Consumers’ mindsets have changed. Have yours?
Many businesses have tried to bring outdated modes of thinking into their current parcel delivery strategy and failed. Are you guilty of any of these misconceptions?
1) Millennials are the only group online shopping, so that is who I need to care about. In 2016, we surveyed online shoppers in the US and found that online shopping is cross-generational. Generationally, the breakdown of domestic online shoppers is: 95% millennials (18-35), 96% Gen-Xers (36-51) and 91% baby boomers (52-70). For retailers abroad, age makes a critical difference when targeting US online shoppers. Millennials are more likely to do cross border shopping than their older peers (65% of millennials compared to 41% of Gen-Xers and 33% of baby boomers).
2) Solving my freight issues is where I need to spend my time and energy. The last mile to the consumer is the lifeline of the supply chain process and sometimes the hardest to solve. With increased parcel volumes, businesses need to focus on developing the last mile of the supply chain. Parcel shipping continues to move toward an upward trajectory with more than 31 billion parcels shipped in 2015 and is expected to accelerate from 2.9% growth in 2015 to five to seven percent through 2018. That will represent a 20% increase over last year’s volume in 2018 (Pitney Bowes Parcel Shipping Index). The growth in parcel shipping is having a profound effect on businesses. Increased demand has led to greater service options from an expanding number of global, national and regional carriers.
3) I have trust issues with (fill in the blank – USPS, FedEx, UPS…). Every business has strengths and weaknesses. That’s why approaching your delivery with a multi-carrier solution is a must for any distribution operation. Carriers and their offerings have evolved significantly in just the last year. So if you have not looked at USPS because of an experience 10 years ago, you may be missing out on an important option for your organization.
4) Viewing the world inside-out has worked in the past. Retailers are evolving with external market inputs to constantly optimize item sourcing, multi-channel order capture, inventory strategy, fulfilment and delivery. This is a place data services and insights play a critical role. Understanding the “who, what, when and how” helps you move ahead.
5) I know my inventory…but who else needs to know. Your customer expects to know. In a 2012 Wall Street Journal article, a senior executive at Macy’s once said, “We’ve spent the last 153 years building warehouses… We just called them stores.” This is even more important now given that retailers are trying to fulfill physical and online purchases, including satisfying the need from ship-from-store, pick-up from store, curb side pickup and same day delivery promise etc. The physical store and the e-commerce experience has merged into one. Consumers still want to touch and feel products, but they may be in-store and browsing on mobile at the same time.
Shifting your legacy thinking from one mindset to include ship-to-store and ship-from-store options is not without challenges from store allocation, footprint and processes. Are sales associates trained to manage the shipping process? Are they following the same rules that you would use in your operations? Digitization and usage of smart software solutions can help create a consistent ship process (carrier selection and interaction) as well as global shipment tracking/reporting and delivery notification so you are not in the dark and at the mercy of a sales associate not understanding the best choice or not doing the best job.
Some things stay the same
The foundational elements of any good shipping operation -- consistency, accuracy and precision – are still paramount today. The difference is that consumers want choice and some changes in mindset can help you in this new world. Consider:
- Removing carrier branding from consumer view so that you can decide the best choice of carrier
- Allowing consumers to choose in terms of transit times, not carriers
- Implementing an online shipping platform for parcel carriers
- Shopping for the best option within the delivery SLA
- Adding USPS (with discounts) for cost, convenience, and performance
Don’t let an outdated mindset of how things used to be hold you back. There is a lot of goodness in being a consumer-focused operation from achieving better results for your business to building a stronger team. Take a moment to reflect on your best practices and possibly dated thinking and embrace how you can move forward.
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.