The holiday season is a time of organised chaos for the logistics industry. The huge increase in consumer spending at this time of year is essential for many retailers to balance the books, but with the advent of ecommerce and omni-channel fulfillment logistics challenges have become far more complex. Ensuring stock is available in brick-and-mortar stores via bulk shipments now constitutes just a tiny fraction of the goods deliveries being made today, as instead millions of items a day are shipped directly to consumers at home, offices or other localised collection points.
Expectations of deliveries have also increased, with next- or even same-day delivery almost becoming the de-facto standard. Some organisations, such as online retailer ASOS, have even gone so far as to offer same-day returns, adding additional reverse logistics complications. In today’s global economy, distance is not seen as an obstacle by consumers, with single items shipping half-way across the world to arrive at your front door 24hrs later.
All these complications and raised expectations put significant pressure on profit margins, but this is exacerbated during the holiday season by the need to swiftly scale operations and capacity over a limited period to meet demand. Only the most agile, innovative and forward-thinking companies will succeed in such a competitive market at the busiest time of year, but how can logistics providers go about ensuring that we all get what we asked for in time for the big day?
Demand Forecasting
Planning ahead is of course crucial to ensuring that partner and customer expectations are met during the holiday season. As logistics companies are responsible for the last mile of the consumer experience, they are also responsible for upholding the reputation and brand integrity of the retail partners that they provide a service for.
Understanding in advance how heavy the workload is likely to be is necessary to enable sufficient resources to be put in place to meet the increased demand over the holidays. Analysing historical sales and shipping data provides a first step, but as demand fluctuates year-on-year and consumers increasingly purchase products via ecommerce channels it becomes more important to also analyse the growth of the online market. Predictive modelling techniques can utilise data from a range of sources including the unstructured data to be found across social media channels, which can be used to gain insight into how and where customers are likely to make their purchases.
Route Optimisation
As technology has – so far – failed to provide us with flying reindeer to help avoid congestion on the roads, particularly in urban areas delivery routes and schedules need to be as efficient as possible to make sure that every package reaches the right place at the right time.
Late or missed deliveries have a huge impact on both the image and reputation of retail partners as well as the profit margins of logistics providers. Planning delivery routes in advance is the first step to ensuring that everything goes as smoothly as possible, but inevitably unforeseen challenges will crop up when vehicles are already en-route. The ability to analyse traffic data in real-time and feed this information to drivers can be a great help in making sure SLAs are met. With the right software, routes can be automatically updated to provide the quickest route from A to B without drivers needing to rely on a personal, intimate knowledge of the area. Weather can also have a big impact on delivery performance so tapping into the most up-to-date forecasts and adjusting routes or timetables can be a great help in improving performance.
Shipment Tracking
As customers, we’re an increasingly demanding bunch and require that our items be delivered at a time and place that suits us, without us having to block out a whole, or even half a day to wait around the house for our gifts to be delivered.
Enabling shipment tracking is not just crucial for the business to maintain visibility over the fleet, but also for enhancing the customer experience and enabling real-time information on the status of deliveries. Providing customers with as narrow a window as possible for each individual delivery can go a long way to increasing consumer satisfaction, upholding brand integrity and increasing customer loyalty for the future. The information may be delivered via an online portal, though as this still requires action from the customer sending a good old-fashioned text message may be the better choice. This service may also need to be integrated with retail partners systems to provide the most accurate and seamless experience for the customer.
In short, it’s all about planning ahead to ensure both the best experience possible for the customer and consequently, the largest profit margin for the logistics provider. The seasonal period can be make-or-break for many businesses so effective planning is essential to make sure that next year, your organisation is still around and continuing to deliver happiness and good cheer to us all.