Bringg CEO Guy Bloch was among the industry leaders in attendance. After a packed few days of meetings with senior executives and speaker sessions, Bloch shared his biggest takeaways. His insights are also supported by other thought executives who spoke at the event.

Ultimately, Bloch’s reflections offer retailers a quick-but-potent prescription on what they should be thinking about this year to see last-mile success.

Key takeaway: “Better together”

• Businesses will form strategic partnerships and concentrate on their core strengths to create an interconnected ecosystem that improves last-mile fulfillment and customer experience.

The most popular topics at NRF 2025

Between the more than 175 speaker sessions and countless peer-to-peer conversations, a huge variety of important last-mile topics were discussed at NRF. Bloch outlined the three topics he found most vital across his time at the event.

Topic 1: Partnerships and ecosystem collaboration

“A recurring theme was the shift toward a ‘better together’ mindset,” said Bloch. “Companies are increasingly focusing on their core strengths and building partnerships to fill gaps in areas where they lack expertise—whether in last-mile delivery, fulfillment, customer experience, and more. This collaborative approach is driving a more interconnected ecosystem, where technology providers, retailers, and logistics partners work together to deliver value.”

“The retail ecosystem thrives when it works together.”

Topic 2: The return to core competencies

“After two years of internal adjustments—including reorganizations, revived teams, and recalibrated strategies—companies are returning to their core competencies while innovating to propel the digital transformation of retail,” said Bloch. “The emphasis is on creating sustainable, scalable solutions that drive operational efficiency and customer loyalty.”

Topic 3: AI and automation in last-mile delivery

“Retailers and technology providers are doubling down on AI-driven innovations to optimize the last-mile delivery experiences,” said Bloch. “This includes smarter routing, predictive demand planning, and enhanced delivery orchestration to meet customer expectations for speed and reliability.”

Levi Strauss & Co. was represented at the event by Chief Digital Officer Jason Gowans, who spoke on a panel with executives from Ralph Lauren and Starbucks. Gowans shared details of how Levi’s is using AI in a new platform called BackPocket, which gives in-store associates a 360-degree view of the shopper across all channels. The AI-driven solution helps associates quickly personalize the customer experience all the way down to determining the most convenient delivery method if a particular product isn’t in the store.

AI investments are also happening faster than ever in retail according to Joe Austin, VP of solutions architecture at Comcast Business.

“When decision-makers make a decision, they’re ready to move,” Austin commented during the conference. “Before in retail, we would see a decision-maker want to implement a new technology, and they were okay with a 12- to 18-month rollout, especially major nationwide, large retailers. Now when those CIOs are making that decision and they want to bring in the latest AI technology, they want it implemented tomorrow, and they’re ready to invest and they’re ready to grow.”

The biggest learning: Collaboration will be key

The last two years have been about adapting to the new economy. But Bloch said the learning from NRF 2025 is clear: “The industry is now pivoting to growth through collaboration and targeted innovation.”

“Companies are more willing to share components of the value chain where they lack strengths, ensuring better outcomes for everyone,” Bloch continued. “This collaborative mindset—paired with an accelerated focus on the last mile—shows that the retail ecosystem thrives when it works together.”

Ellen Svanström, chief digital information officer with H&M, echoed the need for partnerships during a panel discussion with leaders from Qurate Retail Group and Tapestry. She said partnerships and industry collaboration will be vital to keep up with the rapid pace of technological and customer changes.

“No single player can succeed alone in this rapidly evolving market.”

The universal appreciation for partnerships this year

When asked what takeaway from the event he found most surprising, Bloch  doubled-down on the excitement around “the universal acknowledgment that no single player can succeed alone in this rapidly evolving market.”

He said, “Even the largest retailers are embracing partnerships, combining their strengths with technology providers and delivery networks to build hybrid, scalable solutions. This openness to collaboration signals a profound shift in the market and highlights how the last mile is becoming a shared strategic priority across the ecosystem.”

More retail collaboration means there will be more opportunities to guarantee customer satisfaction in the last mile. By working together, retailers will ensure that products are delivered on time and in excellent condition, leading to a positive customer experience. This increased satisfaction not only fosters loyalty among existing customers but also incentivizes them to become repeat buyers, generating greater revenue and long-term success for retailers.

A collaborative approach among retailers will also optimize delivery routes, reduce shipping costs, and diversify delivery options like same-day or scheduled delivery. By sharing resources and expertise, retailers can create a more efficient and sustainable last-mile delivery network that benefits both businesses and consumers.

