Demand & Inventory Planning

Flexible Fulfillment Solutions to Grow Your Business

Demand & Inventory Planning
March 7, 2023
8 min read

Learn how flexible fulfillment allows you to scale your operations up or down to meet your business needs, increasing profitability and decreasing risk.

Flexible fulfillment is vital to success in today’s always-on omnichannel retail environment. Today’s consumers expect personalization, optionality, and speed of delivery, and traditional fulfillment models simply can’t stand up to those expectations.

What Is Flexible Fulfillment?

Flexible fulfillment refers to the ability to fulfill orders from any type of facility — be it a fulfillment center, distribution center, or retail store. Another characteristic of flexible fulfillment is the ability to fulfill multiple order types – from small parcel to freight to white glove – through a single network.

These capabilities enable merchants to meet consumers where they’re shopping and deliver to them the way they expect to be delivered to. The truth is, consumers are shopping everywhere: in stores, on ecommerce marketplaces, on social media. And they want options when it comes to delivery. They want options for in-store pick-up, same-day delivery, 2-day delivery, or scheduled delivery.

A Flexible fulfillment model is the only way merchants can meet all of these expectations. There are three primary characteristics of flexible fulfillment that enable the optionality that today’s consumers demand. They are:

  • Asset-light
  • On-demand
  • Technology-first

Ahead, we’ll discuss how each of these qualities support agile business models that make fulfillment a competitive advantage in today’s crowded marketplace.

Why Does Flexible Fulfillment Matter?

1. The ecommerce explosion changed the game.

Today’s shopping environment is digital-first, and digital shoppers have specific expectations for fulfillment and delivery. In fact, McKinsey reports that 90% of ercommerce consumers expect free 2- to 3-day shipping and that over half will simply purchase from a different merchant if they believe shipping speeds are too slow.

On the other hand, in-person shopping is back in a big way. Many consumers discover new brands while shopping in-store, and with customer acquisition costs on the rise, brands can’t afford to ignore traditional retail as a discovery channel. What’s more, shoppers who make a purchase in-store are more likely to make a second purchase from the same brand online.

To get the best of both worlds, many consumers turn to Buy Online Pickup in Store (BOPIS). Picking up in-store allows consumers to skip the shipping costs and gives them the certainty that they will receive their product exactly when they expect it.

Therefore, today’s consumers are truly omnichannel shoppers, and merchants must have a flexible fulfillment solution in place that can fulfill orders from any location and via any transit mode.

2. Consumer demand is unpredictable.

The past few years have proven tumultuous for merchants and retailers of all sizes. From supply chain disruptions to revolving consumer shopping habits, merchants have had to pivot their strategies to succeed in the current market.

Flexible fulfillment enables you to pivot your strategy in real-time to take advantage of new opportunities and pull out of unprofitable ones. This kind of flexibility benefitted the 77% of merchants that had to shift their selling strategy in response to COVID-19.

It can also benefit merchants looking to optimize their inventory management as consumers change what and how much they buy. Having visibility into sales and shipping patterns helps you determine which of your SKUs are most profitable (hint: it may have changed since last quarter) and which are turning too slowly and depleting margins. But visibility alone is not enough. You must also have the operation flexibility to quickly move SKUs to a new fulfillment center, replenish high-velocity products, or liquidate inventory that’s no longer profitable.

3. Today’s consumers expect personalization.

The most successful digital sales channels are highly personalized, with product recommendations, fulfillment options, and size recommendations tailored to the shopper. Today’s consumers expect to have options when they shop online – all the way down to how and where they receive their order.

Flexible fulfillment allows you to offer customized options to meet those expectations, including fast shipping, sustainable shipping, and in-store pickup options.

Three Ways to Achieve Flexible Fulfillment

1. Co-warehousing

According to McKinsey, flexible options like co-warehousing enable small to mid-sized businesses (SMBs) to share warehousing space and labor costs. Cowarehousing gives SMBs access to more advanced fulfillment capabilities, technology, and scale.

Additionally, sharing space and labor allows merchants to distribute inventory across multiple warehouses – forward stocking their products closer to the end customers, which lowers time in transit (TNT) on final mile deliveries. With lower TNT, merchants can more affordably meet consumer expectations for is fast shipping.

2. On-demand fulfillment

On-demand warehousing and fulfillment is an asset-light solution that allows you to only pay for the space and labor you need when you need it. An asset-light solution is essential to flexible fulfillment that allows you to take full advantage of seasonal or cyclical patterns of demand.

In contrast, with an asset-heavy fulfillment model, merchants are forced to choose between two options when it comes to cyclical demand: either scale up operations to meet higher demand and continue to pay for those assets during lower demand periods, or miss sales opportunities to keep operating costs low.

On-demand fulfillment offers a third option that is fully responsive to both market and business needs. For example, LS2, the United States’ fastest-growing helmet brand, found that traditional fulfillment models were too capital intensive to support their rapid growth. They found an on-demand fulfillment partner that allowed them to grow into new markets without rising additional capital expenditures.

3. Technology-first solutions

Supply chain technology has evolved to better serve increasingly flexible and scalable digital sales channels. It has never been easier to launch online sales. eCommerce shopping carts, third-party marketplaces, and social selling give merchants and consumers endless opportunities to buy and sell digitally.

The flexibility of ecommerce platforms enables them to be turned on or off based on product availability, demand, or profitability. Multiple platforms can be integrated through a single listing platform, which allows merchants to monitor and manage all of their channels through a single dashboard. 

However, launching or growing a sales channel without having a flexible fulfillment solution to meet ecommerce shipping expectations will ultimately lead to a frustrating customer experience. Technology-first fulfillment, therefore, enables merchants to integrate their sales channels with their supply for complete flexibility.

Flexible Fulfillment with Ware2Go

Ware2Go is a UPS company that provides flexible fulfillment solutions for merchants of all sizes. With a diverse network of warehouses supported by best-in-class fulfillment technology and an integrated freight solution, Ware2Go helps merchants reach all of their customers with affordable 2-day UPS Ground .

To learn more about Ware2Go and get monthly insights and tips to grow your business, join our newsletter here.

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