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How E-Commerce Accelerates Demand for Omnichannel Parcel Shipping Strategies

Looking ahead to peak season 2021, e-commerce order fulfillment is under the same – if not more – pressure than peak season 2020. Consumer demand continues to overpower the supply chain, and shippers are scrambling to overcome production bottlenecks, mitigate skyrocketing freight costs, and find more parcel capacity to achieve on-time delivery.

The key to success in this no-longer-unique-but-still-challenging landscape is agility, specifically in the form of omnichannel distribution strategies. Successful shippers will have the ability to pull multiple e-commerce order fulfillment levers – such as ship from distribution center or warehouse; ship from store; buy online pickup in store (BOPIS); buy online pickup curbside (BOPIC); and buy online, return in-store.  But to pull these various levers, shippers must have a distribution infrastructure in place that includes:

  • A cloud multi-carrier shipping system: A cloud multi-carrier shipping system seamlessly integrates with a retailer’s WMS, OMS, e-commerce, and ERP solutions to automate high volume, multi-carrier, omnichannel shipping. Regardless of which delivery option a customer chooses, the system automatically selects the right carrier service for each order according to parcel origin, parcel destination, carrier contracts, and business rules; and creates or acquires the tracking, labels, and documents. Therefore, retailers can satisfy customers’ delivery requirements and drive down the cost of shipping while transforming logistics into a profit center within the business.
  • A diversified transportation network: In addition to the traditional “big 3” carriers and regional logistics providers, an omnichannel distribution strategy that includes ship-from-store requires a local carrier network catering to the retail footprint; this network increasingly should include gig economy fulfillment carriers such as Shipt, Postmates, DoorDash, Instacart, and others, to meet fulfillment schedules (often same or next day)

Strategies to Improve E-Commerce Parcel Shipping

The truth is, if you don’t already have omnichannel distribution strategies in place, it might be too late for peak season. But that doesn’t mean you can’t start planning now for next year. Here are some things to consider:

  • Prioritize cloud. Executing shipping fulfillment workflows with an on-premise software system requires manual touches from people and equipment to help parcels move efficiently. Shipping operations are dependent on their own servers to scale, maintain security, and remain compliant with ongoing carrier updates. Not surprisingly, when faced with a surge in demand or a supply chain disruption, bottlenecks occur. And when orders don’t make it out the door in time, customer satisfaction is at risk.In contrast, a cloud-based supply chain improves a shipper’s abilities to anticipate risk, improve transparency and coordination across order fulfillment workflows, and manage issues that arise from increasing distribution complexity. With the cloud, you can maintain on-time delivery rates while reducing operations costs in any shipping landscape. The right solution will perform no matter the number of parcels moving through your distribution network each day, and you can integrate your parcel shipping system in the cloud with supply chain technology such as WMS, OMS, and e-commerce systems – quickly simplifying the complexity of omnichannel distribution by seamlessly sharing critical order fulfillment information throughout the organization. Suddenly, you can execute any parcel movement – ship-from-store, BOPIS, same-day-at-home delivery, and more – all at the optimal cost and with no manual intervention.
  • Implement Control Tower and Business Intelligence Technology Numerous shippers have started prioritizing improvements in parcel delivery tracking and transparency across all carriers in their transportation network by utilizing Control Tower technology, which provides greater visibility into a product’s delivery journey and flags potential delivery disruptions to improve customer service.And when a cloud-based Control Tower is paired with Business Intelligence technology, shippers can normalize shipping data and execute quick, real-time analyses. Companies have loads of information at their fingertips and can look at their transportation costs in a deeper way, identifying problems, zeroing in on their root causes, and uncovering opportunities to improve. With better information, shippers gain the necessary flexibility to continuously optimize their fulfillment and shipping strategies in any shipping scenario and transform fulfillment processes while slashing costs over the long term.
  • Expand your carrier network. Capacity crunches impede a shipper’s ability to meet their customers’ on-time delivery expectations. With major carriers like UPS and FedEx routinely announcing increased shipping surcharges and daily package capacity caps for peak season, while also dropping smaller freight clients altogether, shippers are rightfully seeking more regional and local carriers to incorporate into their carrier networks to pick up the slack. Regional and local carriers can usually offer next-day ground delivery within 400 miles of a shipment’s origin – often at a lower rate and with fewer surcharges than national carriers.