Read Bringg’s State of the Last Mile report to access even more 2025 delivery insights

The post Retail’s New Mantra: The Future Is “Better together”—Insights from NRF 2025 appeared first on Bringg.

Because of its complexity, the last mile is a key proving ground for revenue, logistic efficiency, and customer loyalty. Last mile operations highlight whether retailers and LSPs invested in the right technology to balance their supply chain and cost challenges with customer satisfaction strategies (which are often at odds).

Bringg uncovered details of how well retailers and LSPs are performing in the last mile. The State of the Last Mile: Challenges, Insights, and Implications surfaces survey results from 500 director-level professionals in the U.S. and U.K. The leaders shared the last-mile challenges, wins, and investments they experienced in 2024 as well as what their strategies are for 2025.

The key findings were clear: Continuous last-mile improvement isn’t a differentiator, it’s an imperative.

1. The last-mile directly impacts cart conversion, customer loyalty, and customer lifetime value.
2. Despite being the hardest last mile element, 82% of enterprise retailers plan to invest in more 3PLs.
3. Retailers are investing in solutions like last-mile orchestration, AI automation, same-day delivery to stay competitive and cost effective in 2025.

The full report has over 20 pages of statistics and insights. Some of the biggest findings are summarized below but be sure to explore the full report to see much more.

The last mile impacts customer loyalty

Last-mile deliveries are a crucial step in the supply chain because of how closely they’re tied to the overall shopping experience: 65% of consumers will abandon a retailer after two to three late deliveries. Unfulfilled delivery promises and missed expectations quickly erode customer trust and lead to lost sales.

Survey respondents agreed. In fact, 75% stated that the delivery experience directly impacts:

• Cart conversion
• Customer loyalty
• Lifetime value

This was also demonstrated through online cart abandonment. Three of the biggest causes for failed checkouts are delivery-related:

1. Delivery costs are too expensive
2. Checkout process is too long or complicated
3. Lack of delivery options

Retailers also said the number one reason they lost customers was because their competitors offered more delivery options.

The costs and benefits of 3PLs

Working with 3PLs unlocks greater operational efficiency for many businesses but the wins come at a cost.

The number one last-mile challenge across respondents was “working with multiple carriers.” Why? There’s less control and it’s difficult to “maintain consistent customer experiences” across multiple operators.

And yet, two-thirds of retailers use 3PLs for more than 50% of all their deliveries. More specifically, 82% of enterprise retailers said their 3PL investments will either stay the same or increase in 2025. There’s good reason for the increased investment: 48% of businesses said 3PLs improve their delivery times.

The reality is that 3PLs are a necessary investment for business scalability. Retailers use 3PLs to regionalize fleets for faster delivery times because it’s more cost-effective than investing in their own fleets.

ACCESS BRINGG’S 2025 STATE OF THE LAST MILE REPORT

The biggest last-mile investments

Consumer preferences, business demands, and last mile technology continues to evolve. Businesses that want to stay competitive should grow alongside those elements—well-planned technology investments are fundamental to this evolution. However, there are often significant last-mile investment barriers to overcome for many companies:

• 40% said business requirements are hard to define
• 35% said measuring ROI is difficult
• 35% said costs are too high

New last-mile tech investments are most impactful when they’re shaped around well-defined business needs. Without a clear roadmap, new solutions add complexity rather than streamline operations.

The companies that did adopt new technology in 2024 invested most in:

• Last-mile orchestration and management tools
• Digitization tools to automate operations
• AI technology to personalize the customer experience

Major eCommerce players like Amazon and Walmart set customer expectations for more efficient and flexible delivery options—and those expectations aren’t likely to change anytime soon. So retailers are continually investing in new or expanding last-mile capabilities in 2025. For example:

• 60% will invest in same-day delivery
• 31% will invest in express delivery
• 21% will invest in curbside pickup

Effective digitization and last-mile delivery investments can increase efficiency, reduce costs, and improve customer satisfaction.

However, in order to achieve wins at the customer’s door, leaders have to ask themselves:

• How fragmented are current last-mile operations?
• What real-time insights are missing from existing visibility tools?
• How can AI and ML improve both efficiency and personalization?
• How should short-term ROI and long-term scalability be balanced?

Businesses manage a great deal during the last mile. The leaders who continue to invest in the last-mile strategies that meet the needs of their business and their customers will be the winners across this make-or-break delivery stage.

