Guest Commentary: Retailers Prepare for Same-Day Shipping Options on Cyber Monday
Dan McNutt, Retail, Exel
With the holiday season right around the corner, the coveted shopping season is even closer with Black Friday and Cyber Monday merely weeks away. In years past, holiday shopping was targeted to brick and mortar, Black Friday foot traffic, but with the steady boom in e-commerce, the shopping frenzy is now taking place in the digital world as well.
According to a recent eMarketer report, e-commerce sales worldwide will reach $1.471 trillion in 2014, an increase of nearly 20% from 2013. In this environment, customers don’t just want high quality product and good customer service. Instead, they expect high quality product, often offered at a discount, in a user-friendly online environment. And they want their product quickly.
E-commerce consumer demand is forcing retailers to find new ways to compete and differentiate themselves in order to win customer sales and loyalty. In preparation for Cyber Monday, many retailers will offer same-day shipping and some will even offer same-day delivery as a differentiator. This tactic delivers on the consumer expectation of ordering and receiving goods on the same day, or at the very least, receiving confirmation that goods have shipped almost immediately upon purchase.
To help e-commerce retailers deliver on same-day delivery and same-day shipping expectations, a proven third party logistics provider (3PL) can employ a variety of solutions:
• Locate inventory closer to the customer – This is the most obvious solution for retailers. The closer inventory is to the customer, the easier it is to deliver product quickly. 3PLs can help a lot in this scenario since they source and manage warehouses and fulfillment centers that retailers can use. Instead of storing inventory in one building, retailers have the option of strategically placing inventory around the country, within a closer shipping radius to their customers.
• Leverage shared-distribution environments – 3PLs offer e-commerce retailers the option of sharing distribution centers with other e-commerce retailers. In this scenario, retailers share space, labor and distribution solutions. This minimizes the investment and lowers operating costs for retailers, making same-day shipping an easier option.
• Create flexible labor solutions in the fulfillment environment -- holiday hiring is a buzz word we often hear around this time of year. While retailers continue to beef up sales teams to handle in-store foot traffic, there is even more of a need for labor in the supply chain.
•In preparation for Cyber Monday, 3PLs will considerably increase their labor force to manage the on-time distribution and delivery of online holiday purchases. To help meet peak season labor demands, 3PLs can share labor within facilities or across a campus to allow for strategic staffing in distribution centers around the country. The benefit is that this labor is already trained on the solutions its company provides, so they are easily able to adapt to any environment or industry the 3PL operates in, reducing the time needed to hire and train new talent.
• Turn the store front into a warehouse and distribution center – Known as a component of omni-channel retailing, this option combines the use of the brick and mortar store with the online, digital experience and gets inventory even closer to the customer. Consumers make a purchase online, and the order is processed and shipped from the store that is located within closest proximity to the customer. 3PLs can offer in-store logistics services to help fulfill customer demand from anywhere at any time.
• Leverage same-day delivery options – In some cases, the option of same-day delivery is the differentiator that will convert a sale for some consumers this Cyber Monday. It gives consumers the opportunity to take advantage of the Cyber Monday deals, and it offers the satisfaction of having product in-hand the same day, but without the hustle and bustle of driving to the store, waiting in lines and fighting crowds. 3PLs can offer a variety of same-day delivery solutions by strategically partnering with national and regional companies to help get product to consumers immediately.
In today’s fast paced digital environment, delivering on consumer expectation and demand is no easy task. Same-day delivery and same-day shipping are competitive tactics e-commerce retailers will use to win customer sales this Cyber Monday. In many ways, a strong supply chain and support from a 3PL is the competitive advantage e-commerce retailers need to help turn their creative tactics into solutions, and ultimately win long term customer loyalty beyond the holiday season.
Dan McNutt is senior VP of operations for retail, Exel ([email protected]).