Retailers need to extend product range quickly and cost-effectively to keep pace with customer expectations, but extending product range via existing warehouses comes with plenty of limitations including the risk of being left with excess stock.
When Internet Retailing asked major retailers across Europe what the main obstacles were to extending range, the most commonly cited issue was logistics. Respondents cited the overall lack of warehousing space and the dangers of hanging onto slow-moving or unwanted stock as well as the difficulties of forecasting demand. Transparency was also an issue, with some saying that they were unable to get accurate data on the availability of delivery slots. Drop shipping with a trusted partner can help retailers overcome these challenges.
Drop shipping is a valuable growth lever
Drop ship allows retailers to offer product categories and specialist items outside of their core offering. It also helps protect the customer experience in times of surging online demand; rather than the customer having to wait longer for their parcel to arrive due to capacity constraints, the order can be rerouted to another supplier who can meet the retailer’s delivery standard.
The pressure to offer a wide, relevant range online will grow. While retailers understand the importance of expanding range, doing it at scale has become a barrier. Drop ship can help retailers scale, mitigate the risks of limited product assortment, and coordinate the logistics to maximise revenue streams.
Three key benefits of drop ship:
1. Access to a virtual warehouse network in key product categories. CommerceHub’s vast network of more than 15,000 distributors gives retailers access to inventory that’s closer to customers, wherever they might be. This provides the ability to expand range for popular items during peak times.
2. Fulfilment expertise. Retailers gain access to tools and processes that enable visibility to maintain shipping and delivery requiremenst, without sacrificing order fulfillment accuracy. CommerceHub has a 99% order fulfill rate.
3. Protecting the customer experience. Retailers can ensure their own standards for drop-ship suppliers to meet their brand promise. Drop-ship programs, when executed correctly, can improve the customer experience— increase customer retention and average order value.
Learn how we can strategically expand your product range and scale your supply chain. Contact us.