The not-so-distant past: Parcel management was a “one to many” story about tracking a cargo ship or a boxcar filled with goods going to one destination.
The new reality: Billions of parcels from various locations are sent to billions of people with real-time tracking along the way.
The omni-channel world of easy-click shopping, ship-from-store and ship-to-store – here as well as cross-border – has created a consumer-fueled avalanche of parcels that did not exist a few years ago. This fundamental shift and growth in parcel shipping is having a profound effect on businesses around the globe. The Pitney Bowes Parcel Shipping Index, based on proprietary and published data of 12 countries, found parcel shipping volume was 31 billion in 2015, a 2.9 percent increase over 2014. Furthermore, the Index forecasts parcel shipping volume to grow annually at five to seven percent for a total increase of 20% by 2018, with cross-border ecommerce as a major driver.
This increased demand has led to greater service options from an expanding number of global, national, and regional carriers. However, managing multiple carriers and shipping goods across international borders can also create new challenges and increased complexity for service providers.
In addition, consumer expectations are pushing retailers to deliver more value, from improved experiences and lower costs, to faster delivery speeds.
Direct-to-Consumer Challenge: Parcel Delivery Cost
A recent consumer study from the International Post Corporation found that, when asked about the important factors for making delivery choices, four of the top six responses were related to cost and, more specifically, saving money. In the top six were: clear information about delivery charges before purchase (92%); free delivery on purchases over a particular value (86%); free returns (86%); and landed cost calculator at check-out (79%). The other two were: simple and reliable returns process (88%); and rapid response customer service (83%), which are also important to the parcel management process.
Frankly, there is no such thing as free shipping, but managing processing costs to optimize what we can control in order to meet consumers’ expectations becomes even more important for every operation.
Direct-to-Consumer Challenge: The Need for Speed
The 2016 Consumer Expectations Study from IBM found 72% of consumers now consider the availability of two-day delivery important when choosing whether or not to make an online or mobile purchase.
This can be attributed to the “Prime effect,” which has reset the bar for what consumers expect in terms of delivery. And whether streaming a video or sending a text, consumers demand speed and expect instant gratification. Slow logistic processes that take days to even start the parcel journey can have detrimental effects on the overall customer experience.
This is where technology can help expedite and ensure that parcels are moving as quickly as possible and are tracked along the way. API technologies are crucial as they can facilitate the customs process, calculation of currency conversions, tracking, and even geodata (address and location-based information), which can be incorporated into everyday applications, business processes, and workflows.
Plus, rich data analytics and insights can help retailers provide better service around tracking, arrival time expectation, and overall delivery guarantee.
Direct-to-Consumer Challenge: The End-to-End Consumer Experience
While cost and speed clearly factor into the parcel delivery process, the logistics team is now an integral part of the whole shopping journey. Shoppers now expect a clear line of sight on costs and delivery times, as well as options on returns. When it comes to returning unwanted purchases, a recent study revealed 65% of global consumers will use a pre-paid shipping label, and 66% will return packages in-store. While nearly one-fifth of consumers (19%) said they would always or often choose to make returns in store, more than half of consumers (57%) did not return a package because it was either too inconvenient for them or they didn’t understand how to do so. (Source: Pitney Bowes 2016 Global Online Shopping Survey).
What can you do?
- Create bridges between existing systems. It is often not feasible to fix the whole company or completely rip and replace systems fast enough. API technology can help quickly connect the dots between existing systems.
- Look to partners to help accelerate. Find technology partners and experts who can help you bridge the gaps faster than you can yourself. What we do at Pitney Bowes is focus every day to support the ever growing complexity of commerce through technology, experience and insight.
- Design "customer-back." No matter how hard it is to execute, if you don't start with what customers want, you will lose them.
Smart companies facing increasing parcel volumes must take a close look at consumer needs, technology, compliance and logistics in order to best manage the increase and create a seamless experience for customers. And giving a parcel management professional a seat at the table has become more important than ever.
Rajeeb Mohapatra is Senior Vice President, Global Ecommerce at Pitney Bowes. He holds an MBA from Duke University's The Fuqua School of Business. He has extensive experience with e-commerce strategies gleaned from both his experience at Pitney Bowes and his prior positions at Office Depot.