Executives don’t get where they are by jumping on every passing trend. True business leaders are the people who can assess all of the options in front of them and make choices that enable their companies to stay current and continue growing. Strategic timing is key to this process, and sometimes the right choice for an organization is to hold steady, waiting to see how newly introduced technologies and shifting trends will play out.
But when it comes to logistics, the wisdom of “wait and see” has become an albatross, standing in the way of progress and costing companies dearly. The heavy goods shipping sector, in particular, has a tendency to lag behind current trends, hesitating to implement proven solutions that improve processes. Some even continue to manage logistics with siloed, un-synced spreadsheets, or even paper logs. For the retailers that rely on them, these antiquated processes can spell disaster. Many successful direct-to-consumer brands that launched or enhanced their digital storefronts during the pandemic are benefiting from partnerships with shippers using modern technology. Sticking with shippers that maintain the status quo spreadsheet method risk incurring the cost of inaction, seeing their businesses suffer and ultimately drifting into the past themselves.
Legacy Businesses Are Missing Out on Significant Technological Advances
The technology with arguably the greatest ability to revolutionize logistics for retailers is a combination of integrated warehouse management systems (WMS) and transportation management systems (TMS). The link between the two is intuitive. WMS contain crucial data, including the volume and location of a retailer’s products in the warehouse, while TMS are used to track the movement of products once they leave the warehouse. Together, this data enables increased visibility across the supply chain and a more streamlined flow of information, reducing manual work, human error and costly delays, leading to a smoother and more efficient shipping experience.
Though they're often used separately, integrating WMS and TMS interweaves their data to provide a single source of truth across every stage of the delivery journey so that companies can clearly spot issues and adjust accordingly. Maybe they need to implement more secure and durable packaging, or update loading practices to prevent packages being left outdoors and exposed to elements while they’re being transferred onto trucks. For online retailers, especially those whose products include heavy goods like furniture and appliances, choosing a shipping partner that embraces these up-to-date solutions is key to customer satisfaction, loss and damage prevention, and more — all of which impact the bottom line.
What Retailers Risk
When retailers fail to work with heavy goods logistics partners that integrate TMS and WMS, the lack of visibility can lead to more damaged merchandise. These damages represent an enormous waste in terms of both product production costs and the costs of orchestrating returns from unhappy customers. No matter how much effort a digital commerce business puts into perfecting its product, it can’t avoid the negative fallout of a poor shipping experience on the part of the customer. If fulfillment experiences are consistently negative, it can effectively constitute a product-harm crisis, described by Business Horizons journal as, “among a brand manager’s worst nightmares.”
Even if products aren't damaged, inefficient deliveries are a major drain on companies’ resources. The more trucks that roll out at less than optimal capacity, the more trucks a retailer has to employ. This inflates the overall cost of shipping. Even if digital commerce businesses don’t receive a line-item list of everything that goes into fulfillment (from paying drivers and maintaining vehicles, to the cumulative costs of gas and toll prices), they certainly feel it when that list grows.
What’s more, at a time when customers are increasingly making purchasing decisions based on environmental impact, inefficient deliveries can hurt companies because they hurt the planet. IBM’s Institute for Business Insight reports that four out of five customers consider sustainability an important consideration when they’re choosing a brand. Using technology helps to optimize logistics, reducing unnecessary greenhouse gas emissions and signaling a dedication to sustainability that customers appreciate.
Retailers that embrace innovation and implement modern solutions are better able to update their offerings and keep pace with evolving consumer needs, growing their customer base and increasing brand loyalty. Technology to modernize the supply chain is no longer new, but too many hesitate to act, and companies that rely on logistics partners with old processes suffer the consequences, particularly when shipping big and bulky goods. Online retailers that leverage technology are differentiating themselves from competitors through improved experience, reduced damage rates and claims, and the ability to meet customer expectations quickly. Retailers that keep their technologies stubbornly moored in the past will find themselves relegated to it, while technology-powered competitors will continue on the path toward growth and success.
Doug Ladden is the CEO and co-founder of Deliveright, a unified platform to manage the delivery of heavy goods.
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Doug Ladden is CEO and co-founder of Deliveright, the company behind AI-powered logistics and delivery platform Grasshopper. The company focuses on final-mile deliveries of big and bulky goods for retailers. Prior to Deliveright, Doug was a co-founder and senior partner of DLJ Investment Partners, which managed a series of middle-market mezzanine funds with $3.5 billion in assets under management. As an active investor, he sat on multiple boards of directors for companies including TransCore, a leader in electronic toll collection systems and digital load boards at truckstops.