A few years ago, when online retailing overran U.S.-wide delivery capacity during the holidays, it heralded a major shift in consumer behavior. As the connected consumer merrily embraces shopping on computers, smartphones, tablets, smart TVs and now wearable devices, retailers themselves must become more agile, more digital and more connected. For the supply chain, the magnitude of this change is taxing physical networks and stretching manual processes, and the ongoing driver shortage is exacerbating the situation. As retailers maneuver to overcome holiday challenges, supply chain technology is becoming critical for giving consumers what they wish for from retailers and for giving retailers what they need from the omnichannel supply chain to deliver a holiday season success.
So what are consumers wishing for then?
Service: I Just Have to Have It!
For most retailers, holiday shopping means a huge spike in business volume. Because seasonal consumer demands can represent a big percentage of annual revenue, they put tremendous pressure not just on retailers’ delivery operations, but also on the third-party logistics providers that provide delivery services to retailers. While minimizing costs is important, at this time of the year, maximizing productivity is more important as the inability to serve consumers when they demand it can result in lost and non-recoverable sales, as well as lost brand loyalty.
Route optimization technology is one solution that helps retailers ensure they’re not caught flat-footed by a holiday surge in deliveries. It can provide up to a 15 percent productivity increase in delivery operations by creating the best combination of routes and deliveries, which is not possible for a planner or dispatcher to manually plan. This minimizes the miles driven per delivery and the total miles driven, so drivers spend less time on the road and more time making deliveries. In turn, this adds to overall delivery capacity and helps companies steer clear of the need to add vehicles, a significant investment for a short-term and temporary condition.
Convenience: I Want It When It Works Best for Me!
Holiday festivities bring about an inevitable hustle, which amplifies consumer demand for convenience. Gone are the days when we would take a day off work to sit at home for a delivery (that may not even arrive). One way technology is helping here is by providing greater choice in delivery appointments, and by making appointment booking and value-added services attachment part of the buying process. Some offer multiple delivery windows (e.g., seven hour, four hour, two hour) and price them accordingly. In addition, installation for some items (e.g., big screen TVs) are one-click options before checkout. Consumer-facing delivery operations bestow a point of differentiation upon retailers, and the result is more top-line revenue from premium delivery windows and incremental services. Appointment scheduling technology also helps retailers do more to improve delivery density, which increases productivity and reduces costs by lowering the number of miles driven to serve each consumer.
The push for same- and next-day delivery also intensifies during the holidays in many retail markets. As well, the option of picking up online orders in store (click and collect) is gaining more ground than the majority of retailers can handle. These pressures dictate that supply chains are much more streamlined and responsive, and drive retailers to focus on execution-based processes and technologies that reduce supply chain cycle times. Same- and next-day deliveries require close integration between appointment booking systems and global positioning system (GPS) tracking of vehicles. Real-time communications is also critical as vehicles are in constant motion, delivering to consumer homes, and picking up goods at retail distribution centers and stores.
Visibility: I Want to Know Where It’s at!
The explosive use of smartphones, tablets and mobile apps created online shoppers with a holiday-sized appetite for information, and retailers and logistics services providers alike are feeling the pinch. It’s the same low-cost, GPS-enabled smartphone technology, however, that’s allowing leading delivery operations to gain a better handle on performance—in real time—and to provide this information to consumers.
Workflow-based mobile logistics applications that include GPS-enabled tracking and turn-by-turn navigation capabilities improve delivery consistency and at-the-stop consumer satisfaction. They allow delivery operations managers to know what drivers are doing en route. When combined with smart dispatching, the estimated time of arrival (ETA) can be constantly calculated and, when a driver deviates from plan, management is immediately notified. This is especially critical if temporary drivers are hired during the holidays, and do not have all of the training and experience of day-to-day operators.
Giving consumers this same real-time information enhances service levels and reduces loads of “Where’s my stuff?” calls. By adding a simple ETA button to its consumer mobile app, one company reduced call center volume by 50 percent while its sales volume was doubling at the same time. By combining automatic notifications with real-time delivery status, consumers can be better reminded that a delivery is going to take place and get updates on delivery progress, which limits the number of failed deliveries that occur when people are not at home.
The omnichannel supply chain is instrumental not just to holiday success, but also to future business viability. While consumers are not interested in the challenges of integrating different communications channels and underlying technologies, retailers must take heed. As they struggle to provide the level of connectedness that consumers want, progress, in part, lies in leveraging technology to reinvent how to plan, optimize and execute how orders are captured, fulfilled and delivered to customers when they want and with order integrity. This season, regardless of retail sector, technology’s gift to the omnichannel supply chain is wrapped up in tighter real-time collaboration with the consumer.