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Under One Roof

Under one roof: fulfillment and customer service functions

Fulfillment joins the dots between eCommerce retailers and brands to customers, with the aim of getting orders to their destinations quickly, preventing customer dissatisfaction– in other words, frictionless commerce. Many third-party logistics (3PLs) providers build successful relationships with brands by ensuring inventory has been correctly forecasted, technology is increasing productivity and packaging is appropriate to the needs of the product, preventing damage during delivery.

The role of an eCommerce fulfillment 3PL can be incredibly cyclical, and operates by following a specific process:

1) Forecasting: the brand sends the provider a forecast, or the 3PL forecasts order volume based on previous performance

2) Delivery: the provider processes and delivers that volume

3) Evaluation: the provider receives a customer evaluation of the delivered volume

4) Repeat: the process and sequence of steps repeats itself through each transaction, especially during promotional activity over the course of the year.   

For the customer, the fulfillment process and brand experience does not end post-click – it’s just as important for retailers and brands to be pre-emptive and responsive to issues throughout the customer service channel, for example, and every other touch point.

But should you keep fulfillment and customer service under one roof? Or separate, and partner with two providers?

Working in tandem

A combined approach ties fulfillment and customer service together as the ‘golden thread’ throughout – each function must be aware of the other to be preventative to potential issues, yet reactive to issues as they arise. As two of the key functions within the supply chain, providers who are able to offer both fulfillment and customer service can consolidate planning processes around forecasting for the business as a direct result of having a better line of sight overall when it comes to the peaks and valleys of retail and wider eCommerce.

When it comes to forecasting for promotions, the impact on the fulfillment operation can be easily communicated to the customer service centre if under one overarching organisation – it can be treated as one constant planning workstream. Duplication of support will cease to exist, and processes streamlined. It is common practice for an eCommerce contact centre to forecast volume based on expected website order volume. You can take a revenue forecast as well as site analytics and translate to both a fulfillment forecast as well as a customer service forecast  – not only for the day of, but also for understanding what the residual volume from that fulfillment activity may then look like in the customer service environment.

The benefits of consolidating customer service and fulfillment

Over the last two years, there has been greater unpredictability from the carrier or delivery partner network. For many, the benefit of housing both functions under one roof means customer service agents can see your shipping data in real-time – you can track whether a delivery partner has picked up all, some, or none of the volume. There is a line of sight for retailers and brands, if data has been collected, on any potential bottlenecks in the delivery partner network – this will lead to an increase in call volume amongst consumers asking when they can expect their package. This also assists with the planning of staffing – you can be more prepared to handle those unexpected events.

Customer service and fulfillment teams, when consolidated with one partner, are likely to be party to the same or very similar global updates and benefit from internal, cross-functional relationships. It is likely that staff will share the same reporting line, reporting to the same supervisor, so messages filtering down are less likely to get lost in translation. The old adage “it takes two to tango” is resonant in this scenario – fulfillment and customer service teams working together can understand each other’s pain points far more than teams separated by different organisational governance and guidelines.

Having real-time access to what is happening in the network means you do not have to be reliant on the customer service function as the informant. For example, 3PLs can offer client partners shared access to the customer reporting suite providing activity across fulfillment and customer service center operations – a formal programme can provide access to client satisfaction surveys to capture honest feedback directly from client partners, which can only improve relationships across the operation.

Size and shape

By appointing two separate providers, one for fulfillment, one for customer service, the respective function becomes their only competency, and therefore their core competency – clients are likely to appoint based on the presumption that they will be best in-class in that function. Questions that should be asked include:

  •  Are they using enterprise-level tools in both sides of the organisation?
  •  Do they have dedicated executive leadership in both sides of the organisation?
  •  What is their performance and the scale of those in each discipline?
  •  Are they concerned about the entire supply chain operation, or only their piece?

The growth or size of a particular retailer or brand is also a key consideration. Smaller or younger businesses tend to keep both functions in-house to start with, outsourcing fulfillment first as they grow. Customer service is more traditionally kept in-house due to smaller order volumes – these retailers and brands can rely on brand or product experts to take on and perform customer service duties on top of their main responsibilities, especially when the brand is focusing on a single market.

If there is marked growth, at some point these functions need to have a more robust structure and level of support, with a broader team and set of skills that may not be able to be found in-house. As retailers and brands scale, they will have the tendency to regroup their B2B, DTC and after-sales customer service. Here you might see one or more of the functions outsourced, either under one roof or separately.

For enterprise-level businesses, that is, a business that employs comprehensive solutions which require a certain level of complexity and expertise to implement, there is a sweet spot where it makes sense to have both fulfillment and customer service functions under one roof. Whether they have or are building an international presence, need to cover multiple languages or growing volumes, or do not have enough to staff a full team on their side, there is no case to have customer service in-house.

If you need to outsource the fulfillment operation, go with them for customer service also. Agents will have a feel for the products, be able to obtain and communicate first-hand information about packaging etc., and the fulfillment function will understand the voice of the customer far easier as tools are accessed to track packages, arrange returns or make commercial gestures.

Drawing conclusions

If you find a single provider which has all these things, there is no reason to believe that they will not be best in-class at both.

If you outsource the fulfillment function only, you may be able to determine that you can partner with a lower-level shipping service to save money, but what is that going to do to your customer service budget? Remember, longer delivery times lead to a higher percentage of customers who will check on their order status. Ultimately, it’s about making sure that you enact the objectives that benefit both – so taking all that into consideration, one mind may be better than two. 

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As Vice President of Business Operations, Jamie is responsible for PFS' global portfolio of 70 brands. Throughout her 10+ years at PFS she has served in various roles across the organization, giving her a wealth of industry knowledge across verticals. Jamie applies her expertise to guide our clients to successful eCommerce operations.

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