Power Omnichannel Distribution with Logistyx

The right technology will improve e-commerce order fulfillment and enable you to successfully meet increasing demand. To learn more about how Logistyx can modernize your workflows for peak season and beyond, watch our webinar: Embrace the Unprecedented Pace and Scale of Parcel Shipping Technology.

How Carrier Capacity Impacts E-Commerce Shipping Solutions

Understand how carrier capacity can negatively affect e-commerce shipping rates and delivery timelines.

Online retail sales gained traction once again in the first quarter of 2021, up a dramatic 39%. The cause? An uptick in online shopping due to COVID-19. But while the trend may have begun because of shutdowns and store closings, it’s expected to continue into peak season due to convenience – even as stores reopen their doors.

Unfortunately for e-commerce retailers, this demand for online shopping may outweigh its rewards. With national carriers at capacity, many retailers aren’t enjoying typical benefits such as discounted rates and shipment pick-up flexibility, largely due to vehicle and manpower shortages.

In this blog, we’ll help you understand how carrier capacity can negatively affect e-commerce shipping rates and delivery timelines as well as outline how a multi-carrier shipping solution can help you surmount carrier capacity issues – setting you on the path to success in 2021 and beyond.

How Carriers at Capacity Affect E-Commerce Retailers

National shipping carriers can’t keep up with the increase in e-commerce demand brought on by the pandemic. Although shipping carriers are trying to expand their capacity as quickly as possible, a lack of workforce and ships, trucks, and planes have left them behind.

The Wall Street Journal stated last month, “Shipping costs have tripled since last year, but merchandise comes in up to 45 days late.” This dynamic has made it difficult for retailers to compete with same-day/next-day delivery behemoths such as Amazon and compromised their customer relationships. Without the ability to meet customers’ demands for “delivery now,” once-loyal customers have instead turned to brands who promise convenience in the form of 2-day shipping and easy returns.

What’s more, carriers aren’t offering the benefits they usually would. For example, an e-commerce retailer may have a warehouse outside their shipping carrier’s typical pick-up range. Traditionally, however, if the retailer is a big customer, the carrier may make an exception and pick up the parcels outside of the range.

But with an increase in demand, the carrier may not have enough trucks or workers to drive an hour out of the way to the retailer’s warehouse without charging extra or taking a long time to pick up the shipment. This either forces the retailer to pay more to ship their goods (which can lead to price inflation) or to look for a new carrier. Either way, customer satisfaction suffers, goods are delayed, and shipping is more expensive.

Though not every e-commerce retailer receives special pick-up benefits from their shipping carriers, almost all have been subjected to substantial surcharges and rate increases over the last 14+ months, as many large national carriers kept their 2020 holiday surcharges in place in early 2021.  Even more daunting: many national carriers are already announcing new holiday surcharges.

States FreightWaves about the most recent surcharge announcement from UPS, “The holiday surcharges, which kick in Oct. 31 and run until Jan. 15, will, as they did in the 2020-21 cycle, whack UPS shippers that tender the highest volumes. In extreme cases, surcharges will run as high as $6.15 per package.”

While e-commerce demand may diminish slightly as stores re-open, it’s not expected to get better anytime soon. And even though shipping carriers are increasing their workforce and fleets, it may take time for supply to meet demand – all of which means e-commerce retailers need a way today to find the best shipping options to get their packages to their customers efficiently, and at a low cost.

One answer? A multicarrier solution. Read on for the benefits of this smart shipping strategy.

The Benefits of a Multi-Carrier Shipping Solution

By integrating a multi-carrier e-commerce shipping solution into your supply chain tech stack, you don’t have to ship with just one carrier.  Instead, you can tap into an extensive carrier network that includes dozens of regional carriers, making it easier and faster to add and maintain carriers’ rates and services and enabling you to quickly react to carrier capacity limitations, surcharges, and rate increases to better control costs and maintain on-time delivery KPIs.

When you use a multi-carrier shipping solution to compare carriers, you gain visibility into which carrier really works best for each of your shipments, based on:

  • Location
  • Capacity
  • Shipping rates
  • And more

With this visibility in place, you can see which national, regional — and in some cases last-mile — carriers can help minimize the cost and maximize the speed of your shipment, automatically.

