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How data can help you cut warehouse costs in 2017

How To

WRITTEN BY Paul Mullin /

09 January 2017

We all have New Year’s plans, whether it’s to lose a few pounds, become more mindful or to treat yourself more, and those resolutions also happen in the business space as well. This is the time of year to think about how your company can become more efficient and cost effective, a time to start thinking where you can save money and channel resources in a better way.

After a peak period it’s only natural for companies to become uncertain about revenue and their business models, which may prompt them to take a step back and have a deeper look at their operations.

How data is helping cut costs

Data analytics has the ability to affect every aspect of an e-commerce business, from strategy to the supply chain. One of the most problematic challenges that e-tailers face is the large percentage of product returns, especially after a peak period.

With each return received, e-commerce companies are able to build huge amounts of data on their customer base and their own operations. Returns provide data on reason for returns i.e. faulty item, poor fit etc.…) and with a large amount of this data we can uncover patterns and even predict the probability of return.

This will enable you to take actions to avoid this volume of returns in the future. For example, you could suggest the size of a product to a customer based on their past buying and return history.

Refining the supply chain

This use of data also has implications for the supply chain. In the areas of warehouse and fulfilment we can see that predictive analytics is becoming ever more important, and it’s helping to sync up the entire e-commerce operation.

Amazon is one of the companies leveraging big data and predictive analytics to anticipate what items need shipping to where, well ahead of time. It uses data to transport billions of items throughout its 200 plus fulfilment centres across the globe, leveraging data such as purchase history, weather and economic situation.

Cut costs by focusing on the customers you have

It can be six times more expensive to win a new customer than to retain an existing one. Yet, despite this, many e-commerce companies still pour most of their time, energy and money into acquiring new customers. Companies can leverage data here as well to predict customer churn through buying patterns and engagement levels. With this information you will be able to better target your existing customers and personalise offers just for them.


Data will continue to transform the warehouse space in 2017, especially as more and more move towards the cloud. E-commerce companies of all sizes are now creating strategies that will take their application from the data centre to the cloud, while the actual data itself will reveal more and more immediately actionable data insights.

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