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Omnichannel Fulfillment Part of Recipe for Pandemic-Era Success for Logistyx Clients

As shopping across various channels becomes increasingly popular, retailers continue to invest in omnichannel fulfillment strategies and technology. According to a recent Forrester report, nearly 31% of retail executives allocated a large cut of their 2020 budget toward omnichannel fulfillment and, of the retailers already utilizing omnichannel fulfillment programs, 22% said they plan on making improvements.

As shopping trends and rising customer expectations for speed and convenience continue to shift, retailers need to adapt accordingly to meet demand. Digital-first and omnichannel retailers have pivoted more easily by swiftly reimagining their omnichannel approach to fulfillment and it’s already paying dividends. Take, for instance, three Logistyx clients recently in the news for flourishing quarterly earnings.

Crocs

Crocs reported better-than-expected top and bottom lines in Q2 2021, thanks to solid demand for its products and continued business momentum. Revenues soared 93.3% year-over-year (YoY), with wholesale and retail revenues improving 112.1% and 78.6%, respectively.

The company also made significant progress in expanding digital and omnichannel capabilities. It witnessed a 25% YoY increase in digital sales in Q2, marking the 17th successive quarter of double-digit growth, while e-commerce sales also surged 99% from Q2 2019.

Home Depot

In Q2 of Home Depot’s fiscal year 2021 (FY21), which ended August 1, the big box home improvement retailer earned $41.1 billion in total sales, up 8.1% YoY. The company’s global comparable sales rose by 4.5% for the quarter, with its U.S. comparable sales edging up by 3.4%.

This success comes after Home Depot achieved 83% digital sales growth YoY in Q4 of its fiscal 2020, where roughly 55% of all online orders were fulfilled through a store.

Free Download - eCommerce Checklist for Peak Season

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

Leading apparel retailer, Oxford Industries posted a 71.2% sales growth (YoY) to $328.7 million in Q2 of FY21, which ended July 31, 2021, against sales of $192 million in Q2 FY20.

As Oxford’s Chairman and CEO commented, “All of our direct-to-consumer channels performed well, led by our highly profitable, full-price e-commerce business, with sales growth of 49% compared to the second quarter of fiscal 2019.”

Congratulations to these companies for continuing to infuse innovation into their omnichannel efforts to enhance the customer experience! Logistyx proudly works with cutting-edge companies to help them modernize their omnichannel workflows to successfully meet increasing demand, satisfy customers’ delivery requirements, and drive down the cost of shipping.

Contact us to learn how Logistyx’s cloud multi-carrier parcel shipping system can help elevate your omnichannel shipping strategy.

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.

Logistyx President Ken Fleming Shares 2021 Fulfillment Best Practices with Logistics Viewpoints

The impacts of the COVID-19 pandemic and an unprecedented peak retail shopping season are still creating visible stresses on the supply chain. In his latest Logistics Viewpoints article, “Inoculating 2021 E-Commerce with Fulfillment Best Practices,” Ken shares the many valuable lessons proven out in 2020 that fulfillment professionals can apply in the year ahead to ease these burdens and keep customers happy and operations on track.

From providing distinct tracking and tracing capabilities to auditing fulfillment data with Business Intelligence tools to better serve customers, various supply chain challenges in 2020 prompted many shippers to implement creative solutions that helped improve the way they fulfill e-commerce orders. The explosive e-commerce growth of 2020 also created an extraordinary carrier capacity crunch, leading many savvy shippers to adopt a multi-carrier approach to safeguard against rising carrier rates and reduced capacity. Innovations like localized or on-demand manufacturing via 3D printing, combined with multi-carrier parcel shipping, further reduced dependence on carriers in 2020 and serves as a worthwhile lesson that can pay dividends for other shippers in this new year.

To learn more about how shippers can utilize these and other best practices in 2021 and advance even further to adopt the new innovations available to fulfillment teams, read Ken’s latest article or contact us today for a an assessment of how you can implement these best practices. Check out Ken’s other Logistics Viewpoints contributions for more supply chain insights.

Incoming! How to Manage a Surge in Reverse Logistics Volumes

According to Digital Commerce 360 and Adobe Analytics, “Ecommerce sales crossed a record $5 billion on Thanksgivingsurged 21.6% on Black Friday, and increased 15.1% on Cyber Monday. And though we’re still waiting on the final numbers, should Adobe’s prediction for holiday sales prove accurate and online holiday season spending reach $189 billion, representing 33% growth year-over-year (YoY), 2020 will be permanently cemented into the holiday e-commerce sales record books.

But unfortunately for retailers, what goes out… might just come back. According to CBRE, e-commerce returns this season could total as much as $70.5 billion, a 73% increase from the previous five-year average, which means reverse logistics operations for many retailers will be tested like never before. In fact, the National Retail Federation predicts budgets for global reverse logistics technologies will also increase in 2021 — forecast last year to hit $604 billion by 2025 — as retailers look to streamline the consumer experience and minimize returns costs.

A Multi-Carrier Shipping System Enables Faster, Better Returns Management

Optimizing reverse logistics often comes down to having sophisticated logistics management practices in place, and a cloud-based multi-carrier shipping system will streamline returns shipping execution and reduce returns shipping costs. The most sophisticated solutions offer shippers the ability to determine the best returns policy and carrier services by automatically rate shopping across carriers in the retailer’s transportation network, selecting the most appropriate carrier services based on established business rules, printing necessary paperwork and labels, tracking inbound shipments, and auditing the entire shipping and returns process to identify cost-saving opportunities throughout the fulfillment lifecycle.

