-commerce’s growth. 


Outsourcing logistics to a third-party logistics (3PL) provider is a popular solution amongst online retailers as it helps to keep orders moving. To stand out from the crowd as 3PL, being able to offer services that your competitors don’t is key – meaning that transitioning into a tech-led business is what will deem your 3PL offering as cutting edge in terms of helping E-commerce businesses meet customer demand. 


To best serve customers, orders must be completed efficiently – this means speed and accuracy are pivotal. In an era where competition is high, customer loyalty is becoming hard to retain. Something as small as a payment error, missed order or delivery issue can be enough to lose customer loyalty these days. By investing in technology and being able to automate time consuming tasks and processes means delivering great customer experiences will be made easier – meaning you’ll keep your client happy by ensuring their customers are satisfied with accurate and speedy deliveries. 


Enhancing your offerings 

It’s important to remember that being ‘just a warehouse’ is no longer enough; we need to be forward thinking technology entities with an end goal of connecting lots of different people and services throughout the process. A technology focused approach means selling the systems you use and the benefits they have, not the space you have – from courier integration capabilities, to automated shipping notes. 


As mentioned earlier, with more consumers now shopping online, E-commerce businesses are beginning to sell on multiple marketplaces such as Amazon, eBay and Shopify – meaning orders will be coming through fast. 


Online retailers need support in fulfilling and shipping these orders – whilst keeping stock levels updated to avoid overselling items – which is why 3PLs must adapt and strive to focus on interconnectivity. Connecting the dots and being able to offer the whole process – from storing, picking and packing products, to getting them to the customer – is what your new wave of clients will be looking for. 


Transitioning into a tech-led business by investing in software will incur an upfront cost and some extra work to begin with, but it will enable you to put yourself ahead of your competitors. Retailers are looking for convenience and quick turnarounds – not just the cheapest service – as they understand that outsourcing their fulfilment saves them time (and money) in the long run – and will also help to establish customer loyalty and repeat orders. 


Don’t get left behind

Warehouse management has been brought front and centre as a result of the pandemic and therefore transitioning to a technology entity whilst positioning yourself as a leader in tech – and less of ‘empty storage space’ provider – is what will help you to stay ahead of the game in the current climate.


Most online retailers are fully aware of the benefits that partnering with a 3PL has – it helps with order fulfilment by eliminating strain often caused by receiving, pick, packing and shipping orders.


In addition to helping with fulfilment, online retailers are also looking for 3PL partners to take care of time-consuming processes when it comes to shipping orders, so this is a factor they’ll look for when looking to onboard a partner so don’t get left behind by not offering services that meet the basic expectations of your core market. Online shoppers now choose convenience over brand loyalty, meaning how orders are picked and packaged, delivery costs and timings, and ease of returns all matter. Using a 3PL which has invested in technology allows online retailers to deliver a more responsive and consistent service. Customers want fast, accurate deliveries and by having the relevant technology and an innovative order management system, you’ll be able to offer your clients access to a large network of couriers – something that will make you stand out over competitors. 


E-commerce businesses are increasingly looking for support when it comes to documentation, customs, duties and other issues that come up at the borders which might delay shipments and result in high costs if not done thoroughly. 3PLs and fulfilment houses can easily offer this as a streamlined service through the implementation of technology which automatically provides all the commercial invoice data and produces commercial invoices for various countries – including non-EU destinations. 


The demand for E-commerce has inherently affected logistics, meaning the expectation of 3PLs to provide only space and shelves is no longer, and there is a huge opportunity to provide more. 3PLs that provide very little additional value to their clients will quickly see themselves replaced by industry competitors who have adapted by investing in technology that will get the job done more efficiently and thus reducing costs, whilst providing more visibility for clients.


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