SPS recently surveyed nearly 200 3PLs about how data accuracy, speed and automation impact their business. The responses were consistent across all sizes of 3PLs and all industries they serve.

Lead Times Matter

Data automation is about timing. 3PLs need the details about when orders are coming in and need to be shipped. But also important is the timing of this communication. Warehouses are busy places. Their schedules are tight and their staff hustle to keep orders on track. Advance notice from customers allows 3PLs to schedule resources more efficiently, allocate warehouse space and maintain high safety standards. By automating the flow of data, customers can ensure that their details reach and are put in motion by the 3PL quickly, and not sitting in someone’s email.

As consumers expectations for rapid fulfillment increase, 3PL speed must also increase. Advance notice may be measured in minutes or hours, not days. Any extra time is useful to a 3PL and provides the services they are equipped to deliver.

Better Data Equals More On-Time Deliveries

Retailers often measure suppliers on two key factors: on-time shipments and complete orders. One way to boost on-time deliveries is to provide 3PLs with accurate order information as early as possible, with as few changes as possible. Using EDI or another form of automation to send this data reaps benefits for all involved: the supplier, the 3PL and the retailer or consumer.

In the study, 3PLs ranked improving on-time deliveries as the top customer benefit of timely data. In their survey responses, many noted the delays that occur when data is incomplete or inaccurate. This requires their team to correct it and this takes valuable time. With today’s quick order cycles, any delays can risk shipment deadlines or mean shipping using a more expensive means to still arrive on-time.

3PL Speed Improves with Automation

Nothing makes 3PL staff smile like seeing orders ship out from the dock and waving to the driver. We all love it when our to-do list shrinks. Today’s 3PLs are doing everything they can to pick, pack and ship more orders faster than ever. Automation makes this possible. From WMS to EDI to robotics, today’s warehouses are continually advancing to speed 3PL fulfillment.

Automated data flows from customers have a direct impact on warehouse operations. 74 percent of 3PLs stated that improved automation led to faster shipments. And, 72 percent stated that complete and timely data allows them to ship faster on behalf of their customers.

What did 3PLs Have to Say about Automation?

SPS asked 3PLs what was the one thing that customers could do to help them be faster. The responses all zeroed in on timely data and/or advance notice of orders or changes.

What do 3PLs need from customers in to improve fulfillment speed?

• Enough lead time and complete order information
• Provide orders a day in advance
• Minimum 48-hour notice for shipments
• Timely data transfers
• More advance notice for special projects/changes in scope
• Provide order data earlier
• More time between dropping an order and needing to ship
• Provide order shipping and inbound product information more than 24 hours in advance

Interested in learning more about 3PL automation? See how SPS is helping 3PLs standardize and automate order and item data with SPS for 3PLs.

A Google search for “EDI providers” leads to over 8 million results! Although the multitude of EDI services may sound similar, there are significant differences between providers. The most straightforward way to categorize these providers is by whether they offer a managed EDI service or a full-service solution.

What’s the difference between managed EDI services and full-service EDI?

A managed EDI service is a cloud-based solution in which the EDI provider is responsible for developing and maintaining the core technology, while the customer’s internal staff is responsible for the day-to-day customization, optimization and operations of the technology. Full-service EDI includes both the cloud-based solution and associated staff resources that customize, optimize and operate the technology. In this model, the EDI provider carries out a complete business function on behalf of the customer.

Which type of EDI solution is right for your business?

How can you tell whether your business needs managed services or a full-service EDI solution? The answer comes down to whether EDI is a core competency. In other words, does having EDI capabilities in-house create a competitive advantage for your company? Is having a dedicated team of EDI experts on staff something that you want for your business? If EDI is a core competency of your business, managed EDI services are a good choice. For many companies, EDI is an important requirement of doing business, but it is not a core competency. Instead, their core competencies revolve around activities that further their competitive advantage through product innovation, service delivery or other distinctive capabilities. For these businesses, a full-service EDI solution is the best option.

