How Ecommerce Fulfillment Affects Sales Performance

Ecommerce fulfillment and sales performance go hand-in-hand. You’re probably thinking, “no duh Captain Obvious”. But let’s take a step back with a personal example of the importance of fulfilling on time, fulfilling period, and the financial implications therein.

Shoes and Ecommerce 

I am a runner and every so often will run a marathon. In training for and running marathons, shoe purchases go up to 3-4 pairs a year. Most serious runners become very committed to a brand and model of shoes. They buy them repeatedly because injuries happen, so don’t break what’s working. For the longest time I was a loyal Nike shoe customer until they changed my favorite shoe. I turned to Brooks Adrenaline ever since (side note – I still love Nike apparel).

A few years ago, I realized that I was buying the same shoe until the next version came out. My purchase process was going to the running store, throwing them on, realizing nothing changed, and buying them. Lot’s of time driving, putting on a shoe that hadn’t changed, and buying through inefficient point-of-sales systems. Sorry local running stores, but it’s so much easier to buy with Amazon Prime where my shoes show up 2 days later. I still buy from a store when the next version comes out because that’s when things can go bad, but ecommerce is so much easier!

Searching for the Perfect Pair

Last month, I realized I was going to need another pair of shoes. This would be the pair that I would wear for the my upcoming race at the St. George Marathon, so I should make it count. I wanted a good color, something that gave me a boost during those 26.2 grueling miles and often the selection at running stores or on Amazon is limited. Not not give some love to Brooks and buy direct? I could pick my favorite color and who doesn’t do ecommerce well in 2019? Florescent yellow was the clear choice and I ordered with some surprise that it would be 10-14 days before I received my shoes. While disappointed in the timeline, I had time before I needed to retire my current pair of shoes, so I was alright waiting.

I checked their website every few days on the order status with no updates, but I thought I would get an email or update when it shipped. Then I received this message 11 days later:

Hi Stephen-

It’s with a heavy heart that we have to tell you that we cannot complete your order 04000490. We have moved our distribution center to a brand new facility to help us provide better and faster service to customers like you. We have seen unexpected delays to our customer’s orders as we adjust to this transition. Call it growing pains. When we went to ship your order, we discovered that we do not have the inventory and we are not able to complete your order at this time. We are not proud about the unexpected detours we have had to take, but we would like to take the right path to attempt to make it right with you. We would like to offer you a 25% discount for your next purchase.

I was disappointed. How does it take 11 days to figure out the product is not available? Better yet, the exact shoe was still available on their website? I should have ordered again just to get another 25% discount.

Poor Ecommerce Fulfillment? . . . Brick and Mortar It Is . . . 

My quest turned to the local running store, Utah Run (who needs to update their SSL certificate as of this writing), hoping they would have better color selection than they usually do. Sadly, they not only didn’t have that color, they had no Brooks Adrenaline shoes in my size. This was due to terrible order fulfillment from Brooks to retail stores in the last few months. I wasn’t mad at Utah Run and still wasn’t mad at Brooks, but aghast that a company of their size could be such a mess.

Amazon to the Rescue

Luckily for Brooks, shoe loyalty is deep. So while in my car in Utah Run’s parking lot, I went to Amazon and ordered a different colored pair of Adrenaline shoes from my phone. Lost were the direct profits to Brooks and the modest margins to Utah Run. While some lucky retailer Charm City Run, who was smart enough to do Fulfillment by Amazon (FBA) and be Prime Eligible, won my business. This is one small example, but I want to peel back the layers and explore the relationship between ecommerce fulfillment and sales.

Ecommerce Fulfillment Woes

After finishing my purchase, I again thought: How can Brooks, a Berkshire Hathaway company, who made $644 million in 2018 be so bad in ecommerce? Digging deeper, I saw many other comments on Twitter noting similar fulfillment woes. Perhaps it is tariff troubles that have resulted in a shift from China to Vietnam for manufacturing. That’s understandable, yet they still messed up with long fulfillment times and poor inventory management. Perhaps the fulfillment delays relate to the manufacturing switch. But that doesn’t explain that their inventory and ecommerce systems were out of sync. Every consumer wants to accurately order product and get it quickly!

Sales Impacts  

Brooks is lucky as my purchasing challenges didn’t prevent me from buying their shoes, but it may have caused a casual shopper to switch to an alternative. That’s one loss of a sale. Countless other product categories would guarantee that a choice went elsewhere. That’s a loss of a sales now and potentially in the future. At minimum, their issues with fulfillment may prolong purchase timelines as I extend the use of my current pair of shoes and drive purchasing to less profitable channels. That’s fewer sales and\or less profit.

Lessons for Ecommerce Fulfillment

Again, it’s obvious, but good ecommerce fulfillment equals sales and profits. In Brooks case, poor inventory management hurts their direct and retail channels. Whether the cause or not, manufacturing and tariffs have real impacts and could be the source of this issue. Understanding your supply chain, your inventory, and your sales demands are critical for hitting sales targets and keeping customers happy. Not every company can have the brand loyalty of running shoes, so consider these factors when growing your ecommerce sales. For now, I’ll keep running happy in my Brooks Adrenaline thanks to Amazon’s reliability.

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