Last Days to Ship? 7 Tips to Meet Holiday Deadlines

According to MarketWatch, Deloitte is forecasting a 1% to 1.5% year-over-year sales increase for the upcoming holiday season, during which time total retail sales will be about $1.15 billion (between November 2020 and January 2021). Meeting holiday shipping deadlines will be more important than ever.

“E-commerce sales, which have been strong throughout the coronavirus pandemic, are expected to climb 25% to 35%, reaching $182 billion and $196 billion,” Deloitte predicts. “Regardless of the scenario, however, consumers’ focus on health, financial concerns, and safety will result in a shift in the way they spend their holiday budget.”  

Here are seven tips for making sure your holiday packages get to their destinations on time.

7 Tips for Holiday Delivery Success 

The new realities of the current shipping environment have created ongoing service delays and disruptions, both of which have compounded into an overall capacity crunch for small parcel carriers. Working through this issue will require forward-thinking companies to adjust accordingly.

For example, shippers will need to be more creative and flexible to cope with the combination of COVID and the normal peak season. FedEx, UPS, and other carriers are hiring a lot more workers for the season, but we still expect to see some capacity issues. With the uncertainty, it will be more important than ever to inform customers when to expect shipments and be extremely transparent. 

Here are seven tips that will help you get your packages to their destinations on time: 

  1. Know the cutoff dates. FedEx’s last days to ship calendar is online here and UPS publishes its holiday deadlines here. The USPS plans to release its cutoff dates for holiday shipping sometime in October. Be sure to factor in these last days to ship dates when planning your holiday shipments. 
  2. Talk to your carriers. Proactively communicate with carriers regarding any expected increase in volume and any additional equipment requirements (e.g., feeders or bulk-type pickups). This will help your carriers plan ahead and provide some assurance that there will be capacity to accommodate your volume spikes (or, allow you to make alternative arrangements). 
  3. Next, talk to your customers. Companies should proactively communicate anticipated delays and properly set customer’s expectations on their websites and in any email communications. This could be as simple as featuring the holiday cutoff shipment dates prominently on the first page of your website. 
  4. Know the limits. Shippers should clearly understand any potential volume limits or caps that may be put in place by the carriers. Because these constraints can impact your ability to deliver on time, be sure to discuss them with your carrier. 
  5. Explore your options. Shippers should also understand their carrier options and negotiate favorable agreement terms to properly leverage all national, regional, and postal carriers. Having a “Plan B” in place is always a good idea during the busiest times of the year. 

  1. Start your product promos early. Don’t wait until the last minute to kick off your holiday promotions. Starting early will help you pull volume forward to avoid peak shipping periods and allow time for expected delays. 
  2. Factor in holiday business schedules. For example, USPS is closed for all of the major federal holidays. With delivery times varying between its services, knowing the cutoff dates and hours of operation are both important. 

Maintaining Transparency  

Reflecting on how parcel carriers performed for the 2019-20 holiday shipping season, UPS’ SurePost and FedEx’s SmartPost both assured 100% delivery for holiday orders that were shipped on or before December 14 or 9 (respectively). However, we also saw that as the cutoff date approached, those commitments slipped. This is something to keep in mind as you lay out your plans for the 2020-21 season. 

Using the tips outlined in this article, you can strike a nice balance between growing your company’s holiday sales while also letting customers know that there is a risk of passing the carrier’s “suggested date” for accepting pickup for a Christmas delivery. Through full transparency and good information, you can effectively manage customer expectations while also syncing with the carriers that will deliver the goods to their doorsteps.  

Peak Season Performance Requires Visibility

To make sure holiday shippers are aware of the latest trends affecting their transportation cost management, we convened a roundtable of our parcel experts. Watch or listen to our webinar “Peak Season: Are You Ready?” to hear Todd Benge, Robyn Meyer, Toni Caputo, Bernie Reeb and myself address the unprecedented challenges emerging his year.

This digital event shares strategies to help you protect profit and enhance customer experience. Watch it today to make sure you are getting charged correctly and manage the capacity risks that threaten to derail your performance.

7 FAQs Answered with Supply Chain Visibility

“They have better visibility into the structure of their supply chains. Instead of scrambling at the last minute, they have a lot of information at their fingertips within minutes of a potential disruption. They know exactly which suppliers, sites, parts and products are at risk, which allows them to put themselves first in line to secure constrained inventory and capacity at alternate sites,” concludes Arizona State University professor of supply chain management Thomas Y. Choi.