Tips to Reducing the Financial Impact of Returns

Dealing with e-commerce reverse logistics can be expensive. Statista projected return costs, including delivery and restocking, would reach $550 billion in 2020 alone, prompting retailers to aggressively work to reduce the cost and volume of returns long before peak season hit.

For some companies, the strategy is to avoid returns altogether. Many luxury brands have opted to go this route, choosing to skip the shipping, handling, and re-stocking expenses and improve customer service in one motion. E-tailers (sellers with no brick-and-mortar stores) are now increasingly following suit, sometimes telling customers to keep incorrect products and avoid the cost of returns, and in a new development, big box retailers such as Walmart and Target are also telling their customers to keep what they don’t want.

Other retailers, however, choose a different path and instead opt to handle returns and re-stock and re-sell their inventory. For these retailers, here are a few tips for streamlining returns processes and mitigating returns costs:

1. Move away from a single carrier strategy

If we have learned anything as a result of the COVID-19 pandemic, it’s that businesses need multiple carriers contracted and ready to go, and a multi-carrier shipping system to rate and rate shop carrier services across the transportation network. A multi-carrier shipping system will enable you to select the optimal carrier service for each return shipment according to your carrier contracts and business rules, balancing capacity, optimizing spend, and preventing inbound shipping delays so you can re-stock and re-sell inventory quickly.

2. Leverage data analytics and Business Intelligence

The right multi-carrier shipping system will also include Business Intelligence. These cost analysis tools will enable you to run contract analysis analytics that highlight carrier performance and cost metrics and compare carrier performance against contract terms. With these analytics in hand, you’ll be better informed during carrier renegotiations and empowered to select the best vendor long term. And if your volume is great enough, you might have the leverage to negotiate “any point to any point” rates for your returns with the big carriers (FedEx, USPS, UPS, DHL).

In addition, Business Intelligence will allow you to answer the question: Are you shipping to the optimal returns center? Sophisticated analytics will allow you to quantify the value of making adjustments to your returns strategy. For example, looking closely at the zip codes served by various returns centers, can you make adjustments for cost? Volume? Better carrier services? Is your network geographically optimal? Maybe you should move returns centers, or analyze outsourcing options for returns processing.

3. Prioritize the customer experience

The right multi-carrier shipping system will be flexible enough to allow you to choose the returns workflow and customer experience that works best for your business. The technology provides you with the ability to control for return shipment costs in any scenario, whether the customer is initiating the return online or working with an in-house customer service rep. Added bonus: the technology also guarantees your customer is using the right shipping label, regardless of whether the customer is dropping the return off at a UPS store or FedEx office or mailing it through the USPS.

In addition, a multi-carrier shipping system with Business Intelligence will allow you to assess your customer behaviors so that you can decide the best-fit approach to returns. For example, based on returns patterns, you may want to establish a relationship with FedEx (FedEx Office) or UPS (UPS Store) so customers can package and drop off returns easily.

4. Reduce the number of avoidable returns

Zero returns cost will always be cheaper than any returns cost. Analytics and Business Intelligence can play a pivotal role in uncovering a variety of cost-saving opportunities beyond criteria for returns carrier service selection. Analytics can identify weak links in fulfillment by tracing wrong product shipments to certain distribution centers, pickers, or procedural problems so staff can correct inventory and warehouse management processes or take other steps to resolve the issues.

When fulfillment errors do not explain patterns of recurring returns, analytics can point to potential merchandising problems and answer questions that include:

  • Which products are most returned and what can be done about it?
  • Are most of the returns originating from the same product or product category?
  • Should a retailer consider discontinuing product lines or only selling certain products in-store?

Identifying routinely-returned or problematic products gives the retailer a chance to take proactive steps to address the issues – whether it’s something as simple as an incorrect size listing in a product description or something more serious, such as a defect in the manufacturing, prompting regular returns.

5. Combat fraudulent returns

Analytics can also play a critical role in identifying the prevalence of fraudulent returns and determining their impact. Combatting fraud helps many organizations reduce the cost and volume of returns, as annual losses from fraudulent returns are estimated at $27 billion, according to Appriss Retail, who also estimates return fraud at 8.8% in 2019, a 76% increase year-over-year.

Luxury brands in particular need processes in place to ensure they never accept counterfeit products as legitimate returns; even infrequent instances of fraudulent luxury product returns can wreak havoc on organizations. Every effort should be made to determine how often this happens and deter future instances.

Select the Right Multi-Carrier Shipping System to Better Manage Reverse Logistics

Reverse logistics will always have a peak season after the holidays, and an inability to maximize efficiency in reverse processes will routinely lead to higher costs. Fortunately, using an advanced multi-carrier shipping system can make a world of difference, and many companies turn to Logistyx technology and expertise to customize and automate their returns processes.

Download our white paper: Managing the Rise (and Cost) of Returns to learn more about how a cloud multi-carrier shipping system can help you save money on your returns.

3 Tips for Getting E-Commerce Delivery Right

This year has upended e-commerce in ways that are almost unthinkable. Since March, e-commerce volumes have grown exponentially, reaching peak-like levels, and with this unexpected growth came delivery delays.  Looking ahead to the “real” peak season, volumes are predicted to hit unprecedented levels and carriers are already anticipating capacity crunches, meaning delays could continue.