Note: Customers are concerned with convenience. If your e-commerce store has a physical location, consider integrating same-day carriers, like DoorDash or Instacart, as a shipping option. This takes the shipping burden off you and integrates a third party to satisfy your customer faster.  

And by adding a multi-carrier shipping solution like Logistyx to your supply chain tech stack, you also:

  • Create an agile logistics infrastructure that withstands complex supply chain issues
  • Improve transparency and coordination across your supply chain
  • Leverage Business Intelligence to make informed business decisions based on your shipping data, such as:
    • Change your inventory footprint: Move products from distribution centers to brick-and-mortar stores to better meet delivery timeframes, etc.
    • Expand your carrier network: Add new carriers to handle parcel deliveries, be it international or local
    • Compare last-mile/regional services against those from major carriers: Which carriers are best suited to meet delivery and cost expectations
    • Determine what types of orders can be shipped versus orders that customers can pick up

 

A multi-carrier shipping solution like Logistyx can minimize the effects of carrier capacity limitations on your business by giving you easy access to several different carrier options and more. To learn more about Logistyx’s solution, download our whitepaper, Simplifying Multi-Carrier Parcel Management for Peak Season and Beyond.

Digital Commerce 360 Top 1000 Report: Enormous Growth of E-Commerce in 2020, Wide Embrace of Omnichannel Services

The massive surge of online shopping experienced during the COVID-19 pandemic was substantiated in recent key findings from Digital Commerce 360’s 2021 Top 1000 Report, an annual ranking of North America’s largest merchants by e-commerce sales.

The Top 1000 retailers collectively increased their global online sales by 45.8% in 2020, by far the largest year-over-year growth in the decade since Digital Commerce 360 began tracking North America’s 1,000 e-commerce leaders.

While U.S. retail sales increased 6.9% in 2020, online purchasing grew more than four times as fast, growing by 32.4%. E-commerce accounted for the bulk of retail industry growth in 2020 – 74.6% – a big jump over 54% of retail growth in 2019.

The report notes, “As consumers across North America searched, often desperately, for essential items during the pandemic, they not surprisingly turned first to the best-known retailers.” Just the 12 largest retailers by web sales accounted for 70.9% of the growth in Top 1000 sales from 2019 to 2020, growing collectively by 54.8%.

In Digital Commerce 360 and Bizrate Insights’ omnichannel survey of 1,047 online shoppers in February 2021, 64% of survey respondents said they intend to order more online in the next six months, suggesting a persistent upward trajectory. As the online shopping landscape continues to rapidly evolve, retailers must consider advanced e-commerce strategies to meet customer expectations and stay competitive.

Growing Importance of Omnichannel Retail Services

Digital Commerce 360’s Top 1000 Report found wide embrace of omnichannel activities by online shoppers in 2020, with 58% checking product availability at their local stores and 43% ordering products online and picking up in-store.

Of the 75% of surveyed shoppers who completed an in-store or curbside pickup in the past six months, 22% did so 11 or more times. Shoppers were largely satisfied with these delivery alternatives; 48% of respondents scored omnichannel experiences a 9 or higher, while 46% issued a grade of 6-8.

Of the Top 1000 retail chains – companies that primarily sell through physical stores – the percentage offering in-store pickup of web orders grew to 73% in 2020 from 61.9% in 2019. There was a much bigger jump in the number of chains offering curbside pickup, which increased to 54.2% from 9.9%. Many retail chains also increasingly offered in-store returns, growing to 88.3% of store-based Top 1000 retailers in 2020 from 66.8% a year earlier.

Overall, online shoppers widely embraced omnichannel options from a variety of merchants, with specialty stores, grocery stores and retail powerhouses including Walmart and Target all attracting significant attention. In turn, the countless stores that adopted these options drove positive results and fostered growing interest.

A Cloud Multi-Carrier Parcel Shipping Solution Sets Retailers Up for Success

It’s clear that, as consumer demands for affordable shipping and quick delivery  continue to grow, for today’s leading retailers, adopting and building an omnichannel strategy is critical to remaining competitive. A successful omnichannel approach requires an optimal balance of e-commerce, brick-and-mortar retail, and fulfillment and distribution capabilities. Having the ability to pull multiple e-commerce order fulfillment levers – such as ship from store; buy online pickup in store (BOPIS); and buy online, return in-store – is a critical differentiator for retailers, as detailed in the key findings of Digital Commerce 360’s 2021 Top 1000 Report.

