By Mo Cheema, Strategic Innovations, LLC
The year 2020 is likely to remain in our memories for the rest of our lives. We saw an astonishing number of eCommerce sales thanks to consumers preferring to stay in and shop from home. With those sales came an equally astonishing demand for deliveries that, for one reason or another, couldn’t keep schedule with demand. For retailers, understanding how to get products to consumers’ hands-on time was an essential part of managing the brand and making a good first impression.
So, how can we understand the various reasons for this massive backlog of package deliveries to customers, and what can online retailers pay attention to make sure that delays of this scale don’t damage their brand? Let’s look at a few ways to make sure your customers’ packages arrive on time:
1. Keeping A Well-Stocked Inventory
Most companies in the United States utilize a “just-in-time” supply chain method to distribute their products. This means that they keep a close eye on their inventory using various forecasting methods, and when supplies start to run low, they place a new order with the manufacturer to replenish their stock.
Unfortunately for suppliers, when the pandemic hit China, the manufacturing link in the supply chain got obliterated. With supplies running low and no manufacturers to replenish that inventory, the disruption was so great that we are still seeing its impact today. In addition to making popular products difficult to source, the fundamental economic principle of supply and demand has greatly affected prices as well.
The sudden increase in demand for shipping, for example, caused companies like UPS and FedEx to announce peak season surcharges as early as August. This price increase impacted the retailers’ product margins, so naturally, they offloaded the additional costs to the end consumer.
Instead of relying heavily on just-in-time manufacturing, my recommendation to retailers and their distributors is that they keep some inventory on hand. They should utilize flexible, on-demand warehousing space from companies like Ware2Go, STORD, and FLEXE, to reduce their inventory holding cost while making sure they have the supply needed to fulfill customer orders.
2. A Store Redesign
Many retailers had to post deadlines for guaranteed Christmas delivery last year. These typically appeared as a banner at the top of the page saying, “Order by December 14 to guarantee delivery by Christmas.”
While many sellers promised delivery by Christmas, some had a more refined last-mile delivery and fulfillment strategy than others, which gave them as many as 10 extra days of selling by not having to abide by the deadlines placed on them by parcel companies. Some partnered up with companies like OneRail, a last-mile delivery management software, to offer store-to-door deliveries, while others partnered with companies like Position Imaging, an in-store staging and fulfillment platform, to offer services like Buy Online Pickup/Return in Store and Curbside Pickup.
The brick-and-mortar retailers who got crushed during the pandemic had long become obsolete because their executives wanted to cut costs to preserve margins rather than innovate. My recommendation for online retailers that have a brick-and-mortar presence is to redesign the store and make it the focal point of commerce by delivering from the store and incentivizing customers to pick-up/return at the store to reduce shipping costs.
3. Inevitable Weather Delays
Snowstorms and other extreme weather systems create an obvious problem for shipping. Trucks can’t drive through two feet of fresh snow, and airplanes won’t land in overly gusty winds. However, shipping companies have gotten a lot smarter about navigating weather systems.
My recommendation is to place the inventory closer to the end consumer. Leverage your local, physical presence that has a very small chance of facing severe weather systems. If you’re only selling online, you can leverage the flexible warehousing platforms I mentioned before, because they also provide fulfillment services such as picking and packaging. Being close to the end consumer also will help you decrease your shipping costs.
4. The Last Mile
While at UPS, I volunteered on a ride-along, as a driver helper, during the busy holiday season to get a taste for the kinds of situations drivers deal with on their routes. What stood out to me more than anything else was how much confusion was caused by barely visible or missing house numbers. They were faded, obscured, too small, missing, or otherwise not visible at night. It was getting dark and we were only halfway finished with our route.
As homeowners, when we switch our porch lights on in anticipation of a delivery, we imagine it would shine directly on the house number and that the delivery driver would know this is where they need to deliver the package. Unfortunately, this causes drivers to suffer from “porch light blindness.”, which I experienced on my ride-along. Staring into the light at night is sort of like staring into the sun during the day.
When drivers are not able to find the correct address, they must take the package back to the hub, causing another delay. A customer can either go pick it up themselves or have the driver attempt to deliver it again on another day.
The most helpful thing that can be done to help avoid package delays and ensure that packages get delivered on time and to the right address, is to make sure a home address is visible, day or night. To accomplish this, retailers, shippers, consumers, and everyone else involved in the delivery process needs to embrace a modernized addressing solution. One such solution is the eLiT, a back-lit LED address sign with large, digitally printed house numbers that can be easily seen and read by drivers. It has a dusk to dawn timer, so it automatically turns on at night, and when the driver comes to make a delivery, it flashes to grab their attention. It even helps the delivery drivers to find improperly mapped addresses by updating the address's GPS coordinates on popular services like Google Maps.
About The Author
Muhammad “Mo” Cheema is helping to revolutionize the logistics industry as Vice President of Marketing Operations at Strategic Innovations, LLC. He also had a highly influential career at UPS, where he spearheaded several new product and business concepts, developed a strategically aligned product roadmap to streamline the global last-mile delivery for drivers, and routinely engaged with the senior-level executives to influence investment decisions.