Peeling into the physical layers (where is my shipment?) and virtual layers (which customer/SKU combinations are profitable?) of supply chain visibility, business leaders can uncover data evidence to drive network decision-making. Combined, information gathered through both layers of visibility answers questions that improve cost control and service to customers.

Where and when?

At its most basic, supply chain visibility gives you physical location of a product in the supply chain. This can include where an inbound shipment is, where you have inventory, or when a shipment will arrive at a customer. When you have this type of visibility, you can make decisions around production scheduling, facility/customer alignment and proactive communication to customers for delivery expectations. Visibility allows the awareness needed to provide the highest level of customer service while maintaining cost control.

Where are the suppliers?

Understanding your suppliers’ geographic location is critical not only to executing a robust network design but also in mitigating risk. Understanding the production and shipping locations of your suppliers during a period of disruption allows you to execute contingency plans developed during modeling exercises.

For instance, when an overseas disruption affects a foreign supplier, maintaining a geographical awareness of primary supply chain partners is vital. Combine location information with advanced understanding of alternative sources and you can facilitate a rapid crisis response that protects customer experience and prevents other breaks in the supply chain.

Where are the customers?

Your customers and their demand drives everything about your supply chain. From the locations of your distribution centers to the shipping options available to meet customer service requirements, having a detailed understanding of the concentration of demand means you can work backwards to develop efficient and reliable options to keep them happy.

Take for example an emerging market in a different region of the country. Customer expectations for delivery are very high. Not providing a high level of service is not an option. Options exist to leverage expedited freight but may make the price point too high or erode the margin on the product. A partner warehouse may be a good option to position inventory to meet service levels without investing in owned brick and mortar.

Where is the inventory?

Your physical assets connect the vendor and customer locations. These assets allow you to position inventory to mitigate risk while providing the service customers expect. Having complete visibility to where and how much inventory you have is critical to making smart sourcing decisions:

  • From which location can I fulfill the order?
  • Is it cheaper to consolidate or split the order?
  • Can I drop ship?

Understanding all of the inventory options available enables you to leverage your vast web of connections throughout your supply and customer base to delight your customers.

Can I access all my data?

Your supply chain generates a tremendous amount of data. Accessing all of it is not easy, especially when you are working across multiple vendors, customer segments, product categories or transportation modes. Consolidating your information across disparate systems and sources is the first step toward gleaning actionable improvement opportunities from your supply chain data. The more access to information you have, the more it can impact your bottom line.

An expert partner with significant technology capabilities can compile disparate data in an accessible repository and provide it in personalized dashboards, as well as apply experience-inspired analysis. Accessing that analysis in the same platform as operational data and tactical execution activities is critical to supporting quick, evidence-based decision-making.

What is cost to serve?

For each product and customer, executive leadership needs to understand cost to serve, which reflects all the activities and costs incurred as movement and conversation occurs from vendors through your network out to the customer. Cost to serve metrics provide actionable information by enabling visibility into the profitability of individual customers and products, and finding a fulfillment configuration that balances service and margin.

By utilizing actionable data derived from historical shipment information and running what-if scenarios with regional data and characteristics, you can develop the most responsive and efficient supply chain that meets customer demand for the best cost.

Why is my cost going up/down?

Leveraging robust score cards can provide insight into the factors that are driving your financial performance. Not all drivers are completely controllable. You cannot make your customer order from a different location or change what they want to buy. There is an old adage “you cannot change how other people act, only how you react to them.” The same holds true for the supply chain.  Develop plans to react to supplier performance and customer behavior to set up your company for success.

It is absolutely critical to have an unbiased party developing and interpreting the scorecards and information produced. You want objective viewpoints that highlight all options available to contend with dynamics in the marketplace. Not only do you want a view into your data but also what is going on within the market. In the new environment, it is more critical than ever to leverage every bit of available information across the marketplace.

Combine Layers for Master Vision

Physical visibility to shipment, service and costs can be accessed through very basic solutions that exist in the marketplace, some at low or no initial cost. Customization often requires additional investment, and visibility is black and white based on data made available by vendors, clients or carriers. A basic Transportation Management System provides tactical visibility to all of the connections in the supply chain, and it can enable cost savings.

