E-commerce in South Africa has grown significantly over the past two years. Driven by necessity during the Covid-19 lockdown in 2020, consumers are now familiar with online shopping as around 70% of South Africans now shop online at least once a month.

If fuel prices continue to rise, more South Africans will take advantage of home shopping, which means that consumer demands in the e-commerce sector will only increase. More and more customers will expect fast, convenient and accurate delivery, and any delays or errors in delivery will not be taken kindly, resulting in e-commerce sellers losing potential customers.

As demand grows, e-commerce players will need to re-evaluate their warehouse management systems (WMS) to compete in this space. Here, sellers will have to decide: keep their warehouse management in-house or outsource the function entirely?

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More demand, more expectations

Whether shopping online is driven by necessity or convenience, the reality is that e-commerce is becoming the preferred method for South Africans. While this increase in online shopping in South Africa presents a huge growth opportunity for retailers, wholesalers and manufacturers, it will be necessary for organizations to reassess their entire value chain to address the issues of efficiency and cost. This will help them scale to meet increased customer demand as well as an increase in their delivery expectations.

If they are not choosing price alone, customers are likely to buy from a seller who can deliver their order the fastest, which means there is little time or space for errors in e-commerce order fulfillment.

The pitfalls of internal management

With e-commerce players who started small, we tend to want to keep everything in-house, including warehouse management. While this provides the business with a sense of control, this function is likely to come under even more pressure, which means there is an increased risk of error and mismanagement. It’s also difficult for an internal warehouse function to keep up with changing demands, especially during peak periods like Black Friday and Christmas.

Warehouse management - are you as efficient as you think?

From anticipating sufficient inventory to meet supply demand to ensuring orders are properly packaged and delivered on time, an online seller must manage many variables, from when the customer clicks on “add to cart” until the delivery of their order.

Identify efficiency opportunities

When reviewing their business operations to identify areas for efficiency improvement, organizations must first examine their warehouse management function. Unless it’s their core business, there’s no real reason for a company to keep this function in-house. Outsourcing warehouse management is one of the most effective ways to increase productivity, using a business process outsourcing (BPO) provider.

Such a vendor will step in, perform a thorough needs analysis, identify performance gaps, and provide solutions that will help e-commerce sellers streamline their operations. The BPO provider assumes responsibility for the warehousing and order fulfillment function for the e-commerce seller and in doing so, ensures that these functions are performed optimally, which ultimately results in a customer experience improved.

Outsource to increase efficiency

A lot of work goes into ensuring a smooth and fast experience for online shoppers, from placing their order to accepting delivery. However, e-commerce sellers don’t have the luxury of time when it comes to getting it right through trial and error.

This is where a BPO provider can help e-commerce players skip the learning curve and jump straight into delivering an experience that meets or exceeds customer expectations. By outsourcing their non-core processes to a specialist BPO provider, e-commerce players can refocus their attention on activities such as sales and marketing, which will increase competitiveness and open up new market opportunities.

In addition to saving time, organizations that use BPO providers to manage their warehousing function will also benefit from complete flexibility. Here, using a warehouse management system and deep industry expertise, a BPO provider will help the business anticipate and plan for fluctuations in demand.

Whether it’s a specific or seasonal sale, a BPO provider gives its customers the ability to bring in increased headcount to handle the volume of additional orders, while maintaining a predictable fixed cost. The BPO provider also takes responsibility for accuracy, which is enforced by service level agreements that specify a tolerable rate for errors or returns.

Customer satisfaction depends on e-commerce efficiency

By implementing an efficient warehouse management system and streamlining processes for their customers, BPO vendors help e-commerce vendors deliver on their promises to customers, and their effectiveness is measured strictly against defined KPIs. . Since the BPO provider’s profitability depends on performance, its clients can rest assured that they will receive efficient service delivery that generates higher revenue value as a direct result of outsourcing and optimizing functionality at the within their supply chain.

When customer satisfaction is viewed as a direct result of efficiency, it becomes clear that internal warehouse management and the risk of inefficiency is not a risk an e-commerce business can afford.