How Retailers Can Adapt to the New Face of Shipping
Changing consumer demands and increased competition are ushering in a new era of retail fulfillment and delivery. The new face of shipping that will take form over the next year will be completely catered to consumers, who now expect fast, free shipping and returns as the industry norm.
There are several strategies retailers can adopt to appeal to today's tech-savvy, budget-conscious consumers, and compete with industry giants such as Amazon.com:
1. Simplify returns. With rising customer acquisition costs, retailers need to take every step to ensure they keep existing customers happy. A robust and free return strategy is an effective way to achieve this.
Offering free returns mitigates the risks and insecurities around online shopping, and increases customer confidence in purchasing decisions. As a result, average order volume and frequency increases for retailers who offer free returns, ultimately improving the lifetime value of a loyal customer.
While the end result will be higher sales, an increase in the average number of returns can prove costly to retailers that are ill-equipped to handle the additional workload. Retailers must view a free return policy as a long-term investment. It's critical to have a highly efficient return process and strong understanding of the expected increase in freight, shipping and receiving costs before implementing such a policy.
2. Improve the omnichannel user experience. Successful retailers place a premium on providing an exceptional omnichannel user experience. Customers should be able to browse for products online, order from their mobile device, pick up their product in-store and return through the mail, all while receiving a consistent shopping experience across every touchpoint. While omnichannel strategies offer enormous growth potential, most major retailers still have a long way to go.
3. Leverage data to improve forecasting. Amazon may be taking big data to the extreme by eventually offering "anticipatory" or "speculative" shipping. In an anticipatory shipping scenario, Amazon will use its trove of customer data to speculate where and when a consumer will order something and have it ready to ship as soon she places the order. In theory, this would dramatically increase delivery speed and make the pick and pack lines in a warehouse more efficient by proactively preparing customer orders.
Maria is CEO and co-founder of Dotcom Distribution, where she has played an integral role in developing and defining all aspects of the operation, including sales and marketing, operations, finance and IT. Her strategic leadership helps the Board and senior management to establish long-range goals, strategies, plans, and policies. Maria has developed the systemic and procedural infrastructure necessary to provide timely and accurate analysis of budgets, financial reports and financial trends in order to assist the Board, senior executives and clients in performing their responsibilities. Maria holds a CPA. Prior to founding Dotcom, she began her career as an Auditor at Arthur Andersen and was the CFO of GoodTimes Home Video.