The fulfillment service is just starting out on the Polish market, but 97% of customers are already satisfied with it. Moreover, Polish logistics operators can expect an increase in interest in their services in the near future.
In B2C sales, and this form has dominated the Internet, meeting customer expectations is a real challenge–the competition is huge, and the contractors themselves often make one-off purchases. This makes the fight for their loyalty extremely fierce. Therefore, a single error in the packaging or delivery of the product may discourage the buyer forever. No wonder that salespeople seek help from professionals. Currently, 30% of eCommerce companies already use logistics outsourcing, and the forecasts say that the trend will grow–within three years, this percentage may double.
Logistics is gaining in value
In the next few years, fulfillment can conquer Polish logistics, but at this moment, it is still quite a niche service. Nevertheless, there is a difference in the perception of all logistics processes, which have come a long way–from a pure servant function to a change initiator, e.g., by offering non-standard packaging options or innovative customer service tools.
For instance, at Omnipack, we offer access to the Merchant Portal and Return Tool–modern systems that allow for ongoing insight into warehouse operations and handling of returns.
sample module in Merchant Portal
The fact that Polish logistics is beginning to be noticed by foreign contractors is also optimistic. Our unquestionable advantages are the central location in relation to entire Europe, the presence of key CEP entities (Courier Express Parcel), and access to the qualified, but relatively cheap workforce. These benefits are used by large, foreign players, mainly from
Western Europe and Scandinavia. Examples include Amazon and Zalando, which from Polish logistics centers ship to individual customers. Another opportunity for Poland is the growing awareness of the fulfillment service and the price pressure exerted by Western sellers.
The biggest challenge for eCommerce
Online trade brings many challenges–contact with the customer, and marketing or product development are just some of them. These issues will also be crucial in stationary sales.
The biggest distinguishing feature, however, is logistics, which plays a key role in eCommerce.
“There are many talks about the logistics needs of online stores, and the very dynamics of eCommerce growth make this area extremely attractive in terms of business. As a result, virtually everyone who has a warehouse offers logistic services for e-shops. However, this segment has completely different requirements that most entities are not able to respond to today. This translates into the quality of the service provided and imposing restrictions on the business model of the online store they support” – says Rafał Szcześniewski, founder & COO at Omnipack.
That is why it is so important to choose an operator that is fully focused on serving the eCommerce segment. What should you pay attention to in particular?
- Does this operator offer personalized packaging options that are often used in the fashion and beauty industry?
- Do they handle returns? According to the National Retail Federation data, in the fashion industry, returns can be up to 60%!
- Do they have expiry date supervision systems, appropriate approvals, and controlled temperature–necessary in the cosmetics and food industry?
- Does the operator have the appropriate infrastructure adapted to the storage of specific products, e.g., cardboard racks for the fashion industry or restricted access zones for particularly valuable products, such as electronics?
Cardboard racks in the Omnipack warehouse
What do clients think about fulfillment?
As previously mentioned, in Poland, 30% of sellers use the fulfillment service. However, this does not mean that they implement all their logistics processes based on external operators–on average, they outsource only 40% of their own operations. They do the rest on their own. The vast majority, almost 98%, are satisfied or very satisfied with the cooperation with an external partner.
What are the benefits of fulfillment?
Among the most frequently mentioned benefits of using outsourcing, sellers mention:
- Time savings
- Increasing the quality of logistics services
- Fewer problems with seasonality
- Greater development opportunities in new markets
Entrepreneurs who carry out logistics on their own indicated the following reasons why they did not decide to entrust the operation to external entities:
- Willingness to maintain direct contact with the goods
- Better ability to respond to customer needs
- Insufficient knowledge of operators
- Belief in a higher quality of self-funded services
Comparing these concerns with the benefits indicated by the users of the seller's fulfillment, they may turn out to be unfounded. Entrepreneurs who are reluctant to outsource are afraid of a decrease in the quality of services provided, and the improvement of quality is one of the main advantages of using fulfillment.
Forecasts for the future
The developing market of fulfillment will face a big challenge of acquiring new contractors. Is there a potential for change among eCommerce companies that do not use external services? Definitely yes! It is true that only 0.5% want to outsource logistics within 1 year, but if this time were extended to 2 years, it would be 11%, and up to 5 years–15% more. A large group of undecided (31%) can also be an opportunity for operators.
It is this group’s education and awareness of the advantages of fulfillment that will largely determine the development potential of the service in Poland. It can be complicated because as many as 29% of stores do not monitor the costs of warehousing, completing, packing, and shipping goods in any way. On the other hand, salespeople who carry out such analyzes tend to underestimate these expenses–they do not take into account, for example, the costs of warehouse space, technology or their own time spent on supervising operations. If you managed to convince a group of undecided ones, which factors are crucial for them when choosing an operator?
- Clear and transparent price list
- The flexibility of the available warehouse space
- The ability to handle sales peaks
Considering all the factors described and the trends visible abroad, it can be safely stated that Poland's fulfillment market has huge prospects ahead. The vast majority of stakeholders notice its benefits, and skeptical sellers may change their opinion within a few years. A lot will also depend on the operators themselves, who still have a lot to do in terms of education and explaining the benefits of the service itself.
The article is based on the GS1 Polska report–"Fulfillment in e-commerce Use of GS1 standards in the area of fulfillment operators' activities".