To successfully implement an omnichannel retail strategy, companies need a comprehensive multi-carrier shipping strategy to support fast delivery times and meet customer expectations. For retailers striving to scale their business, while optimizing customer service and increasing profit margins, an effective omnichannel strategy must include a cloud multi-carrier shipping system.

A cloud multi-carrier shipping system seamlessly integrates with a retailer’s WMS, OMS, e-commerce, and ERP solutions to automate high volume, multi-carrier, omnichannel shipping. Regardless of which delivery option a customer chooses, the system automatically selects the right carrier service for each order according to parcel origin, parcel destination, carrier contracts, and business rules; and creates or acquires the tracking, labels, and documents. Therefore, retailers can satisfy customers’ delivery requirements and drive down the cost of shipping while transforming logistics into a profit center within the business.

Logistyx was named the #1 fulfillment software provider to Digital Commerce 360’s Top 1000 retailers for two consecutive years. As e-commerce continues to surge, Logistyx ensures top retailers and others with large fulfillment operations have the right mix of shipping and omnichannel capabilities at their fingertips, while tapping into more than 550 global carrier integrations for an optimal transportation strategy to effectively achieve omnichannel fulfillment.

To learn how you can improve your omnichannel shipping strategy to take advantage of e-commerce growth, contact us today.

E-commerce Sales Continue to Soar Among Logistyx Clients

E-commerce sales experienced massive growth during and following the COVID-19 pandemic, accelerating a shift already underway in people’s shopping preferences. According to Digital Commerce 360’s estimates, consumers spent $861.12 billion online with U.S. merchants in 2020, increasing 44% year-over-year (YoY); the highest annual U.S. e-commerce growth in at least two decades and nearly triple the 15.1% jump in 2019. 2021 shows no signs of slowing, as highlighted by two Logistyx clients recently in the news for quarterly earnings.

Home Depot

For Q1 2021, Home Depot’s online sales grew 27% YoY, accounting for 14.3% of total sales. Interestingly, with sales booming and shipping capacity shrinking, Home Depot has secured its own ship to help optimize its supply chain.

Oxford (Owner of Tommy Bahama, Lilly Pulitzer, and Southern Tide)

Full price e-commerce sales grew 55% to $74 million compared to the first quarter of fiscal 2019, with growth in all branded businesses, helping the company achieve total net sales of $265.8 million in Q1 2020.

Kudos to both companies for taking steps to capitalize on unprecedented e-commerce growth! Logistyx is proud to work with innovative companies on their e-commerce fulfillment capabilities to ensure excellent service, customer satisfaction, and substantial cost-savings.

To learn how you can optimize your omnichannel shipping strategy to effectively take advantage of the ongoing e-commerce surge, see how Logistyx can help.

Logistyx President Ken Fleming Examines Marketplace Fulfillment Excellence at Forbes

Online marketplaces, both large and small, have become enormously popular in recent years, driving VC investment, acquisitions, and IPOs, as well as tech investment for payment solutions, site personalization and recommendation engines, and advertising. Perhaps the most critical component to sustained success is also the most-often-overlooked: order fulfillment as a chief driver of customer satisfaction.

In his latest article at Forbes, Logistyx President Ken Fleming examines current fulfillment approaches for various marketplaces, how technology can improve the process while also easing the burden on sellers:

“Technology can help counteract [rate] increases in several ways. It can aid sellers by helping identify the best and most cost-effective carrier service based on business rules; it can audit historical shipping data to uncover efficiencies, new carriers, or services; and it can monitor every shipment to ensure carriers perform services as contracted and flag discrepancies, offering invaluable data for billing accountability and rate negotiations.

Technology can ease the burden on sellers by automatically providing shipping options to buyers at checkout, including an array of carriers and service levels, automatically generating the correct label for the seller and providing end-to-end tracking information and alerts about problems while in transit to manage off-track shipments.”

Read Ken’s full article, “Online Retail Marketplaces Must Lessen The Fulfillment Burden On Sellers To Stay Competitive,” to find out the questions marketplaces must answer for a successful technology implementation and how it can set them apart from the competition.

While visiting Forbes, be sure to read Ken’s other articles.

