The fact that retailers are today facing a complex situation doesn’t come as a surprise: end-customers are extremely powerful and have been “spoiled” by e-commerce giants such as Amazon, who offer them value-added services that are today considered standard by most. These new standards entail a new logistics and shipping organization.
Furthermore, in order to be competitive, retailers need to consider their customers’ expectations: free shipping, next-day delivery, free returns, alternative delivery locations… every detail becomes part of the game. As you know, the internet gives access to several websites where a potential customer is able find the same same product for the same price (more or less). Sometimes, his decision will be based on the delivery or return options proposed by the merchant. That is why 3PL partnerships are today vital in order to make the difference.
All these aspects are analysed by Merryll Douglas on “Inbound Logistics”. You can read the introduction to the original article here and share your insights in the comment section. If you want to read the full article, click on the link below.
To keep customers happy, retailers play a daily game of beat the clock. For some retailers, smart supply chain management strategies and 3PL partnerships keep the orders flowing. For others, well… time may be up.
Bricks and mortar aren’t dead yet. According to Census Bureau estimates, just 7.8 percent of all U.S. retail sales in the first quarter of 2016 took place online. But that’s a good deal more than one decade ago, when online sales for the first quarter of 2006 amounted to 2.8 percent of the total.
And among people who already favor online shopping, the allure of e-commerce continues to grow. That group made 51 percent of its purchases online, up from 48 percent in 2015, according to a 2016 survey of 5,000 online shoppers, conducted by comScore for UPS.
Technology continues to reshape the retail world. As more consumers click to buy, e-commerce giants such as Amazon put increasing pressure on merchants of all types to offer more flexible shopping choices—both in-store and online—and faster fulfillment. Omni-channel options? Next-day delivery? Free returns? Shoppers want it all. And successful retailers keep honing their strategies to meet their demands.
Are retailers ready to deliver? Maybe not all of them. For example, in a survey conducted by consulting firm McKinsey at the World Retail Congress in April 2016, only 21 percent of respondents said they are more confident than one year ago in their ability to deliver omni-channel experiences. Another 45 percent say they are making progress too slowly.
Another set of opportunities and challenges arises as retailers globalize their operations. Whether they open locations in new countries or use the web to reach across oceans, companies selling to consumers in international markets have to refine their distribution strategies.
SAME LOOK AND FEEL
Retailers are looking for better ways to respond to consumers’ embrace of omni-channel shopping, and their desire for a convenient, seamless process. “Whether they’re on a retailer’s app, or on a website, or in a store, they want it to look and feel the same,” says Louis DeJianne, director of consumer goods and retail marketing at UPS in Atlanta. (…) “Customers want it as fast as possible, where they want it delivered, and how they want it delivered,” says DeJianne. As merchants position inventory in their distribution centers (DCs) and stores, they must consider the costs attached to holding that product. “Figuring out inventory allocations and inventory visibility is a key step,” he adds. Besides working toward the best omni-channel approach, retailers are trying to take the best possible advantage of the ship-to-store strategy. “They’re trying to figure out how to drive more consumers to their stores to pick up the items,” DeJianne says. Shipping several e-commerce orders to a store, using a merchant’s own transportation network, costs less than shipping individual orders to consumers’ homes. (…)
The desire for a flexible omni-channel experience extends to returns. “The easier a retailer can make returns for consumers, the more comfortable they will feel about purchasing that product,” DeJianne says.
Especially in urban areas, a courier (…) can’t safely leave a package on a customer’s doorstep when no one is home. If the customer is out, the package doesn’t arrive as expected, which frustrates demanding consumers. “With an alternative delivery location, consumers can receive that package on the same day,” DeJianne says.
(…) Demand for greater speed and flexibility is growing thanks to expectations set by two kinds of participants in the retail market. One is Amazon; the other is the new wave of local delivery services from companies such as Uber and Deliv. (…)
If the retailer relies on a partner to add last-mile delivery options, along with cost the merchant must also consider how delivery affects the brand and the consumer’s experience. “Given that the delivery person is the last touchpoint to the customer, it’s critical for retailers that the interaction be a positive one,” Naik says.
Merchants and their delivery partners must collaborate to make sure that the interaction with customers enhances the retailer’s image and reputation, and encourages future sales, he adds.