How can a full-service EDI provider help me?

Full-service EDI providers take ownership of understanding the EDI requirements and business rules of your retail customers, which are constantly changing. A full-service provider also proactively monitors and optimizes your EDI system, so you get the most value from your solution without having to understand the technical details yourself. Full-service EDI solutions have seven primary components:

• Technology
• Trading partner expertise
• Design and configuration
• Trading partner communication
• Testing and launch
• Proactive monitoring and analysis
• Ongoing resource access

A truly full-service provider will be able to describe their capabilities in all of these areas, so you can get a clear picture of what ongoing tasks the provider will handle and what tasks (if any) your team will be responsible for. Get more insight on the full-service type of edi and the seven components it’s founded on by downloading our new white paper – Evaluating Your EDI Options: Seven Building Blocks of Full-Service EDI.

I talked about this historical progression of retail in my keynote speech for the SPS Commerce In:fluence 2017 event and in previous interviews, and I feel a message worth repeating, especially as the complexity of retail continues to change: The core fundamentals of achieving success in retail are still relevant today.

1) Location. Location. Location.

In the early days of retail, before modern transportation and highway systems, the merchant with the best location always won the commerce game. If you had a small grocery store in the middle of the town square, you were the de facto grocery store. The dry goods store in the center of town was the only place to buy material to make clothes or get your tools. The local auto repair shop everybody went to was easy to access as it sat in the center of other commerce and drop-off and pick-up was close to where you work. And it didn’t matter how high the prices were, you paid them because it was convenient, and it was where the people gathered. If the store had the right location, chances are the family who ran it was one of the richest families in town.

If you lived in the big city, it didn’t matter if there were any competitors in town. Chances are your store was the big winner because it was within a two- to four-mile radius of a highly-populated area and was easily accessible. Back then, people didn’t have the same transportation options we have today. The merchants didn’t have to do any merchandising or marketing, and prices weren’t a big concern. Even when cars and highways came along, people generally didn’t commute to shop, except for specific reasons and special occasions. You went to the closest market for produce, visited the closest butcher for meat, and the closest baker for bread (or made your own).

2) The Era of Retail Malls and Big Boxes

The era of retail malls, Walmart and Target changed everything in retail, in their own ways. Now, people had choices and options. They were also more mobile with modern transportation. They could drive to find cheaper prices and experience the choice offered in department stores and malls, so price and choice became a factor for shoppers. Larger stores and malls offered more of everything all under one roof. Why drive to three or four different stores, when you could do one-stop shopping and have options? Why be forced to pay high prices for limited selection and waste a full day going from specialty store to specialty store?

When Walmart expanded its footprint across the country, it changed the pricing landscape so drastically that merchants went out of business trying to keep up with the low-priced giant. Walmart became an operational savant and used their process precision, negotiation, and buying power to improve profits. The savings in buying bulk and price negotiation were passed on to their customer. Win-win for everyone, but especially the consumer! Once products hit the shelf, they sold quickly, because the stores were big, convenient and open 24 hours every day – volume drove the business.

While Walmart was focused on competitive pricing, Target focused on merchandising, compelling point of purchase strategies, and delivering a more appealing consumer shopping experience. That whole joke about going in to buy one thing, but leaving with a $100 cartful exists for a reason. They widened their aisles by 50 percent and invested twice what Walmart spent on lighting up their stores. They even asked well-known brands and designers to create exclusive merchandise for them, such as KitchenAid, knowing consumers were willing to pay a few extra dollars for a premium option.

Rather than trying to be everything to everybody, Target concentrated on reaching the people who made $50,000 a year or more. They were successful, because they didn’t compete on price with Walmart. Instead, they ran alongside them and won market share by targeting their ideal customer. Market segmentation, merchandising and savvy marketing become Target’s silver bullet while Walmart continued to thrive knowing the needs of their consumer who was motivated by price.

