The Fulfillment Innovation Wheel: Distributed Fulfillment

Mar 3, 2021 | Blog, Fulfillment, The Fulfillment Innovation Wheel

ShipHero recently launched The Fulfillment Innovation Wheel to help 3PLs understand what capabilities and service offerings they need to implement in order to be successful and to help online retailers and brands choose which 3PL is right for them by allowing them to ‘check the boxes’.

The Fulfillment Innovation Wheel listed a set of twelve (12) capabilities that fulfillment providers and logistics companies should implement to continually delight their customers and push themselves towards greater success and innovation.

The twelve capabilities are:

In this article, we will be diving into Capability #7: Distributed fulfillment.

And be sure to stay tuned for future articles as we deep-dive into each capability.

Capability #7: Distributed Fulfillment

Quiz for the e-commerce gurus out there. Which of these two options makes more sense from a business standpoint: Deliver your products from nearby OR deliver your products from far away? Take your time, we all don’t have MBAs.

Businesses who want to reduce delivery times and keep costs low will opt to deliver their products from a nearby location, but as an online business reachable by customers all over the United States, how is that possible? The solution: Distributed Fulfillment.

Distributed Fulfillment is the secret to how the e-commerce giants can deliver free 1-2 day shipping nationwide, and the concept is simple: intelligently bring inventory and fulfillment centers closer to your customers.

The advantages of distributed fulfillment are:

Optimized Price and Delivery Speed

Reducing the distance between fulfillment centers and your customer’s doorstep leads to lower costs, faster delivery times, and reduced carbon emissions. This also allows your business to offer free shipping or guaranteed two-day shipping, which are huge online purchase drivers and pretty much the standard in today’s market.

Easy to Manage

With the right tools in place, managing your inventory is simple. Warehousing companies and fulfillment providers like ShipHero offer Warehouse Management Software (WMS) to give business owners complete oversight and control into their supply chain, so that they can make intelligent decisions on where to store their inventory and how to ship their product.

Reliable and Resilient Shipping

Don’t be at the mercy of mother nature or shipping bottlenecks from traditional carriers. Distributed fulfillment gives you a diversified and robust supply chain that you and your customers can rely on to ship, no matter the circumstance.

In-House vs. Outsourced

For all these reasons, e-commerce giants like Amazon and Walmart are successfully employing this logistics model for e-commerce fulfillment and retailers that piggyback off of their distributed fulfillment network seeing fantastic results.

For in-house fulfilment (i.e., creating a fulfillment network yourself), a high amount of initial capital is required to lease warehouse space across the country, distribute the inventory, then continuously monitor and optimize your inventory management and order fulfillment.

Luckily for small to medium-sized businesses looking to compete, 3PLs and outsourced fulfillment providers like ShipHero are creating massive distributed fulfillment networks around the country, and are ready to deliver your e-commerce.

Our customers love that ShipHero can easily offer 2-day shipping anywhere in the contiguous United States at simple and transparent pricing. We are also able to prioritize ground shipping, making for a resilient and eco-friendly supply chain. We attribute this success on the Fulfillment Innovation Wheel to Capability #7: Distributed Fulfillment.

Stay tuned next as we cover Capability #7: Resilient Shipping! Viva la Resilience. ShipHero.

Learn more about ShipHero’s industry-leading warehouse management software.

Does Free Gift With Purchase Actually Work?

Mar 1, 2021 | Blog, Warehouse Management Software

Today we venture deep into the minds of our customers to answer the age-old, controversial marketing question: does offering a “free gift with purchase” actually do anything?

Spoiler alert: yes, it does… but it doesn’t have the effect that you may expect.

Using case studies and scientific research, let’s look at the psychological effects of the free gift with purchase (GWP) to determine if it’s right for your business, or if there are more effective promotional campaigns.

The “Free Gift With Purchase” Effect

First, why do companies provide a free gift with purchase? What are they trying to achieve?

Online retailers that offer a free gift with purchase (GWP), which is less than 50% of companies, believe that the added value of a free gift will inspire repeat purchases, increase brand loyalty, and stimulate social and word-of-mouth advertising. Companies that offer free GWP include:

Kinder (confectionary) — free toy

Eileen Fisher (apparel) — free organic ditty bag

Bentley (cologne) — free chrome Bentley key ring

And more…

These case studies have been reported by companies that specialize in creating customized GWP for their clients, but do the benefits hold up under scientific scrutiny?

