Dropshipping might not sound like the flashiest segment of the high-tech world of fashion e-commerce, but it’s a strategically key component of expanding product line visibility and increasing revenues.
“As many retailers continue to see downward pressure on their sales, they are looking for innovative ways to sell their products,” explains Howard West, Branded Online’s Chief Product Strategist. “While most retailers continue to see overall sales shrink year over year, large and small retailers alike are seeing significant growth opportunities in the e-tail space. Dropship services for retailers are a significant part of any brand owner’s e-tail growth strategy.”
West gives the rundown on how Branded Online can help fashion and beauty brands manage the many complexities and nuances behind a successful dropship program.
What is dropshipping?
Dropshipping is when another party—other than the brand owner—is marketing and selling products, but when an order is placed, the products are shipped directly from the brand owner to the consumer. This process allows large retailers to expand their product selection via an app or online store without having to actually inventory that product.
What makes dropshipping challenging?
Meeting customer expectations: High-end retailers, like Nordstrom and Macy’s, have high expectations on the customer experience. It’s very important that brands keep an accurate inventory reading so that retailers aren’t selling products that can’t be fulfilled and negatively impacting this experience. You can do harm to your brand by opening yourself up to a dropship scenario if you don’t have the infrastructure in place to support these expectations.
Managing logistics: Being able to consistently meet SLAs (Service Level Agreements) is another challenge for brand owners. For example, a department store might have the expectation that when they send an order to a brand by noon, that order needs to be picked, packed, and shipped the same day. If you’re not meeting the agreed-upon expectations, they may no longer carry your products.
Processing returns: Many retailers handle the return process themselves under their previously established returns process. However, there are some situations when the order comes back to the dropship brand owner—for instance, when a product is undeliverable or refused upon delivery. Being able to quickly process these returns and communicate with the retailer is imperative to a healthy consumer relationship.
Complying with packaging requirements: Packaging must be appropriate for the product being shipped. Retailers may require custom packaging and inserts as well as branded packing slips and shipping labels. Being able to manage multiple shipping accounts across multiple retailers can introduce challenges. There are many nuances that go into building a successful dropship program—and brands need to have effective and accurate systems and processes in place to ensure success.
Operational infrastructure: For many brand owners, dropshipping a single order to a customer can be a significant challenge. Often, fulfillment systems and processes in place are designed for bulk sales, so a single product order in many cases can result in manual intervention and introduce room for error.
For example, for some brand owners, picking a single item order might look something like this: a worker grabs a lift truck, pulls down a pallet, opens a box, then opens up a master case, opens another box, finds the right size, re-boxes that item, and then ships it. Automating and managing inventory in order to provide a great shopper experience is where Branded Online can help provide technology and services that helps manage these types of scenarios.
How is dropship evolving?
Retailers are embracing innovative, omni-channel marketing strategies as they continue to combat the e-tail revolution. This requires brand owners to keep up with technology and infrastructure investments in order to meet the demands of their most successful retailers.
Making products, wherever they are, easily available to the customer is just part of the overall picture. In order to create seamless experiences, it is necessary to access accurate inventories—which may be in a store or a warehouse or in transit—and to be able to communicate consistently the right product information and deliver on customer expectations.
The key is not to focus on keeping up with Amazon or Walmart, but how to differentiate your brand experience from the rest. Having the right partner to provide a consistent operational experience so that brand owners can innovate and differentiate is one of the ways where Branded Online can help brand owners.
Picture this: a customer visits a retailer with a personal shopper. As the personal shopper finds products and styles for this customer, they might use technology like augmented reality to show how styles that the retailer does not hold in stock might look on the customer. The shopper can make the purchase right there and have the products delivered directly to the home, or the shopper can pick them up and try them on the next day at the retailer.
For a brand owner, this means making certain they have provided the retailer with the right mix of photography and product content, making sure that inventory and sizes are 100% accurate, and having the infrastructure to dropship that order immediately following the decision of the customer either to the shopper or to the retailer. As a brand owner, being able to support these retailer innovations is a must in order to succeed.
Imagine going into a high-end boutique, standing in front of a mirror, and being able to digitally interact with, drag and drop, and try on clothes virtually thru technology, then trying on shoes or accessories via the mirror, placing an order with your phone via a mobile payment app, and having all of these products delivered from multiple brands directly to your home via dropship. This is happening today, and as a brand owner, you must be looking ahead to make sure you can support these types of sales processes.
How can Branded Online help make dropship sexy?
The reality is that e-commerce operations and logistics are unlikely to make anyone’s “top turn-ons” list. But if you’re not managing inventory and infrastructure properly, your online business is likely to struggle and ultimately fail. Beyond that, new technologies that enhance the retail shopping experience require that brands understand the investments retailers are making and react appropriately with a strong dropship experience.
Branded Online is the leader in providing fashion and apparel brands with the technology, infrastructure, and expertise that help brands succeed in navigating these challenges. Contact us to learn more about how we fuel ecommerce solutions.