Retailers of all sizes are finding themselves competing against Amazon and other huge retailers to meet customer expectations, creating challenges for smaller retailers in matching the delivery speed and price options provided by the larger retailers.
A recent Forbes Insights report, “Shipping as Strategy: How Small and Midsize Retailers Can Best Meet Customers’ Delivery Expectations in the Age of Amazon,” sponsored by Pitney Bowes, examines how other retailers can level the logistical playing field. A previous blog gave an overview of the situation.
While most retailers make use of the carrier-specific shipping software provided by commercial carriers to handle the bulk of their shipping, aspects of these same systems make it cumbersome for shippers to switch carriers seamlessly and access more favorable pricing.
Some key considerations:
Carrier mix: Retailers should make use of a variety of carriers to take advantage of their respective strengths and cost efficiencies, whether UPS, FedEx, the USPS, regional carriers, or expedited and same-day services such as Deliv or UberRUSH.
Technology and workflow: The process should be automated as much as possible. That means using software that can dynamically choose the best carrier and delivery method to get a parcel to its destination within the delivery window required, and that can handle carrier scheduling and pickup, billing, label printing and tracking, all in one.
Packaging and weight: Packaging, dimensions and weight can all make a difference in the cost of shipping—so e-commerce retailers need a better understanding of how to optimize each and when to use free flat-rate packaging, for example, to keep costs low.
The USPS is already being used by shippers of all sizes and even other commercial carriers for the final mile of delivery. However, there is opportunity for it to be used to even more advantage, especially by small and midsize retailers.
The Postal Service has made significant investments in its infrastructure and sorting capabilities as well as its products and business-friendly flat-rate Priority Mail offerings. The sorting equipment is designed to handle small parcels — 5 pounds and under — which constitute the bulk of e-commerce deliveries. These factors mean it is worth revisiting the USPS in any new shipping strategy review.
The established reliability of the USPS has attracted a multitude of commercial third parties that want to partner with the service to provide added value to customers. For small and midsize retailers, working with these third-party partners, instead of on a one-to-one basis with the USPS and other carriers, is a way to access the negotiating clout of larger enterprises like Amazon without the hassles of doing their own negotiations. Typically merchants work with third-party partners either directly, by integrating an application program interface (API) into their own systems, or indirectly, by using broader order management or e-commerce software where the shipping partner’s software is an already-integrated option. A third-party shipping platform can provide additional guarantees, discounts and services over and above what the carriers offer directly.
Create a multicarrier strategy: Review your carriers and pricing. Discuss your options with other services in your area. Will you offer next-day or same-day shipping? Is the USPS part of your existing shipping mix?
Use the USPS: The upgrades the Postal Service has made over the past several years coupled with its scale of presence across the United States six days per week makes it very well positioned for B2C deliveries. Look at how and where flat-rate packaging can help you save money. Pick up some flat-rate packaging from the post office and experiment.
Have a plan for peak periods: All carriers have challenges with parcel volume during peak shipping season, including delays to delivery that don’t meet their normal service standards. Prepare for high-volume shopping periods by scaling up available labor as needed for pick, pack, ship and customer service. Forge a relationship with your carriers so that you know in advance what their deadlines and cut-off dates are. Keep the communication lines open during peak periods. And have a contingency plan in place — failovers to different carriers, if necessary.
Automate the process: Think about where automation can help your business and support a multicarrier strategy. Automate your processes as much as you can from click to delivery.
Identify shipping partners: Look for partners that can provide service guarantees, APIs that are easy to work with, and favorable pricing and payment terms, all of which should lead to deeper savings for you.
Know your products, and know your options:This means knowing your data, product dimensions, weight and more. Import that data into the system and the software can fill in the blanks.
Source: Forbes, “How Retailers Of Any Size Can Level The Playing Field In Shipping And Delivery“. (https://www.forbes.com/sites/forbesinsights/2017/11/01/how-retailers-of-any-size-can-level-the-playing-field-in-shipping-and-delivery/#4cc344a2d392). Hugo Moreno, November 1, 2017.