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Holiday Headaches? Retailers Must Prepare for 2021 Peak Season Challenges

While it’s the most wonderful time of the year for many, the holiday season can be stressful for the retail industry. Soaring e-commerce growth over the last 18 months has kept retailers on their toes, especially as they scramble to prepare for the added challenges of peak season 2021.

As Digital Commerce 360 reports, “2020’s peak holiday season was a peak on top of a peak” with U.S. shoppers spending $201.32 billion online during the season, up 45.2% from $138.65 billion in 2019. Remarkably, the pace of e-commerce sales has barely let up since last holiday season; meanwhile, retailers have had to contend with additional challenges driven by the ongoing pandemic, including periodic manufacturing shutdowns, transportation backlogs, and labor shortages that have disrupted supply chains for months, as Digital Commerce 360 points out.

Once again, retailers face a heavily strained supply chain this peak season, with online purchases outpacing resources required to meet the increased demand, leading to probable shipping delays on top of the reality of limited personnel, containers, and in some cases products. Retailers will have to get creative to safeguard against rising carrier rates and reduced capacity while finding ways to improve the way they fulfill e-commerce orders.

Free White Paper - Simplifying Multi-Carrier Parcel Management for Peak Season and Beyond

To minimize shipping and fulfillment headaches heading into peak season 2021, retailers should already be preparing by implementing the right mix of shipping and omnichannel strategies, including Buy Online, Pick-up In Store (BOPIS), ship-from-store, and on-demand delivery.

Developing an omnichannel distribution strategy that includes e-commerce, in-store pickup, ship from store, etc. and utilizes advanced cloud-based multi-carrier shipping systems positions retailers for success in the face of mounting challenges by providing them with greater flexibility to achieve cost savings while improving customer service and fulfillment.

Having the right technology to execute various fulfillment scenarios will improve customer satisfaction and enable retailers to better respond to peak season demand.

Contact Logistyx today to learn how you can ensure smooth parcel shipping this peak season and beyond.

What is BOPIS?

It’s no secret the pandemic has altered both the digital and physical world of commerce. Today, retailers must build a powerful presence in the right spaces (that’s spaces, plural) to reach their customers: online storefronts/D2C, e-commerce marketplaces, social media platforms, mobile channels, and brick-and-mortar stores. Omnichannel commerce allows customers to engage with brands — and vice versa — just about everywhere, and customers should have similar shopping experiences whether they browse brands in-store, on a direct-to-consumer (D2C) site, through another channel like Amazon, or on a social media platform like Instagram.

Executed successfully, omnichannel retail provides customers with a consistent and engaging experience from product discovery to product delivery, which encourages repeat purchases and brand referrals.

Let’s take a deeper dive into one riff of an omnichannel approach: Buy Online, Pick-Up in Store (BOPIS).

BOPIS on the Rise

BOPIS is hardly new. Major retailers have been offering click-and-collect services for a while, and BOPIS options range from traditional customer service department pick-ups… to curbside pick-ups… or more recently to locker pick-ups.

Typically, online customers learn whether a retailer offers BOPIS at the point of checkout. If BOPIS is available, a customer can select in-store or curbside pickup at a store convenient to them and then complete their purchase. Most stores can fulfill the order in one to three hours, and if an item is not in stock at a local store, the customer can choose to have their purchase shipped to the store (although this will take longer).  Regardless of whether the item is available same-day or next-day, when it’s time for pickup, the customer receives a notification and then retrieves their order at their convenience during the store’s business hours.

Increasingly popular, surveys show shoppers are more likely to purchase from a retailer with BOPIS services, and curbside pickup is rated one of the most desirable options. Now with the COVID-19 pandemic, BOPIS has grown exponentially, and some experts maintain it will significantly change the face of retail, as many shoppers have grown reluctant to linger in brick-and-mortar stores. The statistics certainly seem to back these predictions: according to a survey by Qudini, 62% of consumers embrace BOPIS options as a way to reduce exposure to the coronavirus.

The Advantages of BOPIS

BOPIS services enable retailers to better compete with e-commerce retailers such as Amazon by providing them with a way to offer same-day/next-day shipping to customers without incurring prohibitive shipping costs. And as proven during the pandemic, BOPIS also yields advantages such as contactless delivery, protecting the safety of store associates and customers alike.

But looking past the pandemic, retailers can benefit from BOPIS in additional ways, including:

  • Decreasing last-mile delivery costs. For any shipper, last-mile delivery costs can be substantial. Shipping an item to a distribution center costs far less than shipping an item from a distribution center to a residential address, and by eliminating the last-mile, brick-and-mortar retailers can offer fast, free shipping without compromising their profit margins.
  • Increasing in-store foot traffic. There’s a reason people joke about entering big box retailers for one thing and then leaving with $100 worth of merchandise: impulse purchases! And BOPIS plays beautifully into this phenomenon by bringing the customer into the store.