Explore the full “State of the Last Mile” report

The insights collected here are only about 50% of what’s present in Bringg’s full State of the Last Mile report. Access the full report to learn:

• The top reasons retailers lose customers
• The percent of big and bulky, grocery, and apparel retailers increasing or maintaining 3PL investments
• How to balance 3PLs investment while maintaining brand experience and efficiency
• The full list of last-mile technology investments focused on operational efficiency
• Additional metrics around the biggest barriers to technology adoption

ACCESS BRINGG’S 2025 STATE OF THE LAST MILE REPORT

The post The State of the Last Mile Summary: Key Insights from 500 Retail and Logistics Leaders appeared first on Bringg.

This piece serves two purposes. First, it summarizes some of the biggest insights from Gartner’s report—outlining shopper expectations as well as business last-mile priorities in 2025 and beyond. Second, the article surfaces Bringg‘s analysis of the Market Guide’s reporting—giving shippers details on what the data means, why these insights are important, and how they can take advantage of the information.

Key Takeaways:

• “Organizations consider last-mile speed and reliability as most important, but need the least improvement”
• Businesses ranked their top three improvement priorities across the supply chain as: business innovation, productivity, customer service
• When weighing a new last-mile investment, “Define your business strategy, planning, and timeline to ensure that vendors can grow with changing business needs, including those related to functional and geographic coverage,” wrote Gartner
• A holistic last-mile approach requires integrating customer priorities with core business objectives

Defining last-mile delivery and its capabilities

Gartner defines last-mile delivery technology based on three key principles.

• “Last-mile delivery (LMD) technology solutions are specialized, customer-centric transportation management solutions that focus on managing the delivery process by which a consumer receives the products they order online.”
• “LMD supports internal and external fleets, providing access to carrier networks for non-asset-based shippers. They also provide customer-engagement capabilities, providing a digitized experience to a shipper’s customer that allows end consumers to route, book, track and communicate changes to their shipments through a digital channel.”
• “LMD solutions focus on the orchestration of the delivery of products, considering more than just different fleet options, such as owned fleet versus outsourced fleets. They also focus on providing enhanced customer experience capabilities to the recipient of the goods.”

There are also a wide range of capabilities mentioned in the report that last-mile solutions offer retailers and shippers in this vital delivery stage:

• “Internal fleet versus external fleet selection based optimal outcomes”
• “Route optimization for companies using their own fleets”
• “Access to external carrier networks through APIs”
• “Customer web portal branding capabilities”
• “Visibility and live order tracking”

Where businesses need to do better for customers

It’s no secret that many shoppers want their shipping experiences to rival Amazon’s. However, most companies don’t have inventory spread across hundreds of warehouses and tens of thousands of employees to sort, pick, and ship stock. They also lack the technology infrastructure to mirror the delivery giant’s quick and transparent operations.

Gartner asked logistics operators to outline the investments they needed to make to keep up with customer demand: “According to the 2023 Gartner Last-Mile Operations and Customer Expectations Survey, speed (90%) and reliability (85%) are by far the aspects of last-mile operations that organizations considered as most important.

“However, the same study also showed that, when it comes to meeting customer expectations, organizations need the most improvement in areas such as flexibility, supplier diversity, visibility and sustainability.”

It also reported, “LMD vendors are increasingly putting more development efforts in extending their carrier library and connectivity options, providing more flexibility and service options to shippers.”

Retail and logistics industries made great strides in speed and reliability to keep up with consumer expectations set by companies like Amazon and Walmart.

However, what’s the cost of these efforts? For example, pushing for more speed and reliability may reduce carrier or delivery window options.

According to Gartner, “LMD vendors are increasingly putting more development efforts in extending their carrier library and connectivity options.”

Bringg’s analysis: Three of the four improvement areas—greater flexibility, supplier variability, and visibility for their teams and customers—fall under the umbrella of operational efficiency. It’s clear that as consumer expectations continue to increase, shippers have to improve these core capabilities.

They should address these challenges not only for their customers but for their businesses overall. The retailers and shippers that don’t meet these operational demands could experience higher costs and/or lower productivity than they would if they made a few savvy last-mile investments to improve performance.

How experimentation meets major business priorities

Gartner’s survey respondents pointed to three primary areas of business-level improvement: business innovation, greater productivity, and improving the customer experience.