Does GWP Have Scientific Backing?

The answer… yes, but not how you’d expect.

As retailers constantly innovate promotional offers to provide more value to their customers, the “two items for the price of one” sales method has been framed using two distinct promotional tactics: the free gift, and the bundle… and it turns out how you frame the exact same deal actually has different psychological effects on your consumers.

For example, if your business sells household supplies, your promotions could be either:

“Buy a mop for $20, and get a bucket free!” — the free gift
“Buy a mop AND bucket for $20!” — the bundle

Studies have shown that bundle offerings and free gift offerings tend to influence the perceived value of products themselves, rather than their opinions of the company offering the gift. Also, the promotional frame has an impact on product return rates!

Effects of Gift with Purchase

With a free gift promotion, the “free item” or “gift” is perceived as less valuable by the customer, while the focal item is valued more. Therefore, customers are less likely to buy the free item after the sale, but more likely to purchase the main item.

Of course, the likelihood of repurchase is directly related to how effective the gift promotion is in increasing the value of the main item, so if that value increases to surpass the customer’s intrinsic repurchase threshold, then they will buy again.

Additionally, with a free gift promotion, customers are less likely to return an item, because the perceived loss of giving back a “free” item is too high.

Effects of Bundle

In a bundle promotion, the opposite is true. The main item is perceived as less valuable, while the bundled item is valued more. Therefore, customers are less likely to purchase the main item as a single item, but the supplementary item is more likely to be purchased as a standalone

With a bundled promotion, customers do not mind returning an item included in a bundle.

TLDR; offer free gift promotion if you want to reduce return rates and sell more of the main product at the expense of the gifted product; offer a bundle if you want to sell more of the supplementary product at the cost of the main product.

In Conclusion

The proven effects of “free gift with purchase” promotion are not proven to inspire net-increase in repeat purchases; rather, the promotion should be used to increase/decrease the perceived value of one focal item at the expense of a supplementary item. Also, the free gift promotion reduces actual return rates as well as the customer’s desire to return.

HOWEVER, these studies imply only the probability that customers purchase again, and this likelihood varies based on the personalization and relevance of the free gift and/or bundle.

That’s why there exists a vast amount of consumer data analysis tools and companies that make large profits off of customized gifts with purchase.

P.S. Children are the Future… of GWP

There does exist a customer group where the free gift with purchase has had immense, proven success: with products geared towards children.

You’re certainly familiar with the Happy Meal toy, which was so effective at marketing to children that McDonald’s was sued by a California mother in 2010 who claimed that the fast food chain used toys to unfairly attract children.

In the listed case study above, Kinder successfully offers a free child’s toy with purchase of chocolate, and there exist highly lucrative marketing teams like Kidoz that offer safe advertising and Gift With Purchase creation for children.

The positive results from a child-facing GWP campaign stem from two main factors:

Children perceive a free gift as more valuable than adults
Because adults are the ones delivering the gift to their child, the child’s joy adds to the value of the product for the parent

We’re not saying all GWP campaigns should be geared towards children, it’s just that these are the only ones with a proven record for having net-increases in repeat customers and word-of-mouth advertising (they’re lovin’ it).

Dirty Porch Pirates, Ammonia Fuel…

Feb 26, 2021 | Blog, The Packet

Front and Center

Dirty Porch Pirates

E-commerce has certainly been in the spotlight this past year, but who has really been stealing the show? Thieves, of course. Package theft is on the rise, as illustrated in a recent report, which showed that approximately 43% of Americans reported having a package stolen, a 7% increase from 2019. Of these theft victims, 64% of them say they’ve had packages stolen more than once. What’s to account for the rise in theft?

More Opportunity

Approximately 59% (+5% YoY) of Americans receive a package at least weekly, and 10% (+5% YoY) receive a package daily. That’s way more packages being left on the doorstep, and although the average value of the items has decreased, this does not seem to stop porch pirates from throwing up their hood and grabbing what they can.
http://https://www.youtube.com/watch?v=a_TSR_v07m0
ICYMI: Watch the amazing Glitter Bomb 2.0 vs Porch Pirates video

Who’s liable?