Free White Paper - Simplifying Multi-Carrier Parcel Management for Peak Season and Beyond

BOPIS Requires Some Heavy Lifting

Despite the benefits, BOPIS isn’t necessarily a quick and easy path to increased retail sales. While it’s an impressive and desirable proposition, it requires some heavy lifting to connect online and in-store inventory and to build an agile logistics network.

First, retailers must merge their in-store and online inventory tracking systems. Historically, retailers had two different inventory systems: one for distribution centers, and one for stores. Online orders were fulfilled through distribution centers, and in-store purchases were fulfilled with on-shelf inventory. With BOPIS, these inventory silos must merge, usually in the form of enterprise supply chain technology such as IMS, OMS, and WMS applications, enabling retailers to have a complete view of their entire inventory and thus empowering them to capture the biggest share possible of online sales.

Retailers leveraging a BOPIS distribution model also require a local carrier network catering to their retail footprint and a cloud multi-carrier shipping system to rate and rate shop across this network.  Furthermore, the system needs to integrate with their supply chain tech stack: IMS, WMS, OMS, and other applications. Then, when an online customer selects BOPIS at checkout, if it’s necessary to move inventory from store to store or from the distribution center to the store to complete order fulfillment, the multi-carrier shipping system automatically selects the “best cost” 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. Ultimately, retailers can satisfy customers’ BOPIS requests and drive down the cost of shipping.

It’s important to note that inventory delegation becomes a critical component for BOPIS to enhance the flow of products; retailers must determine which products need to be on hand at all locations and which products can be on hand only at specific locations. For example, snow boots may be critical inventory for retail locations in Portland, Maine, while it’s unlikely they’re necessary in Palm Springs.

Put the Right Mix of Shipping and Omnichannel Capabilities at your Fingertips

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 more about how you can leverage BOPIS as well as other distribution strategies, download our white paper: Rethinking Inventory: Matching Approaches to Business Models.

Logistyx’s Ken Fleming Explores the Ins and Outs of Gig Fulfillment for Logistics Viewpoints

The gig economy and its on-demand armies of drivers have moved people and food for years, but many retailers are now joining the likes of Target and Walgreens and tapping into Uber, Postmates, and other companies to quickly move orders from stores to local customers’ doorsteps with gig fulfillment.

In an article for Logistics Viewpoints, Logistyx President Ken Fleming examines how retailers can utilize gig economy fulfillment to better serve their customers:

“Most shippers can realize gains by embracing gig economy fulfillment sooner rather than later to offer more fulfillment options to customers and minimize the impact of carrier capacity limitations and other disruptions. Generally, merchants can better meet customer expectations and boost loyalty by prioritizing the last mile of each customer’s delivery, and gig economy carriers help many merchants do this effectively.”

And which tools and data are critical to success:

“Whether considering where to start or what they have to gain, most merchants find the necessary insights to move forward with business intelligence tools that mine their own fulfillment data and customer interactions. Business intelligence helps merchants adapt to consumer behavior shifts, like it has helped countless others navigate supply chain disruptions and other challenges.

With data from their own customer interactions at hand, merchants should look to business intelligence technology to help answer questions that include:

  1. In which markets do consumers most often abandon orders during checkout?

  2. How can we strategically house inventory to better support gig integration?

  3. Where will our inventory footprint currently support gig integration?

  4. Which stores and distribution centers will accommodate gig integration for various regions?

  5. Which products are most popular in particular regions, and how can we store them there?”

Read Ken’s full article, “Retailers Embrace Gig Economy Fulfillment,” to get a clear understanding of whether tapping into the gig economy for order fulfillment is the right solution for you.

Walgreens Launches Contactless, Same Day Delivery Nationwide for Retail Products

Leading pharmacy chain Walgreens recently expanded its e-commerce offering by introducing Same Day Delivery in under two hours for more than 24,000 retail products.

The new service allows customers across the nation to conveniently shop online or use the Walgreens app to buy retail items with no minimum order value. When checking out, customers can select Same Day Delivery and receive items at their doors in under two hours through third-party delivery partners like Postmates, DoorDash and Instacart.

Walgreens’ Same Day Delivery service builds on its pickup options implemented in November 2020, which allow customers to place orders for in-store, curbside or drive-thru pickup in as little as 30 minutes. The pharmacy chain has also partnered with FedEx over the last few years to provide prescription delivery services for greater ease and accessibility.

Before and since the pandemic began, Walgreens has modified its omnichannel fulfilment offerings and successfully adapted and reorganized to evolve along with the marketplace and help meet customers’ growing demands for convenience and safety. Adopting an agile approach to shipping and fulfilment to create a flexible supply chain helps retailers like Walgreens and other organizations work more effectively to increase responsiveness and improve customer experiences.

Contact us today to learn more about how Logistyx’s cloud TMS for parcel shipping can help you efficiently modify shipping strategies for increased flexibility.

