Customer expectations for shipping are changing faster than ever. With the advent of Amazon Prime, accurate delivery timeslots and detailed tracking information are becoming the norm for multichannel retailers of all sizes. While giants such as Amazon and Walmart can afford to spend seemingly endless resources to cater to customers’ evolving preferences, most retailers (especially independent stores) are at a loss as to the best way to use logistics tools to maximize their ecommerce sales and grow loyalty with customers.
Yet retailers and logistics professionals have one rabbit up their sleeves that is often overlooked — data. With technology permeating every aspect of ecommerce, more data is available than ever. While it can be difficult to separate the signal from the noise, data can help retailers improve customer service and their overall supply chain and shipping processes when used effectively.
Here are six ways retailers can use readily available data to optimize distribution channels and grow their businesses:
Share distribution data with customers
Many industries view sharing information with consumers as a risk, but sharing shipping and distribution information is a great way to build trust. This is especially true in retail, where consumers often grumble about long delivery times. Sharing an estimated delivery window will ease their minds, reduce customer service calls and keep them engaged with your brand post-purchase.
Still, retailers should exercise caution when sharing this information, as transparency creates expectations. A retailer that fails to deliver an item within a stated window will likely create greater customer dissatisfaction than if no window were shared at all. Numerous technologies available today automate shipping updates to customers online or via mobile alerts. With rising consumer expectations for more precise delivery information, retailers cannot afford to ignore them.
Use data to improve internal systems
Retailers can gain insight into customer behavior patterns and preferences by analyzing delivery destinations and origins, patterns in purchasing traffic and customers’ preferred delivery times and methods.
Finding trends in customer preferences is especially useful to retailers whose goods are large and costly. They can use this data to take the pulse of their customers and optimize their supply chains (inventory decisions, carrier optimization). Since customer data is never static, it yields continuous insights that can help evolve a retailer’s logistics processes.
Recognize that quicker is not always better
It shouldn’t come as a surprise, but the vast majority of consumers will choose the least expensive shipping option, regardless of time in transit. While this goes against the buzz about two-day – or faster – shipping, customers tend to value savings over speed, and retailers who understand this reality can take advantage and save as well.
By using local and regional carriers that offer lower price points for smaller delivery areas, instead of relying solely on national accounts with fewer local options, retailers can keep customers happy while improving the bottom line. Offering cost effective white-glove delivery can further differentiate them and incentivize buyers to complete their purchase.
Offer the optimal delivery options for each order
Offering a plethora of shipping carriers to customers was once a very labor-intensive task, requiring manual labor, time and coordination. Now, software can easily automate the process, allowing retailers to propose optimal delivery options to customers for any given item.
Ship from the right location
To stay competitive, retailers must begin shipping from the most effective location, and not just from centralized warehouses. Case in point: If you live next door to a Walmart that carries the sofa you purchased online, why should it be delivered from a warehouse across the state? By activating purchase data across channels, brick-and-mortar stores can increasingly operate like mini-warehouses to ensure items are picked, packed and shipped efficiently.
Drop shipping can also become a viable option if inventory information is well managed, up-to-date and integrated with the company’s logistics systems.
Diversify delivery options
Recently, a number of companies have introduced innovative new delivery models, hoping to shake up retail distribution channels and cater to consumers’ on-demand whims. From Uber and Sidecar to Deliv and TaskRabbit, new entrants are changing the nature of on-demand delivery. Though these businesses are relatively new and their delivery services generally limited to a few densely populated cities, they will allow both consumers and retailers to test unconventional shipping methods, including blanket wrap and white-glove delivery services, to deliver items more efficiently.
In order to take advantage of all this, data must be free-flowing and connected across business systems and channels. By testing and deploying modular systems that use data to address one area of the supply chain, retailers can make step-level improvements without overhauling the entire process. They can use technology to refresh stock lists automatically, offer optimal delivery methods and pricing for every item, and respond to customer preferences. While consumer demands are quick to change, retailers can stay one step ahead by utilizing the abundant data readily available in the shipping and logistics process.
Jeremy Bodenhamer is the Co-Founder and CEO of ShipHawk