Here are three tips to get e-commerce delivery right and keep customers satisfied in the days ahead:

1. Accurately Set Delivery Expectations

The good news is that most e-commerce shoppers understand the pandemic has slowed delivery times. The one- or two-day delivery turnarounds shoppers previously enjoyed simply aren’t possible in a shipping landscape where volumes are high, and capacity is tight.  But where many retailers have gone wrong, is in their communication to customers about delivery events and delays.  One recent report found that 42 percent of online shoppers want to receive real-time updates on their packages.  To underscore the importance of this statistic: this is roughly the same percentage of shoppers who want free shipping.

ebook logistyx future-proofing-supply-chainTherefore, as we head into peak season, retailers should make sure they have a clear communication strategy to accurately set delivery expectations – and the right technology to execute.  Retailers who have implemented a cloud TMS for parcel shipping benefit from Control Tower functionality, which means they can provide shoppers with the transparency they value. The system will send early warning signs when there are parcel delivery issues or “exception events,” empowering customer service teams to proactively trouble-shoot the exception event and communicate delivery updates to the customer in real time. For example, perhaps the product can be sent from a different distribution center to arrive on time. Or perhaps the customer is willing to retrieve the product from a nearby store or locker.

With a cloud TMS for parcel shipping, customers can even track and trace shipments on a retailer’s website without the need to visit carrier sites, reducing inbound calls about shipment status to customer service and increasing customers’ browsing behavior on the retailer’s website – which (fingers crossed!) could lead to additional purchases. Consider too that tracking delivery exception events enables retailers to capture accurate carrier performance data – improving carrier service measurement and better informing carrier selection from the onset.

2. Have an Omnichannel Distribution Strategy

If we’ve learned anything during the pandemic, it’s that retailers that take advantage of their physical presence are the ones to gain a competitive edge.  Having the ability to pull multiple e-commerce order fulfillment levers such as deliver from store, buy online pickup in store (BOPIS), and delivery drop-offs in lockers is a critical differentiator over retailers that execute e-commerce fulfillment from warehouses and distribution centers only.

A recent study reported deliver from store is the most popular e-commerce order fulfillment method because it’s the optimal way for retailers to meet consumer demand and stay on par with Amazon’s one-day delivery.  Studies also report that by delivering orders from store, retailers enjoy six times more order volume and a 169% increase in conversion rates, offsetting order fulfillment costs and increasing consumer satisfaction. Furthermore, 61% of shoppers prefer a one- to three-hour delivery window, which is usually only achievable by delivering from the store closest to the customer.

But customers’ demands don’t stop there.  Eighty-six percent have requested products be sent to a store or locker and approximately 50% factor in the availability of BOPIS when making a purchasing decision. This is actually good news for retailers, as BOPIS is a win-win. With BOPIS, retailers reduce the cost of delivery and increase in-store sales, and consumers get their products faster and avoid a shipping charge.

Therefore, smart retailers are ensuring their e-commerce platform includes information about product availability and allows customers to choose from a variety of delivery options.  And just as before, retailers need a cloud TMS for parcel shipping on the back end, which seamlessly integrates with a retailer’s system of record to automate high volume, multi-carrier, omnichannel shipping.  Regardless of which delivery option the 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.  Retailers can thus satisfy customers’ delivery requirements and drive down the cost of shipping–transforming logistics into a profit center within the business.

A cloud TMS for parcel also ensures retailers have the right mix of carrier services in their transportation strategy to achieve omnichannel fulfillment.  The software will include a Business Intelligence platform to help retailers understand how factors such as distance, speed to delivery, package size, and density affect spend within their transportation carrier landscape.  For instance, if a retailer is implementing changes in fulfillment to increase ship-from-store or locate a new DC, understanding how these changes impact zone and carrier service-level downgrade options is critical.

3. Prioritize the Last Mile

Although retailers understand the importance of e-commerce, they often fail to prioritize the last mile, treating it as the carrier’s problem, not theirs. But this is a mistake. Last mile delivery is expensive – the most expensive portion of the end-to-end delivery equation. According to BI Intelligence, the total cost of shipping for the last mile is 53% of the total delivery cost.  And with the ubiquity of “free shipping,” customers are unwilling to pay a delivery fee, forcing retailers to absorb the cost.

To overcome challenges in the last mile, retailers should utilize an omnichannel inventory approach, maximizing their number of inventory sources, including distribution centers, warehouses, and stores, so they are closer to the customer.  And a key component to this approach will again be – you guessed it – a cloud TMS for parcel shipping.

A cloud TMS for parcel shipping will allow retailers to access and rate shop within an extensive network of carriers, including last mile carriers such as OnTrac, LaserShip, and Speedy Delivery, which usually offer next-day ground delivery within 400 miles of a shipment’s origin and without the surcharges national carriers assess.  Gaining in popularity among retailers of all sizes, last mile carriers can be the key to avoiding the national carriers’ holiday surcharges this year and to achieving faster, cheaper delivery in the last mile.

Start Today to Get E-Commerce Delivery Right

This year’s peak season will be different, and to get e-commerce delivery right you’ll need the help of a best-of-breed system such as Logistyx TME. To learn more, contact an expert today.

How to Get Last Mile Delivery Right

Even before the COVID-19 pandemic shut down non-essential retail worldwide, e-commerce was the biggest driver of growth in parcel shipping volumes.  But customer expectations for quicker and cheaper deliveries have made it difficult to manage these volumes and getting last mile delivery right is one of the biggest challenges facing both online retailers as well as the carriers within their transportation networks.

