How to scale your fulfilment capacity

The Online Retail in South Africa 2024 report, a study by World Wide Worx in partnership with Mastercard, Peach Payments and Ask Afrika, shows that 54.8% of South African consumers place a premium on items being in stock when orders are placed.

This factor places second only to customer service (73,9%) in terms of what online shoppers expect from their online buying experience.

“This suggests that consumers expect online retailers to have items readily available for purchase. A lack of stock can lead to frustration and may drive customers to seek alternatives, highlighting the need for retailers to manage inventory efficiently and update their stock levels in real-time to meet customer expectations,” the report notes.

Considering that South Africa's online retail sector surged to R71bn in 2023 – a 29% increase from 2022 - it is patently clear that local ecommerce businesses need to meet stock availability demand if they hope to cash in on the digital sales boom.

According to Jaco Roux, head of product at Bob Group, the first step to growing any online store is to conduct a thorough evaluation of current fulfilment processes. This includes reviewing order processing times, shipping accuracy and customer feedback.

“By understanding where your current system excels and where it falls short, you can identify specific areas that need improvement. Implementing a reliable inventory management system is also crucial, as it ensures your stock levels are accurate and helps prevent stock-out or overstock situations,” he says.

Very often there are signs that an ecommerce business will need to scale its fulfilment operations.

Among the key indicators are constant order backlogs, more customer complaints about delayed shipments, and operational bottlenecks.

“Rapid sales growth that outpaces your current fulfilment capacity is another clear sign that it’s time to scale up,” Roux adds. “Recognising these signs early allows you to proactively expand your capabilities before customer satisfaction is impacted.”

Communicating with customers about the status of their orders is crucial, Roux says.

“With real-time tracking and notifications, our offering informs customers about their order status and any potential delays that stem from stock availability, enhancing their overall experience,” Roux says.

He points out that implementing a real-time inventory management system helps maintain optimal stock levels and reduces the risk of stockouts or overstocking. The use of demand forecasting tools can also predict future sales trends and aid improved inventory planning.

A big part of this process is building solid relationships with reliable suppliers to ensure flexibility in inventory replenishment as demand rises. Regular inventory audits also help maintain accuracy and trust in inventory data, allowing for informed decision-making, he says.

South Africa’s ecommerce businesses need to recognise and implement well-run order fulfilment processes.

The reality is that customers will turn to competitors at the drop of a hat if they feel an online store is falling short in this area. In other words, a business’s future is very much determined by how it responds once the point of needing to scale has been reached.

Originally published on Bizcommunity
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