 

Retail Success: What Does a Cloud Multi-Carrier Parcel Shipping Solution Have to Do with it?

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

If you want to achieve success as a retailer in this day and age, it’s time to fully embrace the reality that you’re in the experience business. Transactions are no longer a simple exchange of money for goods or services; consumers demand more. They expect you to win their affection and loyalty by delivering their purchases when they want them, where they want them.

Because of this, the parcel delivery experience is more important than ever. And to thrive and grow in the experience economy, more and more successful retailers turn to a cloud-based multi-carrier parcel shipping solution.

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

Retailers such as Belk, Foot Locker, and Home Depot all use our cloud software for parcel shipping, Logistyx TME, to:

This enables their global teams to reduce transportation spend, improve on-time delivery rates, fuel agility in their shipping workflows, and gain a competitive edge in their markets.

Here’s a closer look at some of the ways our cloud multi-carrier parcel shipping software can set you up for success in the experience economy.

Expand your Transportation Network

A multi-carrier parcel shipping solution allows a retailer to easily deploy a multi-carrier strategy, which means the retailer then has more delivery options to please customers. Logistyx TME, for example, includes multiple global, regional, domestic, and international carriers in our carrier library, allowing retailers to easily build a unique transportation network to serve their customers. Then, our system rate shops across this network, switching between carriers to continually optimize each shipment to achieve on time delivery at the lowest cost based on point of origin, point of destination, delivery timeframe, parcel weight, parcel dimension, and any applicable business rules.

And though each carrier has unique requirements for labeling and electronic communications compliance, Logistyx TME simplifies the complexity of this compliance. The system ensures each shipment, regardless of whether it is shipping domestically or internationally or contains hazardous goods, adheres to all carriers’ requirements, including accounting for import tariffs, packaging specifications, and customs rules and regulations – helping retailers avoid additional fees and delivery delays.

States the IT director of one Logistyx customer, “Logistyx gave us the flexibility to add new UPS services and bring FedEx into the fold. With multicarrier options, including Mail Innovations and SmartPost, we’re saving money and providing customers better delivery options.”

Improve the Customer Experience

A retailer is, in a sense, the whole of the experiences it delivers to its customers. And since these experiences are now largely taking place online, retailers have to create memorable customer experiences without traditional in-store tactics such as music, aromatic displays, and sample stations.  The answer: flawless, personalized shipping execution. Free or discounted shipping, on-time delivery, and proactive delivery event communication can go a long way toward winning customer loyalty.

Retailers can start by satisfying their customers’ needs for instant gratification. Shipping behemoths such as Amazon have made two-day product delivery the industry standard, and to keep pace, it’s critical for retailers to decrease lead times by fulfilling orders quickly and working with reliable carriers to maintain on time delivery rates. It’s important to note here that regional carriers can be the key to faster, cheaper, and more flexible delivery services, usually offering next-day ground delivery within 400 miles of a shipment’s origin – often at a lower rate and with fewer surcharges than the national carriers. Logistyx TME includes these carriers in its carrier library and can help retailers quickly connect to their services to create efficiencies in the last mile and improve on-time delivery rates.

Next, satisfy consumers’ demands for a personalized shopping experience. Modern day buyers want more than just easy product selection and ultra-fast or same-day delivery; they also want to choose when, where, and how they receive their order. By allowing customers to pick the delivery timeframe, location (doorstep, curbside pick-up, BOPIS, etc.) and rate, retailers can give their customers additional flexibility. To this end, Logistyx TME helps retailers better serve customers by not only expanding their carrier service options, but also by seamlessly integrating with supply chain technology stacks to provide retailers with the necessary agility to manage shifts in consumer shopping patterns, such as cost-effectively moving in-store inventory and shifting more e-commerce delivery origins from distribution centers to stores.

Beware: offering Amazon-like delivery speeds and flexible delivery options may still not be enough to win those repeat purchases. Delivery accuracy is also crucial. A recent study from BigCommerce states that if an order is delivered incorrectly, late, or not at all, 29% of end customers won’t order again from the same retailer. And the lost sales opportunities don’t stop there. Consumers today share their negative experiences with the world on various social media channels and review sites, which means a bad experience with parcel delivery can quickly lead to the further loss of potential customers. Not surprising, customers want to be confident their product will arrive at its destination on time, and they are now demanding real-time delivery tracking.

While Logistyx TME provides this tracking, we also recommend our customers go one step further and use the Logistyx Control Tower to receive real-time alerts when unwanted delivery events occur, giving retailers the opportunity to troubleshoot. 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. Providing updates when there has been a delivery disruption reassures customers everything possible is being done to meet the original delivery promise and ultimately demonstrates to customers their business is valued.

