Fulfillment Trends and How Brands Can Capitalize on Them
As a 3PL, we generate a lot of data. We use this data to make strategic business decisions and ensure that we’re able to deliver for our clients. We also use it to capture trends that we can share with our client base with the intent of helping them identify growth opportunities.
Coming out of 2023, here are a few data stories and trends we found interesting…
Growth Goes International
In 2021, we fulfilled 8.1 million units internationally. That number grew 17% in 2022 to 9.5 million. But in 2023, we processed 20.9 million units internationally, resulting in a 120.6% jump compared to 2022.
Why the massive leap? We can point to a few factors. One of our leading beauty brands opened up to Sephora Europe in 2023. They worked hard to grow their Sephora presence in Canada, the Middle East and Australia as well. There were also a handful of regulatory changes that created opportunity for the brand. (Side note: We keep our finger on the pulse of commerce legislation both in the U.S. and internationally to help our clients evaluate markets and opportunities.)
As our client entered new Sephora markets, we scaled with them.
Takeaway: If you’re only selling domestically, let’s talk about how you might be able to expand internationally. The growth opportunities are too significant to ignore.
Celebrity Brands Skyrocket
We handle ecommerce and retail fulfillment for a number of celebrity-backed brands. We don’t name names, but you’d know more than a few of them. In 2021, our celebrity-backed brands accounted for 16.6 million units shipped. In 2022, that number grew to 27.7 million, or an increase of 67%. As for 2023, we fulfilled 60 million celebrity-backed units, more than doubling our 2022 volume.
Takeaway: While your brand might not be celebrity-backed, you can get in on the amplification effect celebrities have. Ultimately, celebrities leverage the influence they have over their audiences. If you can identify influencers (who may not be traditional celebrities) who have your audience’s attention, reach out! Even folks with modest (yet still large) followings are eager to monetize. You might just find some relationships that are mutually beneficial.
High Volumes, Rapid Growth and Spikes? No Problem.
In 2023, we fulfilled 170.7 million B2B units at an average wholesale value of $9 per unit, resulting in a gross wholesale value of just over $1.5 billion.
In the same year, we fulfilled 41.4 million ecommerce units at an average value of $29 per unit resulting in a gross merchandise value of 1.2 billion.
But if we drill down deeper, we uncover more insights. For example, in 2023, we shipped 45 million retail units for one brand alone. That’s an average of more than 180,000 units per day. Similarly, we had another brand scale from 15,000 orders per month to 100,000 in less than a year. Finally, another one of our celebrity-backed beauty brands regularly saw 10x spikes in orders. As we onboard and engineer fulfillment solutions with our clients, we plan for scenarios like these so that we can handle the volume and meet expectations.
Takeaway: As you vet fulfillment partners, think about how they can scale with you – even when you least expect it.
Hazmat Happens
Capacity is certified by the International Air Transport Association (IATA) to ship hazmat consumer products via ocean, air and ground. In 2022, we filled 545,000 hazmat orders. In 2023, that number increased by 32% to 718,000.
Why the increase? Not all 3PLs do hazmat fulfillment that meets IATA standards. We do. And we think our clients recognize the value. We believe in being good stewards not just for our brands but for the industry as well.
Takeaway: If you’re in the hazmat consumer product world, double check how your 3PL is handling it. And then call us.
Retail for the Win?
According to our data, brick and mortar is far from dead. From 2021 to 2022, we saw retail bounce back from pandemic effects with a 65% jump in units fulfilled. But that growth continued at a 27% clip through 2023.
On the ecommerce side, year-over-year growth rates from 2021 to 2022 and 2022 to 2023 hovered around 45%.
Takeaway: Don’t count retail out. If you’ve been thinking about expanding into B2B, now’s the time to develop a strategy.
Have a Particular Number You’re Interested That We Didn’t Cover?
Get in touch. We’ll bring the data.