“YOU ARE GOING TO PAY FOR THIS!” you may have exclaimed to the heavens when you watch a thief grab your $3 toe clippers on your home security system. “But, who actually pays for this?”, you may have wondered as you pace around with your hawk talons clacking against the hardwood floors. (true story)

Well the answer is, if the shipper says that the package was delivered and the buyer states that it was not received, the seller is no longer liable. However, in most cases of a stolen package, the retailer or seller issues a refund or agrees to replace the item to preserve their customer experience. Amazon’s A-Z Guarantee program pretty much guarantees that purchases made from their retail partners will almost always be refunded or replaced if the package goes missing.

Some businesses may ask customers to file a claim with the shipper before issuing a refund or replacement.

What about package insurance?

For sellers, traditional shipping carriers such as UPS, USPS, and FedEx offer optional shipping insurance for a fee; however, this only covers so much. FedEx caps their liability at $100 and will only increase this if the package is packed and shipped at a FedEx location. Even then, it only increases to $1,000 for items like jewelry, artwork, collectibles, and antiques.

What can brands do?

Ultimately, the brands are responsible for making sure that their products reach their customers. So besides installing guard dogs as a nice ‘gift with purchase’, the most effective way that brands can combat package theft is to offer customers more ways to receive their products. The most common have been curbside pickup and local delivery. You can also schedule for in-person delivery and require signatures.

When deciding to outsource your fulfillment, be aware of your 3PLs Terms and Conditions surrounding stolen goods, and ask what your fulfillment provider can do. For example, in the case of stolen goods, ShipHero files claims with Carriers on your behalf, up to a certain value. Read more about ShipHero Fulfillment’s stolen goods FAQ here and our T&Cs.

Back of the Packet

Ammonia Side Here

According to the International Maritime Organization, international shipping contributes ~3% of annual carbon-dioxide emissions. To combat this, shipping companies seek to replace petroleum with a new fuel source, ammonia (NH3).

Why ammonia? Well… *deep breath in* this colorless fuel emits no carbon dioxide when burned, It’s abundant, it can be made using renewable electricity, water, and air, both fuel cells and internal combustion engines can use it, it doesn’t have to be stored in high-pressure tanks or cryogenic dewars like hydrogen, and it has 10 times the energy density of a lithium-ion battery.

The only problem is that no shipping carriers today are equipped to use ammonia as a fuel source. But by 2024, Viking Energy is set to become the first shipping vessel propelled by ammonia fuel cells, powered by several Norwegian-based companies.

NASA Perseverance and an Early Easter

NASA successfully landed their Mars Rover, Wall-e — I mean, Perseverance on the Red Planet last week. The videos of the landing immediately went viral, and in typically nerdy fashion, people began uncoding Easter Eggs hidden throughout the footage. In one such hidden message, the parachute was allegedly stitched in binary code that read “Dare Mighty Things”, a quote from President Teddy Roosevelt.

USPS Unveils New Trucks

And they’re cute as hell.

ShipHero News

NEW CASE STUDY ft. Spotted by Humphrey

What would you do if your dog became an internet sensation? Well, that’s what happened with ShipHero customer Yong-Soo and his French Bulldog, Humphrey!

Spotted By Humphrey – “with its quirky name for a shop that has the personality to match” – is a community-driven online destination for dog parents around the world who are looking to find something special and unique for their dogs.

Learn how they turned Instagram fame to a successful ecommerce business with our newest doggone ShipHero Case Study.

Gains, Bro

Need a sick pump for your e-commerce business? Learn how the dietary supplement industry used three simple strategies to get bulging revenue gains of over 40% this year, outpacing overall e-commerce by 12%… and they say it’s “all-natural”.

Multimodal vs. Intermodal Transport

These days, your products probably travel more than you do… But don’t be jealous, multimodal and intermodal fulfillment options are becoming more common as technology allows for seamless communication between carriers. On our Shipping Methods Explained series, we deep-dive into Multimodal vs. Intermodal fulfillment options, so you can determine if it’s right for your business.