Unfortunately, the stakes are high.  Consumers make purchasing decisions based on the delivery experience.  In fact, almost 50 percent of all online shoppers will forego a purchase if they’re dissatisfied with their delivery options, and a new study from Voxware reports that 69% of consumers “are much less or less likely to shop with a retailer in the future if an item they purchased is not delivered within two days of the date promised.”

But what makes success in the last mile so elusive?  The answer lies at the intersection of cost and efficiency.  According to the Supply Chain Last Mile Report 2020, supply chain executives identified transportation spend and on-time delivery as their two biggest challenges in the last mile landscape.

The Challenges of Last Mile Delivery

Last mile delivery is expensive – the most expensive portion of the end-to-end delivery equation. According to BI Intelligence, the total cost of shipping for the last mile is 53 percent of the total delivery cost.  And with the ubiquity of “free shipping,” customers are unwilling to pay a delivery fee, forcing retailers to absorb the cost.

Why the high price tag?  For starters, consider that in the last mile there are multiple delivery stops, each with a low number of parcels, and there’s significant manual labor involved compared to other transportation segments.  In last mile delivery in a suburban or rural environment, for example, drivers go door-to-door to drop off parcels, and there might be several miles between those doors.  In cities, the delivery landscape isn’t any better.  What urban areas make up for in delivery stop proximity is quickly neutralized by traffic congestion and continuous delays.  And if there are several delivery attempts because the recipient wasn’t home to sign, the delivery costs increase that much more.

ebook logistyx future-proofing-supply-chainIn addition, the definition of “parcel” has changed.  As e-commerce continues to boom, the products purchased online are expanding. Suddenly, shoppers are buying furniture and home appliances online, and there has been a substantial increase in “white glove” last mile delivery services, where the purchase is delivered, and then assembled and installed in the customer’s home.  For manufacturers and retailers, the good news here is there’s a growing e-commerce market for their products. The challenging part for these shippers, however, is that while brick and mortar retailers have provided this service for a long time, the service usually came with a fee, set delivery days, and large time windows for delivery.  But in today’s market, customers now expect these services to come with the same flexibility as their small parcel deliveries.

The Future of Last Mile Delivery

What will last mile delivery look like in the future?  It’s likely Pick-up/Drop-off (PUDO) and Buy Online Pick-Up In-Store (BOPIS) options will be a popular solution.  Spurred by the COVID-19 outbreak, BOPIS increased 208% April 1-20 compared to the same period a year ago and shows no signs of stopping.  In fact, as restaurants and brick-and-mortar retailers experiment with different ways to connect with customers and keep team members employed, many are adding BOPIS to their distribution mix – and for good reason.  BOPIS is a win-win for retailers and customers, as shoppers can get products quickly and in person, and retailers keep customers coming to their storefronts, maintaining repeat interaction with their brands.

Looking even further ahead, ground vehicles with lockers, basically roving Pick-Up/Drop-Off (PUDO) facilities, are a possibility. Bots are another.  To no one’s surprise, Amazon is assuming a leadership position on this front, investing heavily in its Scout autonomous bot.  Drones and other autonomous vehicles are also a consideration, though upgrading to a fleet of autonomous-delivery vehicles would be expensive, not to mention putting the necessary regulations in place and winning consumer confidence in these technologies.

The One-Two Punch of Omnichannel Distribution and Cloud Multi-Carrier Shipping Software

To overcome challenges in the last mile, retailers should utilize an omnichannel inventory approach, maximizing their number of inventory sources, including distribution centers, warehouses, and stores, so they are closer to the customer.  A key component to this approach will be cloud multi-carrier shipping software, which seamlessly integrates with a retailer’s system of record to automate high volume, multi-carrier, omnichannel shipping.  The software will automatically select the right carrier service for each order according to the point of origin, point of destination, carrier contracts, and business rules; create or acquire the tracking, labels, and documents;  monitor delivery events and automate event exception workflows; manage the manifest and end-of-day processes; and analyze carrier performance.  With the one-two punch of omnichannel distribution and cloud multi-carrier shipping software, retailers can satisfy customers’ delivery requirements and drive down the cost of shipping – transforming logistics into a profit center within the business.

Furthermore, cloud multi-carrier shipping software also ensures retailers have the right mix of last-mile carrier services in their transportation strategy from the onset.  The software aggregates and normalizes shipping data across carriers, so retailers know when deliveries moving to a particular region, customer, or via a particular carrier are not meeting service levels. Retailers can hold carriers accountable for failing to meet expectations and wield hard data to support rate negotiations.

Finally, the right multi-carrier shipping solution will also have a Control Tower that allows the retailer to provide customers with visibility into their parcel’s delivery journey, including in the last mile.  The system will send early warning signs when there are parcel delivery issues or “exception events,” empowering customer service teams to proactively trouble-shoot the exception event and communicate delivery updates to the customer in real time. For example, perhaps the product can be sent from a different distribution center to arrive on time. Or perhaps the customer is willing to retrieve the product from a nearby store or locker.

A Control Tower even makes it possible for retailers to provide customers with the ability to track and trace shipments on their own (not the carrier’s) website – reducing inbound calls about shipment status to customer service and increasing the customers’ browsing behavior while on the website, which (fingers crossed!) could lead to additional purchases.

Take the Lead in the Last Mile

Delivery can make or break the way customers experience a brand, and the last mile is the mile customers will remember.  As a result, it’s become the first place retailers are looking to implement new technologies that drive process improvements and give them a lead over competitors.

Retailers using cloud multi-carrier shipping software are able to execute an omnichannel distribution strategy and leverage the services different carriers offer in the last mile – optimizing costs from the point of origin to the point of destination.  They also have the tools to ensure their carrier transportation network can meet their delivery promise to the customer.