Brands Use Omnichannel Fulfillment to Capitalize as E-Commerce Surge Continues

Online shopping soared to new levels in 2020, propelled in part by the COVID-19 pandemic, accelerating e-commerce growth expected to span years into a matter of months. As online shopping boomed and the pandemic wore on, consumers increasingly resorted to curbside and other delivery fulfillment options, like buy online pickup in store (BOPIS), as a way to avoid crowds in stores. The most prepared retailers had already established these fulfillment options prior to the pandemic; others had to make adjustments to accommodate their customers.

Adopting and implementing an omnichannel retail strategy empowers retailers to improve customer service and profitability. As discussed in a recent report from the Retail Industry Leaders Association (RILA) with McKinsey & Company, two-thirds of survey respondents cited the growth of omnichannel and digital shopping as the most significant trend affecting the industry – and the greatest challenge. The report goes on to say, “The growth of e-commerce and demands by consumers for seamless omnichannel experiences are here to stay: consumers expect to continue making more purchases online post-pandemic than before COVID-19. With e-commerce projected to reach 25-40% of sales across categories after the pandemic abates, retailers must understand the role of digital shifts on the customer journey, upgrade e-commerce capabilities, and rethink the network as the role of the store blurs.”

At Logistyx, we love seeing our clients doing great things and implementing creative solutions to help improve the way they fulfill e-commerce orders. Some of Logistyx’s favorite shippers have been praised in the news in recent months for the great strides they’ve made with their omnichannel retail strategies by adopting some of the new innovations available to fulfillment teams, and we’re thrilled to see many of these impressive initiatives taking off.

Here are some news stories we’re excited to see:

Crocs’ record-setting quarter was covered in Yahoo! Finance

The footwear company recorded its highest revenue and adjusted operating profit of any quarter in its history as sales in Q4 ran up 56.5%. The growth was led by the Americas and EMEA regions, with digital seeing the fastest growth among channels.

E-commerce surged 92% in the quarter, representing Crocs’ 15th consecutive quarter of double-digit e-commerce revenue growth. The overall digital business, which includes owned and third-party e-commerce, grew 87% and represented 41% of fourth-quarter sales, compared to 34% last year. For the year, e-commerce revenues climbed 58.2% and digital sales, including sales at crocs.com and third-party sites, grew 50%.

Foot Locker’s strong digital sales were reported by Nasdaq

Footwear and athletic apparel retailer Foot Locker has managed to navigate the turbulences in the retail space on the back of its sturdy e-commerce business as well as prudent operating strategies.

Foot Locker has been investing significantly to reinforce its digital presence, with a focus on augmenting its e-commerce platform and saw digital sales rise triple digits across the regions that were heavily affected by store closures. The retailer further bolstered omnichannel strength by adding new services like its ‘Shop My Store’ feature on its website.

Home Depot received a glowing report on CNBC

Home improvement giant Home Depot’s Q4 earnings surged past expectations as consumers poured more money into home improvement due to the pandemic.

Digital sales increased about 83% in Q4 compared with a year earlier. The retailer grew about 86% for the full year compared with the year prior, with about 60% of those online orders fulfilled through the store.

Home Depot plans to continue to invest in integrating its e-commerce and brick-and-mortar business.

To learn how you can optimize your omnichannel shipping strategy to effectively take advantage of the ongoing e-commerce surge, see how Logistyx’s cloud TMS for parcel shipping can help.

Failed Deliveries Pose a Threat to Retailers Amid E-Commerce Surge

Showing no signs of slowing down, e-commerce continues to surge around the globe. Online orders are reaching record-setting volumes with 69% of retailers reporting an increase in average online order values and shoppers growing more comfortable purchasing from global brands, evidenced by rising numbers of international orders reported by 54% of retailers, according to a recent study from Loqate. While these present promising opportunities for retailers, poor address data that leads to inaccurate fulfillment poses a major threat to success in the form of lost sales and damage to retailers’ brands.