Beat the Competition

As discussed, a multi-carrier parcel shipping solution for retail fuels shipping workflow efficiency and improves the customer experience, which ultimately gives retailers a competitive edge. But the right solution for parcel shipping will also have other capabilities that can help beat the competition.

For starters, it will enable better decision-making with crystal-clear Business Intelligence and data analytics. So, rather than putting time and money toward shipping strategies that may decrease transportation spend and improve on-time delivery rates, retailers can invest in strategies that they know will work. With Logistyx TME’s Business Intelligence, for example, retailers can run transportation simulations to identify where significant savings opportunities exist, challenging the norm and comparing “what if” to current performance. They have a “sandbox” to approach transportation scenarios with a creative mindset and verify and measure the impact of various scenarios on the bottom line.

Logistyx TME customers also use our Business Intelligence technology to identify carrier delivery performance improvements and cost saving opportunities. This may come in the form of identifying and adjusting improperly invoiced items relating to contractual rates, accessories, guaranteed service rebates, claims management, address correction validations, or even manifested but not shipped transactions, or it may come in the form of modeling and comparing selected carrier services against actual carrier performance to find routing alternatives with lower cost implications and/or faster delivery times.

Achieve Success with your Multi-Carrier Parcel Shipping Solution

Retailers are faced with the same overwhelming challenge: to create a memorable and consistent experience across an increasingly complicated map of fulfillment touchpoints. But don’t worry, it’s not an impossible feat.

For example, Belk wanted to execute store-level shipping to better serve customers and stand out from other regional department stores. To achieve this, they integrated Logistyx with Manhattan Associates’ order management software to provide their stores with inventory visibility and instant access to carriers and services offering the best rates for each particular location.  Ken Fleming, President, Logistyx Technologies explains, “While simple in theory, executing store-level shipping presents considerable challenges for some retailers, including limited carrier selection and complex rate shopping. Our software is able to address these issues, providing retailers with the ability to move inventory from all locations whether in distribution centers, warehouses, or stores and optimize delivery cost and efficiency to improve the customer experience.”

You can get an inside look at the same tool Belk uses to achieve this success. Sign up for a demo today and see what it’s like to simplify the complexity of high volume, omnichannel parcel shipping.

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 Hindsight: Top 5 Takeaways for Retail Supply Chain Leaders

Well, we’ve reached the point where we can use the phrase “hindsight is 2020” literally. This cataclysmic year is officially in the rearview mirror, and we can start making sense of what we learned as supply chain leaders and professionals—and how we changed—during this pandemic. While it’s hard to limit the number, here are our top five takeaways.

1. The customer delivery experience is king.

In a world where anyone can build an e-commerce site (and in 2020, many did), marketing products online is no longer enough to generate an ongoing revenue stream. With a single click, consumers have myriad choices, which means retailers need to look beyond their digital marketing strategies to transform those browsers into repeat customers.

More than ever, it’s the customer delivery experience that gives retailers a competitive edge. In 2020, 40% of global retail professionals cited enhancing product delivery as a critical initiative.

Some brands were early to recognize this. For example, Amazon’s partnership with major retailers, in which the retailer accepts returns on behalf of Amazon, is just one example of the extent to which a company will go to improve the customer experience. And of course it goes without saying that even before this reverse logistics play, Amazon had re-defined the customer experience altogether by offering same-day delivery in some areas, for free.

There’s no doubt customers value this immediacy and convenience. Consider that 49% of shoppers say that same-day delivery makes them more likely to shop online. But even though Amazon and other retailers have successfully prioritized the delivery experience, it doesn’t mean it’s easy to accomplish. Like many modern business challenges, it’s technology that makes the difference.

Cloud multi-carrier shipping solutions enable companies to efficiently ship goods worldwide and improve the customer experience by:

  • Leveraging multiple carriers to offer fast and flexible delivery services
  • Increasing delivery transparency and providing proactive responses to unwanted delivery events
  • Ensuring carrier compliance to avoid delivery delays due to incorrect labels and documentation
  • Rate shopping with contractual partners to select the best carrier service for each shipment according to customer preferences and business rules
  • Identifying and quickly on-boarding new carriers to better leverage last mile services and expand into international markets
  • Using Business Intelligence (BI) tools to identify poor-performing carrier partners

2. Carrier Capacity can be a hot commodity.

Most industry experts expected pandemic-fueled online shopping to increase the pressure on carriers, but few predicted volumes would skyrocket to the point major carriers such as UPS, FedEx, and DHL would stop picking up parcels from major retail customers with “no exceptions” during peak season.

If anything, this underscored how important it is for shippers to build transportation networks that include regional and local carriers and embrace multi-carrier parcel shipping solutions that enable real-time rating and rate shopping across the transportation network. Those who prepared diligently to adopt this model in 2020 prior to peak season, found themselves in a much more manageable position with the ability to consume whatever capacity the major carriers had to offer them and then tap into other carrier services to effectively ship the rest.