Virtual visibility to all the activities that drive cost, service and reliability allows you to delve into the “what” and “why” around supply chain performance systematically and regularly. This requires investment in people, process and technology. The return on that investment: an enhanced ability to react to supply chain changes that impact performance. You also improve service to partners and customers.

Visibility does not just happen, and it is not free. Corporate alignment from the top down is required to achieve a complete solution. You want knowledgeable resources with broad experience to help guide you.

We created Mastering Your Supply Chain: Layers of Visibility to give you greater clarity into your end-to-end network. Read it today and uncover information you need to drive competitive advantage.

Cost Changes Hide in Shift to Online Fulfillment

By expediting moves toward ship-from-store, buy-online-pickup-in-store (BOPIS) and other alternative fulfillment options, those retailers seized a growth opportunity in a slow economy. At the same time, they continued to move inventory, employ associates, and effectively utilize brick-and-mortar assets all while delighting customers.

However, in the rush to make those changes and meet consumer demand, it is not enough to have resources capable of adapting and executing your supply chain network strategy. It is essential that those resources provide a clear understanding of how alternative services affect costs across your transportation network.

While offering service alternatives to a demanding consumer base can drive revenue growth, profit margins can quickly disappear without awareness to how those new delivery options can affect freight cost, time-in-transit and carrier utilization, among other key transportation performance metrics.

We help our retail clients recognize the financial implications of their service changes with a transportation alignment study that helps them quickly redesign their network strategy, execute on transportation procurement and access the evidence required for decision-making that protects profitable performance.

Evolving Fulfillment Strategy to Meet Online Demand

When the pandemic began affecting U.S. retailers, many of our clients with distribution centers faced the risk of closure due to “Stay at Home, Work Safe” guidelines issued by federal and local agencies. At the same time, revenue was stagnant for retailers with brick-and-mortar storefronts that were required to close due to social distancing expectations.

With online sales booming, some of our retail clients took brave action to convert darkened stores into mini-fulfillment centers. Deploying staff from distribution centers and stores to complete fulfillment activity at the retail locations, these clients are not only able to keep staff gainfully employed, they are also utilizing store inventory that might have otherwise gone unsold.

Making this type of move with your fulfillment strategy can happen quickly – scenarios within 10 days have been reported for some retailers. Adding BOPIS with curbside capabilities can happen in 60 days. These types of changes have become a necessity for retailers across the country, but by changing fulfillment models, these organizations also completely changed their supply chain and distribution network. Unfortunately, because this adaptation occurred so quickly and with such a need to continue business, it is not always supported by the essential transportation study and analysis that determines the cost implications of the network changes.

Do you have the systems in place to determine how these changes affect freight cost, profit margin and customer experience?

Leveraging Data, Analysis to Manage Cost of Online Fulfillment

As our retail clients are rapidly responding to the changes the pandemic is driving in consumer behaviors, we use technology tools and industry expertise to support network alignment studies that clarify cost implications of service changes.

Using historical shipping data, analysis and multi-modal expertise, we help clients manage cost/identify opportunity by providing greater visibility to:

  • Impact of network changes to overall transportation cost
  • Time in transit through predictive modeling based on carrier zone information
  • Freight expense as percentage of cost to serve
  • Margin impact by product level
  • Consumer geography and accessorial changes
  • Overlapping shipment details
  • Store-level profitability
  • Split-order percentage trends
  • “True” customer experience metrics
  • Consumer behavior analysis

With the results of our network alignment/margin management study, we help our retail clients make changes to their carrier contracts, their carrier utilization or their market response. In doing so, we’re able to help make sure they are fulfilling orders in a profitable way, while protecting customer experience.

Master Online Fulfillment

Organizations that create a supply chain personalized to the expectations and behaviors of their customers can achieve greater brand loyalty and improve customer retention. At the same time, the shippers that establish a nimble network can rapidly respond to fluctuations in supply and demand and capitalize on opportunities for growth.

If your business is pursuing rapid deployment of alternative fulfillment practices, make sure you understand fulfillment costs at the retail store location. Retailers that can manage network costs associated with a strategy adjustment in order fulfillment can realize competitive advantage. That’s especially meaningful in a tumultuous environment where rapid supply chain pivots are required to capitalize on changes in consumer behavior.