As reported by Loqate:

  • 99% of e-commerce organizations own up to failed deliveries across some portion of their orders
  • 8% of domestic first-time deliveries fail, costing retailers an average of $17.20 per order or $197,730 per year
  • 74% of businesses point to bad address data as the cause of up to a quarter of their deliveries failing
  • One-third of study respondents either don’t verify address data or leave it up to the carrier
  • 41% of consumers place the blame for late deliveries on retailers

Companies can’t afford to have delivery problems on customer orders when consumers have more options for shopping than ever before and it’s easier for dissatisfied customers to take their business elsewhere. Address inaccuracies rarely get the attention they deserve, and if left unattended, retailers risk more than upset customers. If a carrier detects the delivery errors due to a faulty address, the additional charges – which start at $18 per shipment with UPS and FedEx – quickly add up.

The easiest way to prevent additional charges and lost customers is to leverage the address verification functionality in multi-carrier shipping software. With Logistyx’s automated address verification and standardization shipping software tool, retailers can pre-emptively verify addresses and fix any problems that could result in upcharges long before the carrier arrives to pick up deliveries.

Logistyx’s address verification tool makes it quick and easy for retailers’ shipping staff to resolve delivery address questions right on the shipping line with a single platform, including the ability to:

  • designate shipments as residential or commercial
  • validate addresses at the street level, city, and/or zip code level
  • detect multiple or near duplicate address matches
  • view and/or choose address details

By taking advantage of the benefits of address verification capabilities in multi-carrier shipping software, retailers can ensure all the data input into their shipping process is accurately maintained while uncovering tremendous opportunities to reduce shipping costs and effectively fulfill customer orders.

Contact us today to learn how Logistyx’s multi-carrier shipping software can eliminate incorrect delivery addresses to avoid absorbing extra shipping costs.

Belk Quickly Expanded Fulfillment Options

With Ship-From-Store in Place Pre-Pandemic, Belk & Logistyx Technologies Thrived as E-commerce Orders Surged

Business Challenge

To meet consumer demand driven by the growth in e-commerce, Belk committed in recent years to investing in supply chain technology enhancements to better serve customers, including finding new methods to optimize fulfillment and shift more e-commerce delivery origins from distribution centers to stores. While simple in theory, executing store-level shipping presents considerable challenges, including limited carrier selection and complex rate shopping.

Solution

Logistyx addresses these and other fulfillment challenges for Belk with Logistyx TME, a solution that provides stores with instant access to carriers and services offering the best rates for each particular location. Seamlessly integrated with Belk’s order management software, the solution supports multi-carrier rate shopping, shipment execution and label generation, real-time shipment tracking, and delivery transparency.

Leveraging TME, Belk utilizes its stores as mini distribution centers without having to employ major process changes to get shipments to customers’ homes, a key advantage as parcel count increased considerably due to the COVID-19 pandemic.

When faced with carrier capacity limits, Logistyx helped Belk grow its carrier network by tapping into its library of more than 550 carrier integrations. This added greater capacity into Belk’s parcel delivery mix by introducing more options through using regional and specialty last-mile carriers, while also reducing transportation costs to provide a consistent level of service to customers.

Results

By automating Belk’s processes and providing advanced parcel management solutions through TME, Logistyx empowered Belk to quickly and cost-effectively transform its fulfillment operations to provide ship-from-store capabilities.

Expanding its fulfillment options with ship-from-store functionality using Logistyx TME well before the COVID-19 pandemic hit was instrumental in providing the agility required to help Belk manage the shift in consumer shopping patterns, move its in-store inventory and provide greater omnichannel fulfillment capabilities.

Utilizing Logistyx also allowed Belk to:

  • Meet increasing parcel shipping demands while controlling costs
  • Streamline the pick, pack and ship process
  • Improve efficiency and organization around ship-from-store operations
  • Decrease shipping time nationwide from its 291 store locations

“Just Keep It” – Amazon, Other Top Merchants Going Further to Minimize Returns

The COVID-19 pandemic-fueled surge in e-commerce creates a growing challenge related to the age-old issue of returns. As The Wall Street Journal highlights, “That shopping shift is placing more importance on solving a problem that dates to the early days of online shopping. Free shipping and other accommodating return policies have gotten consumers used to ordering multiple sizes and colors and returning what they don’t want.”

The share of online purchases that are returned averages 30% or higher, depending on the category, three times the rate in physical stores, according to industry executives. At that level, managing e-commerce reverse logistics can be expensive. The biggest merchants, including Amazon and Walmart, have taken notice and begun adopting some of the strategies perfected by smaller, innovative merchants. Some are telling customers receiving refunds to keep the product to avoid some returns altogether; others are investing in elaborate interactive online fitting rooms to slow the growth of apparel returns.