3. Omni-channel is omni-critical.

While brick-and-mortar stores were closed for business, merchants had to implement curbside pick-up (BOPIC) and ship-from-store as a solution, often using their stores as additional warehouses. This allowed stores to take the path of least resistance: they could use carrier services to reach nearby consumers quickly or make hand deliveries curbside, eliminating the need for a carrier service altogether. Moving forward, many retailers say they will plan to keep distribution strategies such as ship-from-store and BOPIC in place.

For many shippers, how rapidly and efficiently omnichannel distribution can be accomplished depends on how well mission-critical fulfillment technologies have been integrated within the supply chain. Shippers using standalone systems in their supply chains will confront more challenges. Without connected systems working as one, shippers incur more costs and require more manual labor to fulfill orders. Lacking the inventory visibility and other controls afforded by integrated systems, these shippers cannot deliver the same level of customer service as their high-functioning, agile competitors.

On the other end of the spectrum, shippers with supply chains that are fully integrated benefit from inventory visibility and controls throughout the organization and can quickly augment omnichannel capabilities with specialty software. These merchants require little or no human involvement to deliver hundreds of thousands of parcels daily from either a single distribution center or by deploying ship-from-store, BOPIC, BOPIS, and other innovative fulfillment strategies.

4. Reverse logistics are taking center stage.

With e-commerce on the rise, retailers have been forced to focus on reverse logistics strategies. According to Dotcom Distribution’s 2020 e-commerce consumer survey, 76 percent of shoppers reported returning up to a quarter of their online purchases, and 56 percent said a company’s lack of a free returns policy prevented them from making a purchase.

Some companies avoid returns altogether, including many luxury brands, who choose to skip the expense 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.

For those companies committed to handling returns, however, the best way to mitigate returns costs is by implementing a multi-carrier strategy. Equipping fulfilment teams with multiple carrier services from which to choose and technology that facilitates rate shopping across carrier services will keep costs low and empower teams to work around any carrier service delays or disruptions.

Furthermore, and as stated earlier, the priority is on convenience.  Therefore, all efforts need to be made to ensure returns strategies breed customer loyalty. Forward-thinking organizations who put the customer experience first simplify returns, using dual-use labels (labels that serve the purpose of both the outbound shipment and return) or peel-off labels (where the outbound label easily peels off to expose a return label) and accepting returns of online orders in stores.

5. Carrier services are being redefined.

During the pandemic, Instacart, Postmates, Roadie, Shipt and others became household names, in many cases integrating into retailers’ transportation networks to complement traditional carrier services.

For those watching, it was easy to spot the trend and see that these gig-based delivery services were steadily racking up retail partnerships over the last several years. Many initially scaled through food, grocery, or restaurant, and in 2020, this growth was further hastened by increases in both non-perishable retailer demand and consumer adoption rates.

As companies increasingly ship orders from stores rather than from central distribution centers, we will continue to see growth in services that deliver parcels from stores to local customers – and their increasing inclusion in retail transportation networks. Expanding the carrier network and choosing to work with specialty delivery services empowers retailers to provide a consistent level of service to customers, even when carrier capacity is surging.

Furthermore, employing a multi-carrier shipping system with the ability to integrate with these delivery services will empower retailers by offering both a breadth and depth of choice so they can compare rates, delivery times, etc. between carriers and delivery services. The software provides flexibility when seeking the best way to fulfill any given order, which can be especially helpful when facing capacity limitations.

Supply Chain Disruption Breeds Supply Chain Resilience

2020 reinforced for everyone that when one industry is impacted (like retail), so are countless others (like carriers, 3PLs, and so on) and there are widespread impacts operationally and financially. Savvy supply chain leaders will use their takeaways from 2020 to create more flexible and resilient operations to weather whatever the future has in store.

To learn more about the impact 2020 will have on 2021, watch our webinar: Parcel Shipping Predictions for 2021 and Beyond.

E-Commerce Growth a Strong Signal for the Supply Chain and Logistics Job Market

Ongoing e-commerce growth fueled by a variety of factors, from COVID-19 to the increased popularity of online shopping, continues to change the way consumers shop and interact with brands. But what does it mean specifically for the supply chain and logistics industry?

A recent Wall Street Journal article pointed out that, while some brick-and-mortar retail jobs have been eliminated, more jobs in fulfillment, delivery, and related e-commerce roles were created between 2007 and January 2020 than those lost, according to Michael Mandel, chief economic strategist at the Progressive Policy Institute. While the U.S. job market continued to dip after January, the proportional rise of supply chain and logistics industry jobs is predicted to continue, which is welcome news for people across the country looking to break into this high-growth industry.

In a global economy of growing consumer expectations with new brands entering the e-commerce space and well-established brands ramping up their e-commerce offerings, a digitized supply chain backed by an experienced team helps businesses stay competitive. With this continued trajectory towards a need for increased supply chain and logistics talent, digitally transforming the supply chain to increase flexibility, visibility and reduce costs will enable all the players in the market to effectively confront these challenges.

