In the lead-up to Manifest 2022, the leading conference focused on innovation in logistics and supply chain, Conference Chair Pam Simon is sitting down with leaders that are redefining what’s possible.
One of those leaders is our own Manish Chowdhary, who sat down with Pam to talk about the future of eCommerce order fulfillment. Cahoot, recognized as one of the World’s Most Innovative Companies in 2021, is empowering eCommerce merchants to offer fast and free delivery to their customers with a unique peer-to-peer platform.
Demand for eCommerce order fulfillment will continue to grow
The changes in shopping behavior brought by COVID are here to stay (and then some), says Manish. eCommerce sales grew an incredible 44% year-over-year from 2019 to 2020, pulling forward many years of demand. Far from reversing, though, 2021 is projected to see another 18% jump over 2020.
Online sales growth, and thus demand for eCommerce order fulfillment, was primarily being driven upwards slowly and steadily by generational change prior to COVID. The pandemic, though, forced those that weren’t inclined to shop online to do so – and they discovered that they liked it. At the same time, companies large and small made enormous investments in multichannel order fulfillment, further increasing the convenience and ease of online shopping. Curbside pickup, same-day delivery, and vastly improved shopping portals are all here to stay, along with customer behavior.
How can merchants future-proof their eCommerce order fulfillment?
Don’t end up like Macy’s. Manish relates the story we all know now,
“In the 70’s, 80’s, and even 90’s, the Macy’s of the world went and built tons of buildings, got tons of leases, and then the consumer behavior changed. Those very assets that were helping them expand and grow became a liability.”
Big merchants that take the traditional approach of investing heavily in buying & building warehouses across the country tie up significant capital and run the risk of choosing the wrong locations. Moreover, warehouse space and personnel have never been more expensive – warehouse space is at an all-time low, and there are an incredible 400,000 open job positions for frontline eCommerce order fulfillment workers. A mid-size merchant that builds a second fulfillment center in a sub-optimal location will have the worst of all worlds – they still won’t be able to cover enough of the country with 2-day shipping, and their capital will be tied up in expensive real estate.
Outsourcing fulfillment to a provider like Cahoot, on the other hand, enables merchants to offer an Amazon-like delivery experience while keeping costs low. Customers expect fast and free shipping, and on top of that, Amazon keeps raising the bar for what ‘fast’ means. A distributed US fulfillment center network like Cahoot strategically deploys its customers’ inventory in multiple nodes across the country and can offer 99% 2-day and over 40% 1-day coverage. This level of service, in fact, enables Cahoot to provide Seller Fulfilled Prime (SFP) to its customers – something very few other 3PLs even attempt.
Critically, Cahoot has dozens of fulfillment nodes, so as customer demand and needs shift, it can instantly shift its customers’ fulfillment profiles to match. Some merchants are familiar with the pain of signing up with a 3PL to extend their reach – only for sales to grow in a different part of the country, and to be back at square one. Cahoot’s eCommerce order fulfillment network has redundancy across the entire United States, and it solves present and future fulfillment needs for its clients.
What does Cahoot do differently to future-proof eCommerce order fulfillment?
Every other order fulfillment network is constrained by the warehouse and labor shortage – but not Cahoot. Cahoot is a first-of-its-kind peer-to-peer order fulfillment network that enables merchants to fulfill orders for one another. This ingenious design solves the capacity crunch by unlocking latent warehouse capacity and monetizing it for the fulfilling merchant.
The idea was born out of ecommerce sales research. While looking at order profiles for a different project, Manish and his team realized that merchants on opposite coasts were selling identical products to people on the other coast. That is, a merchant in LA would sell a widget to a customer in NYC, and a merchant in NYC would sell the exact same widget to a customer in LA. They’d then both ship the product across the country – what a waste! This inefficient process hurt growth with slow deliveries, ate margins with long deliveries, and hurt the environment with extra emissions. Cahoot was born to help merchants solve this issue.
It quickly grew to be more flexible and inclusive – any merchant with an excellent warehouse can fulfill orders for any other merchant, regardless of what’s being sold. In fact, Cahoot’s intelligent platform and shipping software optimize each and every label printed to ensure that a product ships from the lowest-cost warehouse that will offer a speedy delivery.
Find us at Manifest 2022
On January 25-27th, 2022, Manifest will bring together the most comprehensive ecosystem of innovation and transformation in LogisticsTech and end-to-end Supply Chain. We’ll be there, talking about the future of eCommerce order fulfillment with anyone and everyone! Come find us – we’d be happy to see you.