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What Early Holiday Shopping Means for Parcel Shipping

Regardless of whether consumers and retailers are ready, holiday shopping – and shipping – season is here! With carriers announcing capacity shortages and major headlines advertising “Shipageddon,” consumers have been encouraged to start shopping for the holidays NOW.  While this elongated holiday shopping season can certainly create new revenue opportunities for retailers, retailers can only capitalize on the opportunity if their parcel shipping operations are prepared to execute.

Nightmare on Parcel Street

Although the holidays have always been considered “peak season” for parcel shipping, this year’s unparalleled e-commerce growth has redefined and intensified that reality. Businesses relying on parcel shipping must prepare for a capacity crunch and delivery setbacks (nicknamed the “Nightmare on Parcel Street”) as FedEx and UPS capacity for the holidays is filled. ShipMatrix projects as many as seven million packages per day could be outside of maximum capacity for these two leading carriers’ parcel delivery services, and even regional and last mile carriers OnTrac, LaserShip, and Speedee Delivery have reached capacity heading into peak season.

Amazon Prime Day Kicks Off the Season

Despite Amazon moving its Prime Day event from July to October, Amazon Prime Day has remained a catalyst for competitors such as Target, Walmart, and Best Buy to launch their own offers. This year, however, these offers aren’t only available for a “limited time.” Rather than halt promotions after Amazon Prime Day and relaunch the offers closer to Thanksgiving, many retailers opted not to hit pause on their holiday sales. For example, Target is offering “Black Friday pricing all November” and Logistyx customer Home Depot is making special offers available until the end of the year.  The hope is to spread demand to prevent further strains on supply chains by encouraging consumers to shop earlier and avoid crowds and delivery delays. In addition, many carriers have encouraged retailers to run these types of sales events to increase the chances of deliveries reaching customers on time.

Holiday Purchase Trends

Extended discount periods aren’t the only changes we’ll see this holiday season. We’re also likely to witness a dramatic shift in consumer wish lists – pivoting from luxury goods to practical purchases such as home goods, office supplies, and outdoor equipment.  For example, coats and fire pits are finding their way onto many letters to Santa, as they enable friends and family to gather outside in cold temperatures while respecting social distancing guidelines.

And while electronics have always been favorites for holiday gift-giving, this year they’re even more popular. With so many people furnishing home offices and remote learning spaces, laptops, keyboards and monitors are in high demand. Unfortunately, however, internationally sourced electronics may have a difficult time meeting this increased demand due to widespread shipping delays caused by the pandemic.

Leverage Multi-Carrier Shipping Technology

Unfortunately, taking advantage of the early start to holiday shopping requires more than offers and promotions.  Facing the challenges posed by an unusual online shopping landscape, with tight carrier capacity and high shipping costs, fulfillment teams face significant obstacles entering peak season 2020. Retailers and eTailers will be on the order fulfillment end of record levels of online orders, and to manage these volumes successfully and offer cost-effective ways to meet rapidly evolving customer demands, necessary operations and fulfillment strategy implementations should already be underway.

One key ingredient to this season’s fulfillment strategy will be a multi-carrier transportation network. Growing its carrier network can help any merchant, regardless of peak season, by introducing more options and capacity into the parcel delivery mix. Therefore, retailers that want to stay ahead of delivery capacity shortages and increasing e-commerce volumes have invested in a cloud multi-carrier parcel management system that creates flexibility and diversity in fulfillment.

Though some shippers hesitate to take on additional carriers, thinking it will create more work for warehouse staff, the reality is adding new carriers to a delivery network need not be an arduous process. Some systems, such as Logistyx TME, offer an extensive carrier network that includes dozens of regional carriers – including LaserShip, OnTrac, and Speedee Delivery – making it much easier and faster to add carriers’ rates and services to a merchant’s carrier network. Additionally, TME allows shippers to embed their shipment processing rules into the system so carrier selection decisions can be as automated as desired. Many companies configure TME to select carriers and services based on their internal shipping rules as well as their customers’ shipping preferences. Once the carrier service is determined, the system automatically generates the right carrier-compliant labels. As a result, shipments routed via regional carriers are handled as quickly and efficiently as those routed via national carriers.

In addition, a sophisticated multi-carrier parcel management system will include a Control Tower, which means retailers can proactively manage against unwanted delivery events and provide shoppers with delivery transparency. Specifically, 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. 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.

The 2020 Holiday Shopping Season is Here

Now more than ever, retailers should have a parcel shipping strategy in place that delights customers and increases business. To learn more about simplifying the complexity of high velocity parcel shipping with a multi-carrier parcel management solution, contact a Logistyx expert today.

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