New call-to-actionAs the WSJ points out, automation in the workforce can create anxiety about job loss, while in fact, automation often creates more and better-paying jobs than it eliminates. Companies that adopt automation use it not only to streamline production, but to find new ways to offer valuable goods and help make its workforce more efficient.

Likewise, along with creating more jobs, advancements in automation create greater accessibility to supply chain technology; so organizations of all sizes can opt in to digital transformation and create stronger e-commerce strategies that will help them compete with a growing influx of e-commerce brands across categories.

For companies looking to enhance e-commerce strategies and the way they execute supply chain outcomes, automating processes for sourcing and delivering goods through technology can offer a clearer view into the supply chain and help organizations empower their workforce to drive better business decisions.

To learn more about how a multi-carrier shipping system can meet your e-commerce shipping needs, contact us today.

Retailers: Is your Transportation Strategy Ready for Peak Season?

Peak season is always stressful for the retail industry, but the COVID-19 pandemic could create more issues than usual.  Retailers can no longer rely on their usual playbooks, with planning cycles completely upended.  For example, there is currently as much as an eight-month lead time for goods from China, and most companies haven’t placed orders, waiting to see the extent to which the pandemic will subside and economies will stabilize. And even if businesses place orders today, can suppliers fulfill these orders given the disruptions in their own supply chains?

2020 will yield a very different peak season, with retailers firing marketing engines to promote whatever goods they can get their hands on and even re-marketing unsold spring and summer merchandise as the new “it” items for fall and winter.  And will consumers even be willing to shop in-store during peak? Safety and social distancing protocols will remain for the foreseeable future, likely with limits on the number of customers allowed in a store at a given time. It’s conceivable brands will forego big in-store sales to avoid overcrowding and retailers will reduce changing room capacity to enforce social distancing. These shifts in the in-store experience, when combined with anxiety about the virus’s spread, could mean stores of all sizes will experience substantial reductions in foot traffic–and sustained surges in e-commerce orders as a result.

Retailers will have to do their utmost to attract shoppers during this peak season and provide them with a satisfactory buying experience. A key ingredient will be on-time e-commerce order fulfillment, and smart retailers will make sure e-commerce fulfillment operations are scalable and flexible enough to cost-effectively support different order fulfillment processes and satisfy the customer from product discovery to delight.

Retail Planning for Peak Season 2020

Now is the right time for retailers to review their transportation strategy and consider the lessons they’re learning during the coronavirus pandemic.  For example, is the transportation strategy flexible? Is it scalable?  Has it met the demands of this unusual environment? Or are changes necessary?

Here are six opportunities for retailers to optimize their transportation strategy to meet 2020’s peak season challenges.

1. Move from Single Carrier Shipping to Multi-Carrier Shipping

Shipping delays are something of an unwelcome holiday tradition.  A cross between fruitcake (apologies to all fans) and crowded airports (perhaps not this year).  While the end goal of any retailer 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, enabling them to specify when, where, and how they want their parcels delivered.

One strategy to simplify this complexity during peak season is to leverage multiple carrier services, including local and regional carriers.  This means for retailers using a single carrier for deliveries and returns, it may be time to look at a cloud multi-carrier shipping solution to quickly onboard new carriers and experiment with new delivery modes.

Cloud multi-carrier shipping software applications enable the retailer to quickly onboard new carriers and meet the customer’s shipping requirements from within the retailer’s system.  Cloud multi-carrier shipping software applications 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.

Importantly, cloud multi-carrier shipping software also ensures 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, and they can consolidate carriers to ensure they get the best possible price.

2. Optimize Returns

How are returns managed? Is the returns process flexible enough to satisfy customers? How much does return shipping cost? Are protocols in place to discourage returns?

The unfortunate reality is online shoppers return up to forty percent of purchases.  But top retailers no longer accept returns as a simple cost of doing business. Instead, the world’s biggest retailers critically examine their returns processes and unlock myriad insights, including:

  • Cost reduction opportunities: Is carrier service selection for returns following the same careful processes put in place for outbound shipments?
  • Identifying weak links in fulfillment: Are the wrong products being shipped? Can these be traced to certain distribution centers, pickers, or procedural problems?
  • Determining and attaching the cost of returns to outbound shipping costs: Many e-commerce businesses expect every e-commerce delivery to be returned, and they build the cost right into their products and services.
  • Identifying which products are most returned: What can be done about this?  When the lion’s share of a brand’s returns originate from the same product or product category, difficult decisions may be warranted.
  • Assessing the impact of fraudulent returns: 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, and every effort should be made to determine how often this happens and deter future instances.

3. Increase Visibility

How many customers are lost due to delivery delays?  And what’s the lifetime value of those customers?