ShipHero’s Innovation Wheel: Automation

Are you bogged down by the day-to-day tasks of running a business, desperate for time to focus on your strategy? Automation is the answer you need, and your fulfillment provider should be just the one to provide it. In ShipHero’s Fulfillment Innovation Wheel series – Automation, we give a glimpse into our Automation Cookbook to show you how automation can improve your speed and efficiency.

The Fulfillment Innovation Wheel: At the Box Personalization

Feb 25, 2021 | Blog, The Fulfillment Innovation Wheel

The twelve capabilities are:

In this article, we will be diving into Capability #3: At the box personalization.

And be sure to stay tuned for future articles as we deep-dive into each capability.

Capability #3: At the Box Personalization

At the Box Personalization is all the little details in your product’s unboxing experience that truly make customers fall in love with your brand. Imagine getting an unexpected hand-written note, a coupon, or a gift in the box along with your order.

All the excitement and gratitude experienced by the thoughtful presentation of your items generates customer loyalty, while also providing a targeted marketing channel for cross-sell and upsell of items. Not to mention, 59% of Americans receive packages weekly, and 10% receive packages daily. That is quite a large marketing audience in terms of packaging…

By pairing At the Box Personalization with modern-day customer data and analysis, retailers can give more personal, more thoughtful experiences than ever before; say, a gift that they truly love or a coupon for an item they had considered purchasing. You may not sell to Brad Pitt, but your customers will be screaming “WHAT’S IN THE BOX” every time they open your package with these benefits of At the Box Personalization:

Spread Your Brand Organically

Corporations have been successfully using At the Box Personalization for decades, with some customers fully relying on Youtube unboxing videos to guide their purchases, and you can see unboxing ideas all over on Pinterest.

Drive Customer Loyalty

In today’s competitive e-commerce market, most retailers do not manufacture unique goods, so your market differentiators are going to live in that extra ‘wow factor’. At the Box Personalization is proven to cultivate brand loyalty and give customers that jolt of consumer surplus that only comes with getting more bang for your buck — that’s right, we’ve all been conditioned by the Happy Meals toy.

Create Sales Opportunity

Along with the purchased item, retailers can incentivize cross-selling and upselling other products, essentially transforming your packaging into a targeted marketing channel. You can include coupons for relevant or wishlist items, or you can include a gift that requires purchase of other features or parts. And because this occurs in the post-sale phase of the buyer’s journey, it won’t come off as another sales gimmick.

The sky is truly the limit when providing high-quality personalization to your customers, so don’t get weighed down by your 3PL or fulfillment provider. Many fulfillment providers today simply do not provide At the Box Personalization because it reduces efficiency and increases costs.

However, smart fulfillment companies like ShipHero continually innovate their capabilities to offer you a wide range of At the Box Personalization options. Our customers love that ShipHero can easily customize their unboxing experience. We attribute this success on the Fulfillment Innovation Wheel to Capability #3: At the Box Personalization.

Stay tuned next as we cover Capability #7: Distributed Fulfillment! Fulfill Your Dreams… Everywhere. ShipHero.

Learn more about ShipHero’s industry-leading warehouse management software.

How Supplement Companies Have Dominated E-Commerce With 3 Simple Strategies

Feb 24, 2021 | Best Practices, Blog, Warehouse Management Software

Look at those gains, bro. Over the last year, the dietary supplement industry has boasted bulging sales growth of 40%, outpacing overall e-commerce by 12%, and they swear it’s all-natural…

The pandemic has certainly brought more awareness to immunity, and overall health and wellness; in fact, 77% of American adults consume dietary supplements, and the average American spends around $56 per month on dietary supplements.

Of course, there are other ways to increase immunity and health, such as at-home workout products and healthy meal kits, but those haven’t grown at nearly the same rate as supplements. So that begs the question…

How have supplement companies dominated e-commerce?
After searching through the supplement industries’ gym bag of secrets, we found that the true secret to their success with the injection of three strategies:
(Serving size: one scoop of each)

The Subscription Model
Bundles and Stacks
Smart Fulfillment

Disclaimer: Ingestion of the following strategies will give you and your e-commerce business a sick pump.