As a supply chain master, we’ve worked with hundreds of organizations mapping thousands of supply chains. Applying expertise across diverse retail categories and industry segments, multi-modal transportation management capabilities and technology-enabled data management and analysis, we help clients align their transportation practices with their business goals.

To master your online order fulfillment and deploy a variety of final delivery options talk to one of our experts today.

The Service Merchandise Experience: Omnichannel in the ‘80s

Standalone brick-and-mortar structures with expansive parking lots — most of which were packed with cars during business hours — Service Merchandise stores were where people went, catalog in hand, to look at product displays and check off their selections on order forms – or in a computer terminal. A few minutes later, their goods appeared on a conveyor straight out of the onsite stockroom.

Let’s explore Service Merchandise’s roots, dig into its retail strategy, and see how its strategies for customer experience can apply in today’s omnichannel retail environment. 

Customer Experience Innovator

Headquartered in Brentwood, TN, Service Merchandise was built on an innovative business. The company broke new ground in a handful of retail landscapes. In fact, many of its competitive moves were well ahead of their time, leading us to believe that Service Merchandise may have actually mastered “omnichannel retail” decades before the term was even coined.  model. Initially a variety store opened in 1934, it went from being a chain of dime stores to a catalog business. Operating from warehouses in Tennessee, that business eventually morphed into the showroom concept that made Service Merchandise famous. 

  • 1980 – Allowed customers to place orders via specially equipped TV sets.
  • 1981 – Developed a computer program that used demographics and a specific location’s characteristics to predict the market.
  • 1982 – Installed a cash register that allowed customers to check on product availability and order merchandise right on the sales floor. 

Three years later, it implemented a computerized inventory replenishment system that helped it reduce inventory carrying costs while also reducing its out-of-stocks. In 1986 it opened an automated, 752,000-square-foot warehouse in New York.

Convenient Fulfillment Options

For retailers, having the right inventory at the right place and at the right time has become table stakes. Service Merchandise served multiple channels efficiently from its brick-and-mortar locations. It had walk-in business, for example, and it also had a successful catalog component. Really, the latter is no different than today’s online environment, where “order online-pickup in store” is the newest dynamic that retailers are trying to harness. 

“The catalog was not for people to order from,” says Raymond Zimmerman, CEO of Service Merchandise. “It was an advertising tool – people could pick what they want and come into the store. If that customer drove three blocks to come into our store, they expected to get it. We had to be in stock every day, on every item.”

Service Merchandise also leveraged brick and mortar locations to meet retail customers where they were. Inspired by UK-based retailer Argos’ fulfillment model that allowed freight deliveries to a secured inventory room without store access, Service Merchandise tested a warehouse-only model. 

In Metro Atlanta, a handful of 13,000 square-foot suburban stores opened with the catalog as the main attraction along with a few display items. Customers could access Service Merchandise inventory in the warehouse and have it shipped to the catalog store for next-day pick-up.

Everything was in stock, but very little was on display. 

“All the online guys are opening brick-and-stores or they are creating places where you can pick up merchandise in the existing stores,” Zimmerman says. “That’s where we were going – to have all those 10-15,000-square foot stores, so we could open hundreds of them close to the customer. … In the ‘80s and ‘90s, we were where everybody is trying to get to now. It was the implementation that was our failure.”

The retailer developed inventory management systems that, if one location was out of stock, store staff could identify the five closest stores with the item on site. The customer could pick it up there or have it shipped to their home by UPS. 

“We took that system and expanded it so that you could go to a store in Columbus, Ohio, pay for something and send it down the conveyor belt in the Tuscaloosa, Alabama store,” Zimmernan says. “At the time, customers couldn’t go online and order and then pick up in the store.”

Customers Want to Experience their Purchases

Service Merchandise knew that its customers really wanted to experience a product before buying it. They like to go into the stores to look at and touch products. Stores didn’t really need to have all of their inventory visible and stacked to the ceiling when those customers walked in the door. 

But they did need to make sure items promoted in the catalog were available in local store inventory.

“The hottest item that wasn’t in the catalog was less important than the worst item in that catalog,” Zimmerman says. “The customer that comes in has pre-shopped and they knew what they want.” 

So the question becomes, is there really a need for high levels of inventory on the retail floor, if all customers want to do is experience the product versus walk out the door with it? 