To learn more about how multi-carrier shipping software can help you improve delivery in the last mile, contact a Logistyx expert today.

E-Commerce Shipping Solutions: 5 Benefits to Expect

In e-commerce, the customer experience doesn’t end after someone clicks ‘place order’ on your site. Customers demand visibility, control, and communication during the entire shopping experience, beyond the website UX and the shopping cart; they also want visibility into parcel tracking, from the distribution center to their front door. And to make matters more difficult, customers want delivery to occur as fast as possible for free, turning to other retailers if these boxes aren’t checked.

Thus, e-commerce providers have to compete with expedited shipping — the likes of the two-day Amazon promise — to meet customer demands. And, somehow, they must do so for free while maintaining competitive pricing on their products.

The solution? Advanced e-commerce shipping software. Once retailers find the ideal fit for their operations, parcel shipping tools can assist with meeting customer expectations, boosting revenue growth, and staying competitive in the rapidly evolving e-commerce market.

Here are five benefits of implementing the right e-commerce shipping solution:

1. Finding the Right Carrier Service at the Lowest Cost

When it comes to carrier services, there are thousands of options. Especially with high-volume international distribution, shippers need to access an extensive carrier services network to meet their customers’ delivery expectations. But what if retailers could get the best of every carrier service?

E-commerce shipping solutions place all carrier options at the retailers’ fingertips. Advanced platforms allow users to instantly compare carriers and services to locate the best service for each shipment according to the retailer’s business rules. And by integrating these solutions into their supply chain ecosystem, retailers can meet their delivery objectives at the lowest cost for every shipment.

2. Streamline Shipping Processes

While the end goal of any shipper is to deliver products to customers on time, without damage, at minimal cost, and in the most efficient manner possible, the recent spike in e-commerce has also increased customers’ ability to customize their shipping options, and businesses must be able to accommodate this delivery personalization.

E-commerce shipping solutions enable the retailer to meet the customer’s shipping requirements from within the retailer’s system.  They automatically determine the carrier that can provide the best rates to a particular region and according to the retailer’s business rules, ensuring every shipment is in compliance with each carrier’s labeling and communication standards, as well as with any applicable trade regulations.

Free Download - eCommerce Checklist for Peak Season

In addition, e-commerce shipping solutions enable retailers to easily use “zone skipping” (also known as “hub induction” or “direct injection”) to improve customer service and decrease transportation costs. Zone skipping occurs when multiple customers’ orders are consolidated for the first leg of the delivery journey and then inserted into a parcel carrier network for the last-mile delivery. This is especially beneficial for cross-border shipping because it significantly simplifies end-to-end logistics and decreases customs clearance costs.  The approach also provides greater flexibility since retailers can select local carriers in different countries and regions that have optimal delivery networks for serving their customers.

Importantly, e-commerce shipping solutions also ensure retailers have the right mix of carrier services in their transportation strategy from the onset.  The software aggregates and normalizes shipping data across carriers, so retailers know when deliveries moving to a particular region, customer, or via a particular carrier are not meeting service levels. Retailers can hold carriers accountable for failing to meet expectations and wield hard data to back up rate negotiations.  They can also consolidate carriers to ensure they get the best possible price.

3. Tracking Shipments & Resolving Problems in Real-Time

The right e-commerce shipping solution will offer end-to-end parcel tracking, which provides two key benefits for retailers:

  • By tracking parcels from the warehouse or distribution center to the customer’s doorstep, retailers can resolve processing or transportation issues in real time.
  • By providing timely delivery updates to customers and options to personalize the delivery method, it improves the customer experience.

By collecting all tracking information and generating delivery event alerts that feed into the CRM system, customer service teams can proactively trouble-shoot delivery exception events and communicate delivery updates to the customer in real time. For example, perhaps the product can be sent from a different distribution center to arrive on time. Or perhaps the customer is willing to retrieve the product from a nearby store or locker. Customers can even track and trace shipments on company websites without the need to visit carrier sites, reducing inbound calls about shipment status to customer service and increasing the customers’ browsing behavior on the retailer’s website – which (fingers crossed!) could lead to additional purchases. Consider too that tracking delivery exception events enables retailers to capture accurate carrier performance data – improving carrier service measurement and better informing carrier contract negotiations.​

4. Getting Accurate Invoices & Negotiating Carrier Contracts

Carriers aren’t always perfect, and neither are the numbers on their invoices. While e-commerce providers of all sizes have grown to expect the inaccurate application of carrier surcharges and other fees, they’re nearly impossible to catch through manual invoice auditing. However, retailers can uncover these savings opportunities once they add an e-commerce shipping solution with freight audit and analytics tools to their shipping operations.  Freight audit and analytics tools will streamline the financial management of shipping costs by automating carrier invoice matching to identify invoice discrepancies. Plus, if the system has a deep ERP integration, it will allow for sophisticated account allocation and cost accruals.​

5. Making Data-Driven Decisions

Retailers without the ability to analyze real time shipping data in a Business Intelligence platform fail to understand how factors such as distance, speed to delivery, package size, and density affect spend within their transportation carrier landscape.  They can’t visualize how and where changes are planning to (or should) occur, and this means they’re on their back foot when it comes to carrier negotiations. For instance, if a retailer is implementing changes in fulfillment to increase ship-from-store or locate a new DC, understanding how these changes impact zone and carrier service-level downgrade options are critical.