A cloud multi-carrier shipping system with Control Tower functionality will sync and normalize all shipment data across carriers and delivery destinations, allowing retailers to manage by exception. Staff are alert to deliveries at risk of delay and as a result, they can proactively resolve issues and communicate with customers if and when a delivery window slips.   If a delay is unavoidable, they can inform the customer and potentially offer to compensate them by dismissing any shipping charges.

Furthermore, with detailed up-to-date visibility into the delivery journey, retailers can also offer customers the flexibility to change their original delivery instructions while the parcel is en route. A customer might be able to delay delivery or re-route the order to a new destination, for example. This flexibility can strengthen the customer relationship and build retailer loyalty.

4. Automate Freight Bill Auditing

Many carrier contracts include a form of financial compensation in case the service level agreement is not met. And yet it’s not uncommon to find discrepancies on carriers’ invoices, especially during the busy holiday season. By closely monitoring the performance of all carriers’ on-time delivery rates and making this data available in one place, a cloud multi-carrier shipping solution with a Control Tower and Business Intelligence allows retailers to easily identify invoice errors and reconcile carrier invoices to control transportation spend.

And the savings don’t stop there.  In addition to the direct cost savings carrier invoice auditing achieves, retailers also benefit from “soft cost” savings, such as the elimination of manual tasks including opening mail, sorting invoices, researching rates, auditing and approving invoices, paying carriers, and assigning a cost accounting code.  By eliminating these soft costs, accounting teams can redirect their resources to more strategic activities.

Furthermore, carrier invoice auditing provides retailers with an overview of invoiced carrier costs versus carrier agreements, enabling them to ensure their carrier procurement is aligned with strategy and verifying they’re receiving the delivery outcomes for which they’ve paid.  The right cloud multi-carrier shipping software will also model and compare selected carrier services against actual carrier performance to find routing alternatives with lower cost implications and/or faster delivery times, and even identify more advanced optimization strategies, such as effective ways to position facilities and inventory around the globe.

5. Consolidate Parcels

Shipping multiple parcels from Chicago to New Orleans? When retailers ship each parcel separately, they incur shipping costs for each. A cloud multi-carrier shipping system will enable “zone skipping” and consolidate parcels, using one carrier to move a consolidated shipment across multiple states, for example, and a local carrier, such as USPS, for the last mile delivery–reducing total shipping spend.  Furthermore, a consolidated cross-border shipment will only require one customs declaration, reducing regulatory hiccups. Final benefit: by using zone skipping, parcels no longer travel to multiple sorting facilities to reach their destination. Instead, shipments to local carriers are faster, which creates quicker deliveries for customers.

6. Improve Cross-Border Shipping

New call-to-actionGlobal shipping is on the up-and-up. The 2019 UPS Pulse of the Online Shopper survey reported that while “shop local” is still trending, younger shoppers also buy goods from international sellers, looking to take advantage of price, variety, and the perceived quality of products. Retailers with a domestic-only transportation strategy will have a difficult time quickly expanding their global footprint to take advantage of this market opportunity.

Seamless cross-border shipping starts with the right label.  A cloud multi-carrier shipping solution ensures that every parcel ships with the correct label and documentation, no matter the carrier, destination, or product, making it easier for retailers to expand their global reach.

Find the Right Technology Partner for Retail Peak Season

In times like these, retailers need a partner in the logistics space on whom they can count – one who can help prepare for peak season on a compressed timeframe.  Ready to find that partner? Talk to a Logistyx expert today.

 

Multi-channel Retail or Omni-channel Retail: What’s the Difference?

When online shopping, customers have the luxury of placing small, frequent orders, and they can demand shipments be delivered with Amazon-like speed directly to their doorsteps, workplaces, or other convenient pickup locations. And as choice in retail continues to grow, customer loyalty is harder to secure. On-time delivery to the customer’s destination of choice can make or break an opportunity for repeat business, and retailers are increasingly dismayed to discover that one delivery delay can lead customers to purchase from another online merchant.

As merchants strive to meet customers’ exacting expectations, endlessly chasing Amazon’s same-day/next-day delivery model, many deploy either a multi-channel retail or omni-channel retail distribution strategy to optimize success.  Here we explore how the two models vary when it comes to customer experience, and how they’re vastly different when it comes to back-end operations, from warehouse fulfillment centers to shipping delivery timelines.

What is multi-channel retail?

Multi-channel retail centers around the product, placing it in places of prominence, both physical and online, to create more sales opportunities. The assumption is customers will choose the channel that best meets their needs.

The upside?  The customer has multiple channels by which to discover and purchase their product, and the retailer has many sales channels at their disposal. The downside?  In a multi-channel strategy, all channels may be available, but not all are integrated. Each sales channel is often managed as an independent silo, from order processing to fulfillment and shipping. The customer has separate purchase opportunities, but lacks a seamless purchasing and shipping experience.  For example, buying online and picking up in the store is difficult for a retailer to execute and may not be available to customers.