Ultimately, customer experience was enhanced by the Service Merchandise strategy of separating the sales floor from order fulfillment in the warehouse.

Many retailers trying to fulfill multiple channels from physical stores often threaten their in-store success. Likely earmarked for in-store or curbside pick-up, those orders consume labor and get in the way of a pleasant shipping experience for customers. The sales floor isn’t very welcoming when aisles are congested with big carts and harried fulfillment individuals trying to quickly fill carts.

Omnichannel Fulfillment Jeopardizes Performance

We’re in an era where higher fulfillment costs continue to erode retail margins. It’s time for stores to think harder about how to fulfill orders across all channels while also factoring in parcel transportation costs and how to package in a way that minimizes dimensional charges.

Knowing the struggles that retailers face as they navigate the complexities of omnichannel fulfillment, reflecting on how Service Merchandise approached the customer experience could give companies a clear advantage in the marketplace. 

To help retailers understand how to protect customer experience while balancing the cost of service, we created “Prime Before Its Time: The Service Merchandise Experience.”

Download the guide to learn how the retail innovations of yesterday can help you deliver a prime performance today.

5 Ways to Build an E-Commerce Delivery Engine that Wins

Facing stiff competition from web-based suppliers, e-commerce providers and even traditional companies, retailers must enhance the customer experience by offering variety in delivery options − and all without impacting the cost to the consumer.

In most cases, achieving this balance starts with a modern e-commerce engine that’s supported by a robust transportation and fulfillment approach.

E-commerce delivery is increasingly important to retailers seeking to serve the digital marketplace.

Best Practices Achieve Competitive Advantage

Here are five critical steps for developing an e-commerce transportation and fulfillment plan that goes head-to-head with the e-tailing giants. 

  1. Make your website user friendly. This sounds elemental enough in theory, but in reality, very few companies are doing it. Success in e-commerce starts with a user-friendly interface that doesn’t frustrate customers or send them off to buy from another site. If your online store’s ordering system is cumbersome and difficult to use, no one is going to use it unless they have to. And mobile friendly is vital.
  2. Drive up online checkout rates. The retailer that isn’t boosting online checkout rates will quickly find itself struggling to survive in a sea of companies that have figured out the formula. If you ignore the need to drive down abandonment rates, all of the advertising, marketing and sales efforts in the world won’t help you compete against the likes of Amazon and other large e-tailers. Measure key performance indicators (KPIs) like page views to cart conversions in order to get a gauge on 1) current state, and 2) what you can do to drive those numbers up.
  3. Develop a same-day order fulfillment strategy. Handled improperly, same-day delivery can be a logistical nightmare and major risk for retailers. Although becoming a necessary evil that all retailers must do for at least some of their customers, making that happen requires locations and/or warehouses positioned close to those buyers; a modification of existing fulfillment procedures; and ensuring that the right product is in the right place and at precisely the right minute. Aligning BOPIS strategies with profitability is significantly important when developing same-day order fulfillment.
  4. Factor in parcel, heavy home, and customized deliveries. When it comes to bulky goods that require extra muscle and/or assembly, retailers need to factor in three different scenarios: leaving the box in the entryway of a home or apartment; placing it in the room of choice; or both, plus opening up the box, removing the packaging, and setting up the product(s). Retailers must deliver on some, or all of these, expectations for the end consumer, who is typically willing to pay for those additional services.
  5. Select the best and most economical transportation mode. Retailers don’t always have access to the data that allows them to utilize economical mode selection. Instead, they focus only on getting same-day and next-day shipments out the door as quickly as possible (without worrying about whether or not those are the best and most economical decisions). Retailers should be leveraging carrier contract agreements that align with package characteristics/shipping networks. They should also use technology (i.e., transportation management systems or TMS) to select not only the mode that is most economical and provides tracking visibility, but one that also meets customers’ delivery expectations.

By keeping customers at the center of the conversation, providing visibility to shipments, working to fulfill their needs on every order quickly, and developing a transportation plan that aligns with these goals, smart companies can position themselves as suppliers of choice in today’s competitive e-commerce world. 

Ready to learn more ways retailers can improve e-commerce performance to satisfy customer demands for service and choice? Download Transportation Insight’s e-commerce guide, Managing the Risk of Racing Amazon.