Given the advances of Amazon Prime over the past few years, merchants have been forced to innovate and become more competitive in the shipping and fulfillment arena. Online shoppers now expect low cost or free shipping delivery options within 2 days as well as very short lead times for buying online and picking up in store (BOPIS). Fortunately, Magento provides many great tools and capabilities to help merchants deliver what customers expect. When leveraged appropriately merchants using Magento are now able to provide delivery and pickup options that better compete with leading market places such as Amazon and Walmart.
Magento Order Management
The first piece of being able to provide competitive shipping, delivery and pickup options is for the website to have immediate access to product inventory stock and location information. Launched at the beginning of 2019 Magento Order Management makes it possible to orchestrate demand and supply across multiple sales channels and sources of inventory. Merchants are able to:
- Turn stores into mini-distribution centers
- Create and expose a single view of orders and inventory across channels
- Provide customers with flexible omni channel fulfillment options
- Handle complex order & fulfillment needs such as back-orders and BOPIS.
- Intelligently automate sourcing across channels
Providing customers with low cost shipping delivery options and BOPIS requires a robust integration between backend fulfillment systems and the website. The Magento Order Management product integrates to backend systems and adds a layer of logic below the website that allows Magento to track inventory across the entire warehouse and store network. By knowing where all product inventories are located Magento is able to offer customers shipping, delivery or pickup options from the closest warehouse or store. This lowers the cost of delivery and BOPIS turn around time, resulting in higher customer satisfaction and options that are competitive with Amazon.
In addition to tightly tracking inventory location, a robust delivery and BOPIS strategy also requires complex front-end logic. Many factors such as store hours, lowest cost carrier, package dimensions, hazmat restrictions, product customization lead time, perishable product specifications and international regulations must be factored in when providing shipping options to customers at checkout.
That logic can either be powered by a 3rd party plugin and/or custom developed on Magento. Two very popular 3rd party plugins that connect to Magento via API are ShipperHQ and Termando (also known as “Magento Shipping”). These tools allow site administrators to configure rate quotes based on many factors such as:
- Product and cart weight
- Product and cart price
- Product dimensions
- Product groups
- Package dimensions
- Customer group
- Shipping zones
- Location (warehouse and shipping)
- Major carriers (Fedex, UPS, USPS and DHL)
Rates can further be filtered via restriction, surcharges, discount and renaming rules to provide customers with highly competitive delivery and pickup options.
If a 3rd party tool does not provide all of the features required, additional customization can be performed. For instance, a merchant may want to compare rates from the major carriers and pick the lowest cost options for ground, overnight and 2nd day delivery while providing those options to the customer with a discount depending on the total value of the cart or the customer’s life-time value. For this type of need a custom module can be developed for Magento that works in conjunction with native features or 3rd party plugins. Being flexible enough to accommodate this type of high value customization is one of the things that makes Magento so great.
By leveraging Magento’s great order management and stock tracking technology plus 3rd party tools and customization, merchants are now able to be more competitive with fulfillment giants like Amazon and Walmart. Smaller merchants might not be able to offer the exact same level of shipping value as the big marketplaces, however by improving their shipping options and relying on other strengths that large marketplaces do not have (ie. brand and customer service) we believe smaller merchants can win back and gain online market share.