How to Safeguard Your Fulfillment Strategy from Pandemics and Disasters
We all know that pandemics and similar disasters are inevitable. Four years before COVID-19, Bill Gates was warning how it was just a matter of time before a viral pandemic swept the world. Despite the warnings, the Coronavirus pandemic has steamrolled through our health, financial, social, and commerce systems.
For example, according to the UN, tourism revenue so far has fallen some US$910 billion and reduced global GDP by 1.5-2.8%. Travel fell 48% from 2019, a loss of $40.2 billion in the US alone. In construction, 40% of firms have had to lay off workers.
However, fulfillment and shipping services have had an interesting bitter-sweet relationship with the pandemic. At first, retail and food services fell 7.7% between February and April. More stats show that by Q3 of 2020, 52% of DTC (direct to consumer) brands reported a surge in demand while 80% of traditional retailers have experienced a decline in sales.
What this information is telling us is that consumer behavior has shifted. More importantly, fulfillment and shipping services have experienced a major change with soaring demand and repressed transport services.
While many eCommerce operations have benefited from the pandemic, fulfillment has proved to be the weak link. Only those businesses that adapted fast to the unprecedented impact of COVID-19 are thriving now, almost a year down the line. The truth is the pandemic has been a wake-up call to retailers and shipping merchants to recalibrate and safeguard their fulfillment strategies from such disasters now and in the future.
Ensure That Your Warehouse Operations are COVID Compliant
The first priority should be safeguarding your workforce. At times of disaster, human capital becomes the most important factor in driving the industry and managing change. So far, the government has issued many guidelines through agencies such as the CDC. These guidelines detail how to protect people from infection through distancing, testing, monitoring, and personal protection measures.
To ensure that your facility is compliant with these official directives, ensure that you:
- Perform routine cleaning and/or disinfection of frequently touched surfaces
- Provide and ensure the use of personal protective equipment (PPE) such as gloves to workers in direct contact with frequently touched surfaces and packages
- Provide adequate handwashing stations and alcohol-based sanitizers with at least 60% alcohol solution. Use touch-free stations where possible
- Ensure that workers, customers, and contractors don't come nearer than 6ft of each other. Minimize contact through measures such as staggering shifts, limiting access to common areas, encouraging single-file traffic, and using barriers such as plastic dividers
- Encourage sick employees to stay at home if they or someone close to them is sick with reprisals
- Implement temperature taking and regular monitoring of all who go through your doors to catch suspected cases of COVID-19
Make Sure Fulfillment Operations are Functioning on All Cylinders
When the stay-at-home and travel measures hit, Amazon immediately implemented changes to its FBA program and communicated the same to merchants. Essentially, the company was concentrating its delivery efforts on essential items. Fulfillment for non-essential or luxury goods was discontinued.
That happened because as more and more people are shopping online, the pressure on fulfillment and shipping services has become immense. At one point, it would take almost a month for non-essential items to arrive at the customer's doorstep. Amazon took those steps to ensure fast delivery where it matters most, and it worked.
In the same way, you can take this opportunity to outperform competitors by fine-tuning your fulfillment strategy. However, with FBA out of the equation, merchants have been left to deal with the challenges of merchant fulfillment.
There is a better option that has proven immensely effective during the pandemic. Third-party fulfillment services were already in existence, but they have gained prominence during this COVID-19 period. Because they don't rely only on mainstream shipping, these 3rd parties have remained vibrant and can offer significantly better delivery services than anyone else.
Unless shipping is a core function of your business, outsourcing your fulfillment needs to third-parties is the way to rise to the occasion and outshine the competition.
Plus, the right fulfillment partner will also be able to offer direct integrations with your selling platform and friendly pricing terms on all kinds of packages that you ship.
Make Sure You Have Fulfillment Backups
When Amazon shut down non-essential sellers on their platform or barred them from using FBA, another major flaw in the system was brought into sharp contrast. Relying on one fulfillment service provider, no matter how reliable, is a disaster waiting to happen.
The only way to protect yourself is to diversify your sales and fulfillment channels and also implement inventory control. This three-pronged approach allows you to absorb the impacts of unexpected shocks by shifting to redundant systems. For example, you can also sell on your own eCommerce site and channels like Instagram instead of relying on Amazon alone.
In the same way, having diverse fulfillment channels shields you in case any one of them fails. A third-party fulfillment center acts not only as a more convenient option for your clients when mainstream channels are overwhelmed, but it also provides an extra layer of redundancy.
Finally, make sure that your inventory control processes are top-notch. When transportation is disrupted, delays in supply and logistics are common. Having buffer stock levels where possible will keep you from going out of stock and let you maintain a constant supply to customers. Multiple suppliers will also help to protect you from breaks in the supply chain.
Be Prepared to Shine on Customer Service
When disasters such as the coronavirus pandemic happen, issues will arise no matter how proactive you are. There will be delays in delivery, missing inventory, inadequate labor, etc. One way to rise above them is to take a proactive stance on customer service.
What this means is that you should be prepared to engage your customers more transparently through constant and honest communication about the state of delivery, stock availability, expected delays, price changes, and anything else that comes up.
Learn, Evolve, and Strategize to Protect Your Business from Disasters
We don't like them, but disasters are a constant that we must all contend with. If it's not a pandemic, it can be an earthquake or war. Our best chance has always been the ability to change, adapt, and evolve to meet the situation at hand.
COVID-19 has taught business people and company executives valuable lessons about dealing with change, and we will all do well to keep them in mind. Every business that provides or relies on fulfillment services can anticipate the scale of future disruptions and put in place adequate strategies to deal with them. Learn and evolve, that's how you survive and thrive.
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