As the number of e-commerce package returns continues to rise, it’s critical that businesses evaluate how teams are equipped to handle returns, ensuring they have strategies in place to streamline returns processes and mitigate associated costs. Taking steps now to optimize returns processes and tools with robust technology solutions enables businesses to improve shipping processes and handle spikes in returns with greater flexibility.

In fact, the right multi-carrier shipping system allows businesses to centralize returns shipping execution and decrease transportation spend by optimizing carrier service selection and using data analytics and Business Intelligence to enhance inbound distribution strategies. With growing consumer expectations around free and easy e-commerce returns, advanced multi-carrier shipping technology offers businesses the ability to choose the best-fit approach to returns for greater control on return shipment costs in any scenario.

Download our checklist: 4 Ways Smart Businesses are Revamping Returns Processes in 2021 to learn more about how a cloud multi-carrier shipping system can optimize shipping processes and help take the hassle out of returns.

Logistyx President Ken Fleming Highlights the Shortcomings of Hybrid Mail Services at Forbes

E-commerce exploded in 2020 as the COVID-19 pandemic fundamentally altered the way consumers shopped for everything from home essentials to holiday gifts. As merchants sought to keep pace with the increased demands and parcel shipping volume, many explored new ways to reduce shipping costs. Some found out the hard way that hybrid mail services relying on order consolidation is problematic.

In his latest article at Forbes, Logistyx President Ken Fleming dives into the shortcomings of this approach:

“Hybrid mail services from alternative carriers using order consolidation, on the other hand, promise cost reductions (according to Logistyx clients, as much as 50%) on traditional USPS services, but often lead to massive delays and lost customers. They cut costs by combining very-low-cost bulk freight services with USPS last-mile delivery, consolidating tens, hundreds or more USPS orders into one or more less-than-truckload (LTL) shipment(s). Later, they directly inject those parcels into the USPS-serviced last mile.

These services work fine for companies sending promotional and marketing materials to customers and prospects. In these cases, recipients have no stake in how long the parcels take to reach them. While e-commerce merchants love the idea of cutting USPS spend by 50%, those who widely roll out these services for e-commerce fulfillment usually abort or scale back these efforts quickly after becoming aware of very serious problems resulting from these slower and sometimes difficult-to-track deliveries.”

Read Ken’s full article, “Hybrid Mail Shipping Services Disappoint E-commerce Customers,” for the nitty-gritty on why these services fail to meet expectations and jeopardize customer relationships.

Ken’s other articles at Forbes are also worthwhile reads.

2020 Proved an Enormous Year for E-Commerce Growth with Lessons for 2021

All signs pointed to 2020 being an unprecedented year of growth for e-commerce and, according to Digital Commerce 360, those signs were very telling. By the outlet’s estimates, consumers spent $861.12 billion online with U.S. merchants in 2020, up an incredible 44% year-over-year (YoY); the highest annual U.S. e-commerce growth in at least two decades and nearly triple the 15.1% jump in 2019.

Online’s share of total retail sales has steadily risen – with e-commerce penetration hitting 21.3% in 2020, up from 15.8% in 2019, according to estimates from Digital Commerce 360. The more than five-percentage point gain in e-commerce penetration is by far the biggest YoY jump for U.S. retail sales ever recorded.

All the growth in retail came from e-commerce, with online sales accounting for 101% of all gains in retail in 2020. This means sales through all other channels – stores, catalogs, and call centers – declined, marking the first time in history that e-commerce sales accounted for all retail sales gains.

Free Download - eCommerce Checklist for Peak Season

This explosive e-commerce growth – driven in part by the COVID-19 pandemic – and an unrivaled peak retail shopping season created visible stresses on the supply chain in 2020, leading to an extraordinary carrier capacity crunch. The significant increase in parcel shipping during peak season put a strain on every part of the shipping chain, all the way down to the last-mile, leaving many businesses to contend with never-before-seen peak delivery surcharges and shipping delays.

While many merchants had to shift supply chain strategies to effectively meet customer demands in the face of these obstacles, the unique challenges of 2020 resulted in valuable lessons learned that retail shippers can leverage now to properly prepare for ongoing supply chain disruptions in 2021.

