Order consolidation: One box, many benefits

E-commerce has revolutionised the way we shop, but it also has its challenges: fragmented orders, rising logistics costs, and the growing environmental impact of packaging waste. Order consolidation offers a solution. 

By bundling items into a single shipment, brands can deliver greater convenience, lower costs, and reduce their environmental footprint. For customers, it’s about simplicity; for businesses, it’s about smarter logistics and profitability. With the rise of logistics solutions like ZEOS leading this innovation, order consolidation promises to redefine how fashion brands operate.

What is order consolidation?

Order consolidation is when items from different brands are packed together into one box to be sent to the customer. In some cases, even different orders from a certain time window can be packaged together for even more efficiency. 

There are two types of order consolidation: 

1. Order bundling: Items from different brands are packed in a single box and shipped together. Returns are also streamlined–customers can send all items back in one package. 

2. Order consolidation: Orders placed by the same customer within a specific time window are combined into one shipment. 

The case for consolidation

Customers are demanding more convenience, speed, and sustainability than ever before–even as costs continue to rise. Meeting these demands creates logistical challenges: Smaller basket sizes–fueled by impulse buying and increasing return rates–have strained traditional fulfilment models, often resulting in higher costs and inefficiencies. 

How order consolidation helps

Fragmented orders mean more deliveries, more packaging, and higher emissions. Consolidation, on the other hand, solves these challenges. 

Enhancing customer satisfaction: A survey of Zalando customers in Germany, Austria, and the Netherlands revealed that 82% of respondents prefer receiving their orders in one package, even if it requires an additional 2-3 days of waiting*. Key drivers include:

• Convenience: Receiving all items together simplifies unpacking, trying out, and returning items.
• Sustainability: Many customers feel more responsible by reducing packaging waste and emissions associated with multiple deliveries. In a Consumer Insights survey done by Statista for online shoppers in Germany in 2023, 44% of respondents considered packaging waste as an important criterion in terms of delivery. 

Cost savings: Order consolidation allows brands to share logistics costs across multiple items, potentially reducing shipping and return costs by up to 20%. 

Environmental impact: In 2023 alone, order consolidation helped ZEOS avoid shipping millions of parcels, saving 66,000 tons of CO₂–the equivalent of removing 50,000 cars from the road for a year. 

Enhances customer lifetime value (CLV): Order consolidation enhances the customer lifetime value (CLV) by fostering trust and loyalty through superior post-purchase experiences. 

Boosting profitability: By bundling orders, brands can offset smaller basket sizes by reducing operational inefficiencies and improving profit contribution per order. This focus on logistics efficiency ensures brands can reinvest in customer-centric innovations.  

The benefits are clear: fewer deliveries, reduced waste, and a more seamless shopping experience. But what do flip-flops, guilt, and sustainability have to do with order consolidation? Dive into Business Casual with Dominik Bertram, VP of Fulfilment Core at Zalando, for insights on how one box can transform logistics into a win for customers, businesses, and the planet.

Who can benefit from order consolidation?

Order bundling and consolidation offer advantages for many types of brands and retailers, especially those operating in ecommerce or managing extensive supply chains.

Fashion and lifestyle brands: Fashion and lifestyle brands often deal with a diverse product assortment, from clothing and accessories to footwear and beauty items. 

Multi-brand marketplaces: Marketplaces selling products from multiple brands stand to gain the most from order consolidation, but saving on logistics costs and providing a unified delivery experience. 

Direct-to-consumer (DTC) brands: DTC brands often prioritise customer experience and cost efficiency. Consolidation allows them to enhance delivery satisfaction and differentiate themselves by offering sustainable and convenient shipping options. 

What challenges are involved in order consolidation?

While order consolidation offers numerous advantages, it also comes with some challenges: 

1. Balancing speed and sustainability

Consolidation often requires waiting for additional orders to come in or moving items between fulfilment centres, which can delay delivery. In contrast, platforms like Amazon prioritise speed, sometimes at the expense of sustainability.

2. Complexity in inventory management

Ensuring high-demand items are strategically placed for easy consolidation requires advanced algorithms, which not all brands have the resources for.  Moreover, moving items between fulfilment centres adds logistical complexity and cost.

3. Customer expectations

While many customers prefer sustainability, others prioritise fast delivery. Balancing these preferences requires clear communication about the benefits of consolidation. Brands adopting this model should communicate its benefits clearly to customers, emphasising how their purchasing choices contribute to sustainability and convenience.

4. High initial investment

Implementing sophisticated warehouse management systems (WMS) and predictive analytic tools to properly streamline order consolidation can be resource-intensive for brands and retailers.

So, how can brands still take advantage of a one-box solution while avoiding these challenges? Let’s take a closer look at how One Box operates at ZEOS, and how brands can leverage ZEOS Fulfilment.

The science behind One Box

At ZEOS, the process is simple:

1. Multiple brands or orders.

2. One box packed.

3. One parcel shipped.

4. One return processed.

But behind this simplicity lies a sophisticated logistical operation powered by advanced algorithms and a flexible fulfilment network:

How order consolidation works

1. Predictive storage

To enable seamless consolidation, items must be where they are needed—before they are ordered. Using predictive algorithms, ZEOS proactively moves high-demand products closer to customers. Returned items are also rerouted to the most relevant fulfilment centres, ensuring availability for future orders.

2. Smart wait windows

Zalando’s data reveals that customers often make additional purchases within 40 minutes of their first order. By instituting a 2-hour wait window (extended to 6 hours during peak times like Black Friday), fulfilment systems can combine multiple orders efficiently.

3. Flexible fulfilment

The fastest fulfilment happens when all items are located in the same fulfilment centre. When they aren’t, Warehouse Movement Order (WMO) comes into play. Items are transferred between facilities and consolidated at the centre closest to the customer. While this can add a day to delivery times, it significantly reduces the number of parcels shipped over all.  

4. Streamlining processes 

Zalando’s proprietary Warehouse Management System (WMS), ZalOs, is a tailored-to-fashion software solution designed to optimise and manage warehouse operations, ensuring seamless integration across the processes of receiving, storing, picking, packing, and shipping goods.

Here’s what the process looks like:
I. Grouping: An algorithm groups items efficiently for picking.

II. Picking: Once picked and batched, items are placed in containers and flow into sortation on a conveyor belt.

III. Sorting: Sortation is a manual process in which items are added to shelves, with one order per shelf. From there, the items are packed and shipped.

Partnering with logistics experts like ZEOS enables brands to leverage sophisticated technologies and predictive algorithms to enable order consolidation without heavy capital investment. 

One box for a win-win-win

Order consolidation isn’t just a logistical strategy; it’s a paradigm shift that meets the demands of modern e-commerce–efficiency, sustainability, and customer delight. For fashion brands, it offers an unparalleled opportunity to lead in sustainable practices while enhancing profitability.

As solutions like ZEOS pioneer this innovation, the path forward is clear: a consolidated approach to e-commerce fulfilment that benefits brands, customers and the planet. 

*Zalando Market Research for Germany, Austria, and the Netherlands in 2020. 

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