An action sports retailer with 275 stores was experiencing challenges with cross-store and consumer shipping, as well as visibility with tracking shipments. The retailer had a very connected customer base, mainly comprised of Millennials, and had little to no automation, efficiency or visibility.
A typical day could involve a store employee being instructed to send shipments to another location in two days. The shipments were sent via second day air premium services rather than ground, even when the other store was two miles away, which was a 300 percent price difference. There was also no shipping cost transparency or ability to track packages, making reporting and reconciliation difficult.
This example demonstrates the real need for retailers to find flexible shipping solutions that can help them evolve and manage costs as they deploy new stores and warehouses. The requirement to have flexible and customizable business rules that can automate the correct selection of carrier and service is key, as is location independence with a solution that can be accessed from anywhere.
Ultimately, this retailer implemented cloud-based solutions with a partner that integrated their warehouses and stores to enable anywhere to everywhere shipping to consumers and to other stores. The continuous collection of shipment and tracking data enabled store visibility from a central online portal. The stores were delighted to be able to know when inbound shipments would arrive at any point in time, as well as being able to ship the right way, every time, as maintained by their transportation and store operations teams without IT involvement.
Today, the retailer has more than 550 stores that ship domestically and internationally. In the first year of implementation, shipping costs were reduced by 25% by using multi-carriers and optimized business rules, in addition to an increase in employee productivity and satisfaction.
This illustrates how commerce cloud technology can help U.S. retailers better manage costs, track deliveries and help ensure an improved end-to-end customer experience. Businesses can utilize commerce cloud services not only as a way to reduce the impact on internal Information Technology (IT) resources, but also to provide a global view of shipping services used anywhere in the supply or selling chain. Properly architected solutions allow companies to utilize multiple services in multiple locations to get optimum availability. The following are three strategies that retailers can take to better manage the complexities.
Provide greater and accurate visibility on shipments
Today, individual stores may be using stand-alone platforms or carrier-based portals, which can limit enterprise management and offer little or no roll-up reporting. To manage workflow for incoming and outbound packages and negotiate favorable pricing, retailers need visibility into the full range of shipping activities enterprise-wide. This is where cloud-based technology can help.
Optimize how you ship to manage costs more effectively
A parcel management system that provides access to ship with multiple carriers can help ensure that shipping costs are kept as low as possible. In many cases, retailers find that store-to-store and store-to-consumer requirements can open the door for the use of regional carriers, which may be less costly than national alternatives.
Expanding Beyond the U.S.
Cross-border ecommerce transactions can add a lot of complexity, but they are also a significant market opportunity for U.S. retailers to grow their businesses. In a recent study we conducted with ORC International, which polled approximately 12,000 consumers in 12 countries, the U.S. was the number one e-destination where international shoppers would purchase goods online from retailers outside their own country. To tap into this opportunity, U.S. retailers should consider what countries hold the greatest opportunity for their business. Also, collaboration with the right partners that understand and can address the complexity of cross border shipping critical in helping to deliver the end-to-end consumer experience.
By incorporating some or all of these strategies, retailers can not only help deliver a satisfying experience to their customers, they can position their business for growth and savings opportunities. In addition, they can move towards the future of global ecommerce, which will enable purchasing and shipping goods from anywhere to everywhere.
Keith McCall, Vice President and General Manager, Enroute, Pitney Bowes