Logistyx President, Ken Fleming recently spoke with Digital Commerce 360 to discuss the challenges retailers endured during last year’s holiday season and how they can prepare for another unprecedented season in 2021. Read Ken’s full interview with Digital Commerce 360.

To learn how you can improve your omnichannel shipping strategy to take advantage of e-commerce growth and prepare for ongoing supply chain disruptions, contact us today.

 

3 Tips for Getting International Shipping Right

Statista projects e-commerce revenues will increase to $4.88 trillion in 2021, which means if you’re a small to medium-size business, the time may be right to expand your product footprint across borders. But for many companies new to international shipping, there are multiple factors to consider, and ensuring a seamless customer delivery experience while maintaining profitability can be challenging.

Here are three strategies for streamlining cross-border e-commerce fulfillment while actually increasing profits per parcel.

1. Know how your product is regulated internationally.

Here’s a fun fact: it’s illegal to import calendars for commercial purposes into Vietnam. That’s right, folks, we said “calendars.” This means online retailers based in the U.S. may not send quantities of more than 100 calendars to customers in Vietnam. Break the law and prepare to do time (pun intended!).

And this is just one example of hundreds of country-specific regulations complicating international shipping. Talk about overwhelming!  But to simplify the complexity, UPS has an online tool that enables shippers to access a list of regulations. Input the origin and destination countries, and UPS returns information about shipping requirements.

Also, understand the duties and taxes. For example, when a U.S. retailer ships a pair of sneakers from Los Angeles to a customer, store, or warehouse in Chicago, there is a single shipping rate. But if this retailer sends the same pair of shoes to a customer, store, or warehouse in Amsterdam, the shipment is subjected to a whole new set of duties and taxes. The total cost of shipping an order internationally is referred to as the “landed cost,” and it is critical to understand this cost on the front end of the shipping process. Specifically, you want to know:

  • Is the product taxable? At what quantity?  At what value?
  • What customs regulations apply?
  • What is the country’s minimum threshold value for duties?

Keep in mind, duties and tariffs continuously change, and therefore this will be an ongoing exercise.

2. Decrease shipping costs with a cloud Transportation Management System (TMS) for parcel shipping.

Shipping parcels individually across borders, especially if they have a low price point, isn’t cost-effective.  Smart shippers are instead using break bulk services, wherein multiple orders are consolidated into one big shipment to cross the border in order to reduce shipping charges and paperwork. Once on the other side, the consolidated shipment is broken down into separate shipments for individual delivery.

A cloud TMS for parcel shipping ensures your labeling and documentation can support this, and Logistyx has seen customers achieve savings of more than 25% on their transportation costs by switching to a break bulk service rather than sending shipments individually. For large shippers sending multiple items, the economics of break bulk are clear. Not only is there a cost saving on the actual shipping charge, due to lower cost/weight rates on higher weight shipments, but there is a corresponding reduction in the quantity and cost of paperwork. If 50 individual shipments are consolidated into one break bulk shipment, there is only one set of paperwork to clear customs, meaning less chance of delays at the border. With carriers charging for each invoice declared at the border, the savings opportunities are clear, and having only one carrier invoice to be checked, also means less work for the finance department.

3. Use a cloud TMS for parcel shipping to rate shop.

Rating and rate shopping isn’t straightforward across the border. In Europe, for example, carriers use myriad rate calculation methods. Unlike the United States, there isn’t a uniform postal code system across Europe, which means rate-zone definitions differ by country, carrier, and service. Some rate zones are even a combination of country postal codes, regions, cities, etc. Furthermore, there are no European-wide tariff structures. Rating is done on a per-carrier basis according to zones, weight, volume, and distance, but also accounting for factors such as pack quantity and load meters. These variables, in conjunction with different currencies, further complicate rating and rate shopping. A cloud TMS for parcel shipping enables you to rate shop across your entire transportation network to identify the optimal carrier service for each shipment based on all of these variables.

Manage Cross-Border Shipping with a Cloud TMS for Parcel Shipping

In summary, shippers moving parcels across borders should consider using a cloud TMS for parcel shipping to ensure they can simplify the complexity of regulations, label and documentation requirements, rating, and rate shopping.

To learn more about how Logistyx TME can provide the necessary flexibility to successfully execute cross-border parcel shipping, contact an expert today