Strategy 1: The Subscription Model

The Subscription Model, or “Subscribe & Save”, is where customers subscribe to weekly, monthly or seasonal purchases and receive discounts upwards of 15% off. Think content streaming services like Netflix or Hulu, recurring subscription box companies like BirchBox, and more recently, supplement and vitamin companies.

Companies that employ the subscription model offer recurring products or services, rather than the traditional, one-time transaction. Brands and businesses that have utilized this approach have reported better customer relationships, improved aggregate data, and more diversity in product offerings.

Turn Customers in Subscribers
Most large companies report that new customers only generate 15 to 25% percent of their revenues, which means that return customers generate the bulk of the revenue. Focusing on return customers and subscribers reduces acquisition costs of targeting new customers, while cultivating brand loyalty.

Gather More Fruitful Customer Data
As reported by Shopify, modeling and storing subscription data allows your company to better engage with your audience and create targeted content along the customer journey.
In fact, many large brands develop separate marketing strategies for subscribers and non-subscribers, as well as strategies to convert non-subscribers to subscribers, including email campaigns and targeted discounts for subscription and account creation.

Sell the Same Product in Multiple Ways
The subscription model gives brands the creative freedom to understand how their customers would prefer to engage with their products and services.

Beyond the price discount, supplement companies could offer subscribers access to free delivery, early bird offers, free trials or samples, gifts with purchase, and much more. As you learn from your subscribers, you are free to adjust your product offerings to better meet their needs!

If you want to learn more about how to create a successful subscription model, check out our blog.

Strategy 2: Bundles

Bundles, or as they’re called in the dietary supplement industry — stacks. Supplement stacks are a bundled variety of supplements for one specific health goal; for example, popular supplement stacks are for the ketogenic diet, weight loss, muscle gain and more.

Bundling products allows companies to cross-sell, provide a more convenient shopping experience, and give customers more flexibility.

Cross-Sell
Bundles are the perfect way for supplement companies to cross-sell products. By intelligently combining multiple products into one item, supplement companies bundle their popular and top-selling supplements with products that normally might not sell on their own (looking at you L-Carnitine). Also, if you have multiple flavors of a gut-drink for example, you can bundle together a variety pack!

Convenience
With just one click, customers can purchase all the supplements that they need. And if you are using the subscription model, their supplements will be auto-fulfilled based on their desired cadence!

Flexibility
Some supplement providers like G Fuel offer their customers the flexibility of building their own bundles — BYOB but healthy!

Strategy 3: Smart Fulfillment

Any supplement company can promise a lucrative subscription model with convenient and flexible bundling options; but in reality, these are extremely complicated to pull off without the right inventory management and order fulfillment process.

In fact, most 3PLs and fulfillment providers simply don’t offer the customization and bundling options that supplement companies need. That’s why you need to supplement your business with the right fulfillment provider.

Convenient Bundling
Through traditional fulfillment methods, creating and shipping customized bundles, kits or bulk orders can be highly complex and downright costly. By offering a subscription service, your brand can sell a variety of items in a variety of ways, so brand owners must be able to group orders quickly and pick a lot of the same product at once, making the fulfillment process quick and simple.
That’s why ShipHero is dedicated to supporting our subscription-based and bundle supplement companies with our newest capability, BulkShip!
BulkShip is an intuitive interface to design preassembled bundles of products, such as a BodyBuilding Stack or a more flexible bundle that would get assembled at fulfillment – like the Build-Your-Own-Bundle option.

Safe Storage and Transport
Supplements must be stored in cool, dry areas, or they risk discoloration, odor, and deterioration. Make sure that your fulfillment provider can take the necessary precautions to protect your inventory in a safe, secure, and climate controlled environment, and take care during the transportation.

Reliable Shipping
Supplements and vitamins are taken regularly and on set cadences, so having a reliable shipping carrier with built-in resiliency is of the utmost importance.
This year has shown that even the most popular carriers, FedEx, UPS and Amazon, are all subject to delays and unreliable shipping times. That’s why ShipHero has seen a huge surge of supplement companies looking to diversify their shipping methods, so that their customers and subscribers receive their supplements when they’re supposed to.

CAREERS