With the 2021 peak season now over, retailers saw a massive bump in spending. According to TechCrunch, U.S. retailers experienced a 21% increase in their 2021 Black Friday sales, and mid-October data indicated sales would amass nearly $1 trillion, INC.com reported. Such data gives rise to a year-over-year growth rate near 10%. Continuing disruptions around the globe will further stimulate more interest and demand for e-commerce. Meanwhile, TechCrunch explained how such disruption would coincide with greater demand for internet-based, live shopping experiences. "Thanks to a combination of faster internet, the boom in live video, and the rise of influencers, live shopping is becoming a major (if not a primary) channel for avid shoppers." As a result, the small retail e-commerce strategy needs to evolve. Here are ten best practices for shippers to thrive in small e-commerce through 2022 and beyond.
An effective small retail e-commerce strategy must begin with flexible and diverse payment and shipping options. Today's consumers are well-versed in the ideals of finding a deal. Strict, rigid shipping and payment processes will inevitably lead to the alienation of large swaths of your customer base. However, transportation capacity is rapidly approaching a breaking point, driving rates higher than they've ever been. Therefore, shippers need to prioritize the expansion of payment and shipping options.
Another facet of an effective small retail e-commerce strategy is easier to understand and revolves around loyalty programs. Loyalty or rewards programs, such as Amazon Prime or Walmart+, encourage consumers to continue shopping with a given retailer. The same tactics employed by these mega-giants are helpful for small retail e-commerce as well. Offering better discounts on worthy purchases and using data to know when to grant such deals is a top way small and midsize businesses can stay competitive.
In the world of e-commerce, online presence is everything. Small retailers need to leverage social media to increase their brand awareness. An active online presence is an absolute necessity for new and upcoming companies. Still, it is equally important for companies that have traditionally maintained a linear supply chain, relying on brick-and-mortar stores. Also, social media is an excellent way to expand the customer base and meet new and exciting business contacts that will help your business grow.
Along those same lines, any small retail e-commerce strategy should also diversify the transportation network's location. Expanding your network through third-party logistics partnerships is the easiest way to achieve diversification. Such partnerships immediately provide a lifeline of capacity and service. Meanwhile, the very standards behind a 3PL are rapidly evolving, creating a new brand of entities known as 4PLs and 5PLs. The premise is still the same, providing service and capacity across different skill sets to help shippers move more e-commerce freight, doing it faster and more cost-effectively too.
Diversification also implies working with new local parcel carriers that can work together to create a national footprint. It may take some extra legwork to implement, but working with more local carriers expands your carrier capacity and helps to accommodate sudden surges in demand in e-commerce effectively.
In the world of e-commerce, shippers may fall victim to a common misconception. While e-commerce relies heavily on parcel to operate, it is not relegated solely to parcel shipping. All modes are still on the table. However, the trick is knowing when to leverage one mode over another. Zone skipping can become an important facet of an effective small retail e-commerce strategy. Using data analytics, shippers can identify opportunistic shipments that will arrive within the same timeframe as parcels but that will travel by ground. The result effectively reduces the total cost of air freight and helps companies find capacity across multiple modes.
Small retail e-commerce strategy also benefits from continuous carrier optimization. As e-commerce continues to increase in demand, your shipping volumes will likely increase as well, and knowing where your discount brackets are can help optimize your network mix to achieve the highest earned discounts possible. Carrier optimization simply means knowing when to initiate new RFPs for many bids or annual contracts based on data. Leveraging such information helps shippers keep an eye on total contract costs while considering changes within the market.
Near to conducting new RFPs or mini bids, shippers should also track the performance of the transportation network partners. It is essential to recognize when carriers experience pickups in the delivery process. Some events, such as peak season, will push deliveries outward. However, knowing which carriers have excellent on-time, in-full rates and which charge more will help shippers ensure the just-right carrier delivers their shipments. That also helps to reduce total transportation spend and maintain optimum throughput.
Another critical concern in building and implementing a small retail e-commerce strategy involves managing both the inbound side of logistics and the outbound. E-commerce vendors need to know when freight will arrive, what condition it will be in, what type of equipment may be necessary, and when that freight can be sent out to consumers to stay effective. In other words, small retailers need to implement a vendor compliance program. Such a program is typical of an inbound freight routing guide, which specifies all requirements for paperwork, equipment, carrier utilization, and other activities within the inbound freight flow. In addition, such programs will inherently link to tracking the performance of those carriers to help shippers continuously improve their transportation network capabilities.
Of course, vendor compliance programs can be highly digital, relying on integrations between the transportation management system and analytics platforms. The secret to success in a vendor compliance program is ensuring that the carrier scorecard, comparable to a report card for each carrier, is updated with real-time insights and information. As a result, integrations throughout your entire supply chain tech stack are critical to maximizing the use and efficacy of your vendor compliance program implementation.
Another way to exemplify a small retail e-commerce strategy is to make improvements that are not necessarily associated with actual transportation. For example, while not necessarily true transit, managing the dock and the yard can dramatically affect your ability to accept or send shipments to and from your facilities. Shippers need to ensure their dock scheduling software considers the real-time updates and changes affecting deliveries and pickups.
Using data to manage congestion and expected wait times within the yard will also go a long way toward reducing total landed spend. After all, unexpected delays on the dock and yard are the first signs of potential risk for dwell time and detention charges.
Rounding out this list of the top ways to improve the small retail e-commerce strategy involves payment processes. As mentioned earlier, a diverse group of payment processes is integral to maintaining this customer base. Today's customers have strict expectations for using traditional payments, credit cards, and digital wallets. Integrating these systems is critical to ensuring your company does not alienate part of the customer base. However, diversification of payment processes is not limited solely to the consumer side of the transaction.
Carriers expect a quality payment process. Yes, there was a time when a typical 30- to 90-day payment window would occur, and carriers had to simply hope for the best that the shippers' payments would arrive. However, such capabilities are often filled with risk and leave massive problems in carrier cash flow plans. This is especially true in markets like today. After all, a run on capacity amounts to carriers that can make more money, increasing the number of owner-operators driving on the roads. In turn, the available driver pool with typical, national carriers declines. And carriers inevitably find themselves in the position of needing a more effective and secure payment process.
That is where working with a company like Intelligent Audit is helpful. Remember that Intelligent Audit uses a secure, bank-based payment process that eliminates risks and helps to ensure carriers get paid on time and in full. In the end, happier, fully compensated carriers are more likely to accept those last-minute shipments that are inevitable in the world of e-commerce.
The best-laid plans for 2022 depend on historical and real-time data to make informed, meaningful decisions. Data-backed strategies are integral to the success of logistics and e-commerce in 2022, and as more disruptions come to light, shippers will inevitably need to evolve. Most importantly, creating data management systems and IT platforms in-house is expensive and time-consuming, but there is a solution. Companies like Intelligent Audit have a reputation for compiling and analyzing all the data from your full tech stack to turn raw information into powerful insights. Connect with an Intelligent Audit expert to learn how your team can turn the above small retail e-commerce strategy best practices into action now.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
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