In addition, retailers without real-time data and the Business Intelligence to put this data to work can’t answer questions, such as:

  • What is the impact of a proposed carrier rate change on spend?
  • What are the available transportation savings with newly proposed carrier options?
  • How will ship-from-store or new DC placement affect spend?

By harnessing this data and using the Business Intelligence tools found in an e-commerce shipping solution, retailers can extrapolate transportation spend impacts across significant data sets and visualize the effects across variables such as weight breaks, zones, regions, service levels, etc.  This visualization will allow retailers to easily identify areas ripe for further negotiation and empower them to make cost-savvy supply chain decisions that align with business strategy.

Finally, leveraging data to perform predictive analytics in logistics can help retailers reduce costs by making real-time procurement a real-life possibility. Identifying the ideal combination of carriers requires simulation analysis. If all carriers delivered to all regions with all services 100% on time, this would be a simpler exercise. But carriers don’t always perform at 100%, and by understanding where carriers perform well (and not) and leveraging this information within procurement simulations, retailers can rapidly evaluate predicted delivery performance and cost impacts, identifying the optimal carrier service combination based on factors such as service, price, capacity, and quality.

The benefits of e-commerce shipping solutions are clear: by rate shopping across a multi-carrier network, streamlining shipping processes, tracking parcel delivery movements, automating carrier invoice matching and reconciliation, and leveraging advanced analytics and reporting tools, retailers can meet customer delivery expectations at a palatable cost.

To learn how Logistyx can help your company satisfy customers and save on transportation spend, contact us today.​

 

Survey Says All Signs Point to Sustained E-Commerce Growth

What will e-commerce growth look like after COVID-19? A recent Digital Commerce 360 article looks beyond the rise of e-commerce due to the pandemic and anticipates shopping trends in a post-COVID-19 world. The findings hail from an Accenture survey of 7,872 consumers in 18 global markets conducted May 5-11, 2020.

Consumers Continue to Embrace E-Commerce

While some consumers turned to e-commerce for the first time because of the pandemic, many plan to continue omnichannel shopping after COVID-19 subsides. Of those surveyed, 51% plan to keep ordering through mobile apps, 42% plan to continue leveraging curbside pickup, and 41% will interact with chatbots after the pandemic.

Many consumers have expressed their hesitance to return to in-person shopping. Only 29% surveyed feel comfortable shopping at non-essential retail locations and shopping centers, and while 40% feel comfortable making trips to the pharmacy or grocery store, the remaining percentage represents the majority of consumers who will appreciate as many online and modified in-person options as possible.

As more consumers embrace online shopping due to the COVID-19 outbreak, developing an omnichannel strategy to include e-commerce and utilizing advanced cloud-based multi-carrier shipping systems positions shippers for success in this changing environment by providing them with greater flexibility to achieve long-term cost savings and improve customer service and fulfillment. Having the technology to execute various shipping scenarios according to consumer preferences, including Buy Online Pick-up In Store (BOPIS), drop ship, and on-demand delivery, will open revenue streams while ensuring service consistency and customer satisfaction.

To learn how you can elevate your omnichannel shipping strategy to effectively take advantage of this unique moment of e-commerce growth, see how Logistyx’s cloud TMS for parcel shipping can help.

Why Buy? The Demise of Home-Grown Parcel Shipping Technology: Part 3

As e-commerce continues to boom, asking more of your parcel shipping software to streamline deliveries, analyze data, and help inform future decisions is non-negotiable. The complexities of building and maintaining fully integrated and comprehensive parcel shipping technology make home-grown solutions less practical than ever.

In the inaugural post of this series, Why Buy? The Demise of Home-Grown Parcel Shipping Technology, we examined some of the modern complexities of parcel shipping and the intricate technologies enabling this supply chain function. In today’s post, the third in the series, we look at how parcel shipping technology can positively impact customer service and the complexities involved with making it all work seamlessly.

In the age of online shopping, customers expect only the best and fastest service at the lowest possible cost. In response, shippers are doing all they can to empower their customer service teams to deliver a top-notch customer experience from the moment a customer places an order to the moment it is delivered.

Sharing a tracking number and being ready to answer questions and provide updates is no longer enough. E-commerce businesses and online retailers increasingly seek to communicate more proactively with their customers, and advanced multi-carrier shipping software helps them do this in several ways.

Seeing is Believing: Visibility and Self-Service

Advanced multi-carrier shipping software will go beyond rate shopping and labeling and include a Control Tower that allows customers to track shipments in real-time, any time they want, and without needing to visit carrier websites–but a lot has to happen behind the scenes to make this happen. Achieving full visibility from order placed to delivery completed involves integrating multi-carrier shipping software with systems for e-commerce, warehouse management, carrier tracking, and more.

New call-to-actionWith these integrations successfully in place, multi-carrier shipping software not only empowers customers with real-time, on-demand delivery event updates (parcel has left the warehouse, parcel has arrived at the distribution center, parcel is out for delivery, etc.); the technology also empowers customer service representatives to solve problems and answer questions with ease. In fact, accessible, timely delivery event tracking often helps answer questions before customers even ask, proactively alerting customers to unexpected delivery delays, for example. This added benefit can lower call volumes and wait times and enable customer service representatives to better help those customers who still want to speak with a representative.

The Pitfalls of a Home-Grown Solution

Integrating multi-carrier shipping software with carrier, partner, and enterprise systems is complex, and to make the software useful to customer service teams, these integrations have to be maintained.  Let’s use carrier tracking systems as an example.