3) The Era of Amazon and Unified Omnichannel

In the third and present era of retail, the Internet and mobile technology changed the entire world. Now, thanks to Amazon and e-commerce, you not only have to focus on having the right price, you must excel at online merchandising and win in the complex world of omnichannel. Retailers died overnight not seeing this change catalyst coming.

There is a secret sauce, a recipe for success, at winning in retail. And it’s complicated.

First, you take a page from Walmart’s playbook, and make sure you have are exceptional operationally from a highly-efficient supply chain to innovative product sourcing. You must build strong trading partner relationships and be great at logistics to get the inventory you need and negotiate hard to drive pricing to the lowest possible point.

Next, you take inspiration from Target’s success, and deliver engaging merchandising and an intuitive and positive consumer experience. Navigating the store draws on common sense (put the laundry soap near the dishwasher soap and offer shops within a store built on brands we know and love. Smart move leveraging the success of the TV show Fixer Upper and the Stars Chip and Joanne to create Hearth and Home: Magnolia within Target’s household area. Merchandising brilliance drives unplanned purchases and pulls at our wants, not just our needs. Suddenly, your quick stop for laundry detergent, milk and a new phone charger has turned into a $100 stab at home renovation.

Finally, there’s that Amazon effect that disrupted retail, accelerated consumer expectations, and turned over the apple cart in the retail supply chain. Amazon created and delivered on the consumer’s desire to get whatever they want, whenever they want and however they want it at a perceived better price. Amazon pretty much has everything (endless product and brand options, and merchandising) at rock bottom prices (supply chain) and goods can be delivered right to people’s doorsteps, often for free and within two days when you have Amazon Prime or you can now visit an Amazon or Amazon-owned store brick and mortar store (omnichannel). Amazon is on well on its way to achieving a truly unified omnichannel organization.

Fundamentals Endure: What Was Old Is New Again

Time is linear, but history is cyclical. We’ve come full circle and “location, location, location” remains a critical success factor, as is great merchandising and positive consumer experiences, and supply chain efficiency.

Not only are small specialty retail stores popping up again — and the acid test is Amazon dipping its toe in retail storefronts — we’re gaining granular insights on product inventory and placement on a regional, local, and store level, thanks to our point-of-sale analytics capabilities. This is enabling retailers to meet the needs of the consumer-driven buy local and farm-to-table movements as well as maintaining inventory for national consumer branded products. We can empower buyers with on-the-spot analytics and strategies for purchasing regional and local preferences, plan for weather and logistics impacts, and other customer-related factors.

The technology changes in retail are inspiring a whole wave of retailer innovation to unify efforts across all digital and brick and mortar storefronts, compete and win in the new reality.

Physical locations are now a huge advantage for traditional stores trying to make it in the digital age. With so many product and multiple locations, retailers should take advantage of their brick-and-mortar stores and enhance the consumer experience with their online strategy. Pursue ship-to-store, ship-from-store, buy online pickup in store (BOPIS or BOPUS), delivery lockers and other methods to get goods in the hands of customers. Stores are also enabling a better consumer experience with built-in centers for online order returns, exchanges and refunds.

The secret to retail success today requires you engage consumers and market with a true omnichannel offering that leverages e-commerce, social media, bricks and mortar stores, and every channel in between to reach new customers and build preference for existing customers. Make it easy, fast, convenient and consistent in how you deliver brand through consumer-focused shopping experiences.

Across the retail ecosystem, the assumption that consumers are motivated by price appears to be shifting. Yes, price is a factor, but so is effective merchandising and offering products consumers want. Even more vital is the elevation of omnichannel as a growth strategy central to building the business, not just a sales and delivery “project” to tackle.

We are now entering a new era of retail where the industry is moving beyond omnichannel into the age of Unified Retail. In this new reality where consumer behavior and expectations are driving the evolution and future of retail, the “old school” retail basics of location, location, location; effective merchandising; and supply chain efficiency are right up there with Unified Omnichannel.

Welcome to the era of Unified Retail.

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