What is omni-channel retail?

New call-to-actionIn an omni-channel retail model, the customer experience and brand equity are front and center. The goal is to leverage various sales channels to formulate a seamless purchasing and shipping experience for the customer.  In other words, the omni-channel model accounts for the entire purchasing process, from the customer first discovering the product… to ordering the product… to receiving the product, with fluid movement between sales channels. A customer can easily order a product online and pick it up in the store… or purchase the product in the store and deliver it to their home… or order it from one store and pick it up in another. Warehousing, order, and delivery data are synchronized between each channel, providing the retailer with full transparency into inventory and into how the order moves through the retailer’s fulfillment and shipping processes.

The Impact on Order Fulfillment & Shipping

The warehouse process, while not visible to the buyer, plays a major role in the customer experience. Every shipment is a key point for customer engagement, and the fulfillment process can make or break the experience. Failure to fulfill an order accurately and/or deliver it on time where promised, and all bets are off.

Multi-channel Fulfillment

In the multi-channel model, product fulfillment and shipping are carried out separately through each channel. These siloed processes can increase time and costs; in fact, order data in one channel often doesn’t reach other sales channels, causing the retailer to miss cost-saving order consolidation and streamlined shipping opportunities.

Omni-channel Fulfillment

The omni-channel model offers a more flexible fulfillment and shipping experience for both the merchant and the customer. By leaning on a variety of order completion strategies, omni-channel fulfillment allows the retailer to choose the shipping and fulfillment option that makes the most sense for each order.  For example, the merchant can fulfill an order directly from a store… or from a distribution center… or by moving inventory from a distribution center to a store and then fulfilling the order from the store. In doing so, the merchant is better positioned to meet customer expectations for delivery timelines and accuracy.

With the right omni-channel strategy in place, retailers can establish an approach that improves customer service and profitability. Plus, by centralizing all product data in one database, the retailer can offer more flexibility, choice, and accuracy in the shopping experience.  Stock-outs are less likely to occur, and customers can receive real-time information regarding a product’s availability at a designated location.

Omni-channel Strategy is the Key to Streamlined Operations

Today, one of the keys to success for modern retailers is the ability to achieve cost-effective parcel shipping while meeting stringent delivery demands.  Without an omni-channel strategy in place, this becomes difficult and the customer experience can suffer.

It’s time to improve the experience for all of your customers by implementing an omni-channel retail and fulfillment strategy that connects sales channels, payment methods, fulfillment, and shipping.

Need assistance implementing or modernizing your retail omni-channel fulfillment strategy?  Get in touch with a Logistyx expert today.

Coronavirus Supply Chain Preparation for Retailers: Advice from Ken Fleming in Women’s Wear Daily

No matter what you ship, staying proactive to mitigate the impacts of the coronavirus on your supply chain is non-negotiable. Of course, that’s easier said than done, especially for global retailers running into capacity and mobility issues.

As a partial antidote to this spreading concern, check out this article by Women’s Wear Daily featuring in-depth perspectives from industry experts, including Logistyx President Ken Fleming, on creating a contingency plan to diminish the effects of the coronavirus outbreak on supply chains.

Ken suggests leveraging data and technology to automate processes and identify opportunities to execute optimal parcel delivery strategies, including multi-modal solutions and inventory reallocation. Keeping a flexible, informed approach is key as the virus’ impact continues to take shape.

Is your supply chain prepared to handle the global impacts of the coronavirus outbreak?

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Logistyx TME Drives Omni-Channel Experience

Dillard’s keeps pace with significant e-commerce growth and meets increased customer expectations.

Dillard’s Inc. ranks among the nation’s largest fashion apparel, cosmetics and home furnishings retailers with annual sales exceeding $6.5 billion. Dillard’s focuses on delivering maximum fashion and value to their shoppers by offering compelling selections complemented by exceptional customer care.

Business Challenge

Dillard’s currently does a lot of parcel shipping at the store level through their “find program.” This is a program that uses its order management system to locate the exact item a customer desires and ships it from that specific store. All e-commerce orders are shipped from their e-commerce warehouse if inventory is available. If the warehouse doesn’t have the item, Dillard’s turned to a store to meet the customer’s needs. Dillard’s was looking for the ability to integrate their shipping, order fulfillment, and packing process all into one system.

Solution

Dillard’s chose Logistyx Technologies integrated with FedEx shipping functionality to simplify the delivery of items sold across their various channels. The Logistyx TME solution streamlines efficiencies within Dillard’s network by managing and executing their routing guide, including time-in-transit variables, and managing all the FedEx and USPS Carrier Compliance, labels, manifest, and EDI’s.

Benefits

  • Easy customer shipment notifications
  • Freight savings by rating and routing carrier selections
  • Optimize businesses’ transportation performance by providing complete visibility and control for inbound and outbound shipments