After building native integrations between your home-grown multi-carrier shipping software and UPS, FedEx, DHL, and others, your developers’ work on those integrations isn’t over. The carriers will frequently update their software applications to a new version, which will likely break the integration your developers built in-house. As a result, your dev team will need to sink even more hours back into those particular integrations. (And you’d have to multiply this process by however many internally-built integrations you currently maintain.)

And while maintaining integrations helps with day-to-day operations, it doesn’t directly contribute to your company’s product(s), revenue, or strategy. Analyst firm Gartner reports that 90% of organizations “lack a postmodern application integration strategy and execution ability resulting in integration disorder, complexity, and cost.” In other words, in-house integrations and maintenance, being so low on the strategic totem pole, are often poorly-planned affairs.

Now translate this back to customer service.  The minute your carrier integration(s) is broken, so too is your customer’s ability to track his or her package on your website, not to mention your customer service team’s ability to identify the unwanted delivery event in advance and take remedial action…  So the unwanted delivery event catches all parties by surprise, and even worse: when your customer calls into customer service for support, your customer service rep lacks immediate access to the delivery data, forcing him or her to contact the carrier for information.  Suddenly, there’s inefficiency and a lack of transparency in the one arena where you can’t afford a sub-par performance: customer experience.

Learn More

Logistyx’s multi-carrier shipping software includes a Control Tower and features integrations with more than 550 carrier services as well as most leading supply chain and enterprise technologies, alleviating your dev team of the burden of integration maintenance and setting your customer service teams up for success around the clock.  Explore our solution today.


Next: Part 4: Labeling and Carrier Service Auditing
Previous: Part 2: Business Rules and Business Intelligence

Third-Party Logistics Leaders Finding Success in Evolving Shipping Environment

As with many other areas of logistics, the continued growth of e-commerce plays a key role in driving a persistent increase in the global third-party logistics (3PL) market, which is estimated to reach $1.3 trillion by 2024. Evolving e-commerce demands and changing consumer behaviors have led to increases in shipping volumes, carrier services, and parcel destinations, all of which increasingly complicate traditional 3PL operations.

To successfully navigate the challenges of today’s changing shipping environment, many prominent 3PLs have adopted technology to help reduce operational costs and improve efficiencies. Investing in technology empowers 3PLs to take a more advanced approach to end-to-end shipping execution.

ebook logistyx quadrant Choosing a TMS for Parcel ShippingThat’s the case with many of the 3PL vendors in the 2020 Magic Quadrant for Third-Party Logistics Worldwide. Published by leading research and advisory firm, Gartner, this Magic Quadrant is a highly-regarded research report evaluating the capabilities and services of several global 3PL service providers, which supply chain leaders can leverage to inform and support the selection and appointment of global 3PL partners.

Logistyx would like to congratulate the innovative 3PL Leaders included in this year’s Magic Quadrant, many of which we’re proud to partner with, including DB Schenker, DHL, Kuehne + Nagel, UPS Supply Chain Solutions, and XPO Logistics. These providers show an exemplary proficiency for understanding the market, trends and customer needs, and translating those into well-executed service offerings further specialized for any number of industries.

Working with Logistyx and utilizing our cloud Transportation Management System (TMS) for parcel shipping enables a 3PL provider to successfully solve many shipping challenges, including the ability to:

  • Manage their own carrier contracts as well as their customers’ carrier contracts in one system
  • Increase carrier service choices, including multi-carrier services from FedEx, UPS, and the USPS, in addition to regional parcel carriers and same-day courier services such as Deliv and Shipt
  • Use “zone skipping” to improve customer service and decrease transportation costs
  • Aggregate and normalize shipping data across carriers, so 3PLs know when deliveries moving to a particular region, customer, or via a particular carrier are not meeting service levels

If you’re a 3PL looking to compete with the leaders in your industry and increase your parcel shipping execution capabilities, contact us today.

7 Strategies to Reduce the Cost of Return Shipping

Peak shipping season will be here before we know it.  (Although there’s an argument to be made the current pandemic IS peak shipping season…) And as retailers move towards the end of 2020, returns will predictably increase.  But just because retailers can predict this surge doesn’t mean managing it is easy. Returns management, when left without a strategy, can negatively impact profits.  Consider, shoppers return 15 to 40% of what they buy online, whereas only five to 10% of in-store purchases come back. To further put those statistics in context: in the U.S., Statista reports the cost of returns has increased by approximately 75% in the last four years, and this number doesn’t account for restocking expenses and inventory losses.

Here are seven strategies to simplify returns and control costs:

1. Encourage In-Store Returns and Drop-Offs

If you are an omnichannel retailer and your store has re-opened, you can encourage shoppers to drop returns back to your store. By using existing infrastructure as fulfillment and returns centers for online consumers, retailers can reduce shipping costs and increase customer footfall. Buy Online Return In Store (BORIS) not only costs less for retailers, but pre-pandemic, many customers preferred it. Case in point: a 2018 UPS study reported 58% of shoppers in the US prefer returning an item to a store. The same is true for 45% of Europeans and 64% of Canadians.

2. Plan Ahead with Return Labels

Consumers want convenience when it comes to returns, and multi-carrier shipping software enables retailers to meet this need. Multi-carrier shipping software will automatically print the appropriate return shipping labels when the order is fulfilled.  Retailers then place those return labels into the cartons, enabling a simple, fast, and seamless return process regardless of whether the consumer returns the product to the store or ships the product back to the retailer. And while convenient for the consumer, equally beneficial is the retailer’s ability to pre-select the carrier service that makes the most financial sense for return shipping, thereby controlling transportation costs and minimizing return shipping errors.

3. Deliver Parcels On-Time

ebook logistyx quadrant Choosing a TMS for Parcel ShippingThirty-eight percent of seasonal and holiday purchases are returned, and one factor contributing to this statistic is late delivery. Who needs holiday presents after the holiday? Multi-carrier shipping software with a Control Tower helps retailers ensure goods reach customers as promised, even during peak season.  The Control Tower will send early warning signs when there are parcel delivery issues or “exception events,” empowering customer service teams to proactively trouble-shoot the exception event and communicate delivery updates to the customer in real time. For example, perhaps the product can be sent from a different distribution center to arrive on time. Or perhaps the customer is willing to retrieve the product from a nearby store or locker. Customers can even track and trace shipments on company websites without the need to visit carrier sites, reducing inbound calls about shipment status to customer service and increasing the customers’ browsing behavior on the retailer’s website – which (fingers crossed!) could lead to additional purchases. Consider too that tracking delivery exception events enables retailers to capture accurate carrier performance data – improving carrier service measurement and better informing carrier contract negotiations.

4. Track Returns

Returns present retailers with an inventory problem, because any products that are in the hands of the consumer, pending return, or in the process of being returned, is inventory that is unavailable to refurbish or redistribute.   However, as long as retailers are tracking parcels on the outbound shipping leg, they can use the same system to give them visibility over return shipments – and available inventory for resale – from the moment they are collected until the moment they arrive back at the warehouse.

With an accurate picture of expected return volumes, retailers can assign an appropriate level of workers and resources to manage the returns and ensure the goods can be swiftly put back in stores or warehouses for resale.

Moreover, tracking returns protects both the customer and the retailer. For example, some retailers now provide a refund to the customer as soon as the carrier scans the return parcel.  While there is a level of risk to the retailer because the product might not be in good enough condition to put back into stock, customers are more likely to be loyal if they know they will be refunded quickly.  In the UK, for example, an increasing number of retailers are starting to accept Klarna, a service that makes it possible for consumers to avoid paying a retailer altogether for a purchase they subsequently return.

5. Don’t Overlook International Customers

Cross-border retail is becoming the norm. E-commerce platform Shopify reported 57% of shoppers worldwide make international purchases.  While good for revenue, this complicates returns.  Some carrier networks manage returns better than others, and therefore return shipping processes aren’t standardized across the world.

Therefore, it’s important to build a returns process that accounts for cross-border commerce, and multi-carrier shipping software can help.  For example, retailers using a single carrier for outbound shipments may need to consider alternate carrier networks for returns. With multi-carrier shipping software, retailers can rate shop the return delivery options of global carriers in their transportation network and select the services that will satisfy customers at the lowest cost.

6. Take Care of the Environment

Most retailers want to re-sell returned items when they come back in good condition. In some cases, however, warehouse managers lack concrete guidelines for determining when a return can be re-stocked and when it can be destroyed.  Unfortunately, approximately 30% of returns end up in a landfill. Scrapping items that could be re-sold, even in a secondary market, impacts profits and takes a toll on the environment.

7. Avoid the Returns Process Altogether

Some companies are trying to avoid returns altogether, with wrong or lost orders replaced at no cost to the consumer.  For example, in the United States, pet supplier chewy.com asks customers to donate any incorrect orders to a local animal shelter.  Why would they do this?  They avoid the cost of dealing with the return, which may be higher than the cost of the new delivery. And in the case of prescription medications, seasonal products, or those with a short expiration date, the retailer may be unable to process and resell the products within a suitable timeframe.

Find the Right Technology Partner to Optimize Returns

In times like these, retailers need a partner in the logistics space on whom they can count – one who can help streamline the returns process and reduce transportation and operational costs.  Ready to find that partner? Talk to a Logistyx expert today.

EPSNews: COVID-19 Pandemic Creates Persistent Uptick in E-Commerce

With COVID-19 restrictions prohibiting brick-and-mortar retail, online shopping is experiencing significant growth and could be poised to exceed the typical 20 percent annual worldwide growth figure e-commerce experienced over the last 10 years.

For instance, COVID-19 inflated electronics prices for the first time in years, with sales up 58 percent online, according to Adobe’s Digital Economy Index (DEI). With many consumers sheltering-in-place and setting up home offices and classrooms, electronics like computers, webcams and audio equipment have been in high demand.

In a recent article for EPSNews, Logistyx Technologies President Ken Fleming discusses the many ways the COVID-19 pandemic has propelled e-commerce and how adopting cloud shipping technology can provide retailers the flexibility to adjust to subsequent changes and help them minimize order fulfillment costs. For example, growing customer expectations, rising competition in the marketplace, and the increased prevalence of supply chain disruptions compelled many retailers to embrace digitization and pivot to an omnichannel model that includes a strong e-commerce strategy.

With e-commerce surging amid the pandemic, Ken also shares various shipping scenarios retailers can implement – such as Buy Online, Pickup in Store (BOPIS) – to adhere to social distancing recommendations, while offering customers cheaper delivery options to keep costs in check.

Even as COVID-19 outbreak restrictions gradually ease, many consumers may be reluctant to return to shopping in stores, likely leading to a sustained uptick in e-commerce through the remainder of 2020 and beyond. Retailers can find long-term success by viewing e-commerce as a key sales channel and identifying how they can make omnichannel order fulfillment better.

Read Ken’s full article on EPSNews: “How the COVID-19 Pandemic is Driving E-Commerce.”