Gartner also outlined specific tactics retailers and shippers use to stay competitive among those top three priorities:

• Smaller parcel shipments: Improve packaging utilization and parsing orders to take advantage of lower shipping rates
• The expansion of micro-fulfillment: Regionalize specific inventory to shorten delivery times and costs
• Measuring customer satisfaction: Use analytics to pull insights from reviews, returns, and other customer data
• New fulfillment methods: Invest in “green delivery,” pickup in store, and locker pickup

Bringg’s analysis: Any of the above tactics, and many not listed, could be considered “business innovations” or experimentations if a company doesn’t already employ them. When successful, these innovations lead to greater productivity for the business and customer experiences that consumers want. We believe the first business priorities Gartner uncovered can optimize the second two.

Everything is connected.

All this means that many companies will test new strategies with last-mile technologies in 2025 and beyond. The savviest retailers and shippers will satisfy business and customer needs with a few great infrastructure innovations (or maybe even one).

Reciprocal relationships across the last-mile

Bringg’s analysis: Retailers and logistics service providers (LSPs) across the last-mile landscape shouldn’t separate customer priorities from business priorities. Again, everything is connected.

“These are not standalone goals—they are deeply interconnected,” said Bringg CEO Guy Bloch. “True innovation drives efficiency while enhancing customer satisfaction. It’s not always about massive transformations; sometimes, the most meaningful progress comes from pragmatic, impactful changes that elevate operations and experiences simultaneously.”

The changing last-mile priorities for both consumers and businesses also impact the features that last-mile technology providers build.

“The expansion of micro fulfillment is having an impact on LMD vendors’ roadmaps, as more vendors are starting to include inventory visibility and management capabilities in their solutions to help optimize routing and carrier/fleet selection decisions,” Gartner wrote.

The savviest retailers and shippers will satisfy business and customer needs with a few great infrastructure innovations (or maybe even one).

This cooperation is rooted in consumer calls for greater sustainability.

“Sustainability demands are increasing from consumers and brands, impacting the roadmap of LMD vendors,” wrote Gartner. “The selection of carriers and other capabilities embedded in the delivery orchestration engine allows shippers to establish new service models based on sustainable delivery options.”

Important strategies to prepare for 2025 and beyond

There are myriad factors to weigh when considering new last-mile technology investments. Several of the key recommendations by Gartner provide a framework for retailers in search of new solutions and partners.

• “Define your business strategy, planning and timeline to ensure that vendors can grow with changing business needs, including those related to functional and geographic coverage.”
• Specify the functional areas to include, such as: delivery orchestration, fleet optimization, customer experience, post-purchase delivery capabilities, advanced analytics, and warehouse management.
• “Start with vendors that address your industry and geography. This will increase the possibility of a good functional match, adherence to local requirements and a network of logistics providers that are in your supply chain network.”
• “Determine company preference for SaaS and cloud versus an on-premises solution because many vendors have only one or the other…involve IT in these discussions.”
• “Evaluate the vendor’s ability to provide integration to other applications, such as ERP, DOM, TMS or WMS solutions.”
• “Assess the capacity of the vendor to offer consulting and implementation services that go beyond the software capabilities of the product.”

Bringg’s Analysis: The last mile is the most critical part of the supply chain now. This report shows that retailers and LSPs need effective last-mile solutions to keep up with consumer expectations. Older, home-grown solutions won’t work because they aren’t built for today’s environment. Luckily, last-mile technology is evolving just as quickly as consumer expectations and business priorities across the supply chain. And more retailers and logistics service providers are adopting last-mile technology to keep up with all the changes.

Designing a solution that addresses all the variables discussed here will be instrumental for retailers and shippers as last mile evolutions continue across 2025. The businesses that first connect their customer priorities with their business goals will have the clearest vision to outline the specific tech they need. From there, these companies can experiment with their new capabilities and refine them until they’ve got a winning strategy.

So who has the best chance to succeed this year? Businesses that invest in solutions that simultaneously address great customer experiences, operational efficiencies and cost reductions. Missing the mark in any of these areas could mean losing customers, less productivity or going over budget—all of which can impact market positioning.

With a market that changes so quickly, organizations can’t afford to be the last innovators in the race across the last mile.

Disclaimer: Gartner does not endorse any vendor, product or service depicted in its research publications and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Gartner, Market Guide for Last-Mile Delivery Technology Solutions, 18 June 2024, Oscar Sanchez Duran, et.al.

GARTNER is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Bringg.

The post Key findings from the Gartner Market Guide for Last-Mile Solutions appeared first on Bringg.

If there’s anything this year has taught us, it’s the challenge of making any supply chain and delivery predictions in such a dynamic economic and political environment. 

Increases in fuel, disruptions in supply chain, and increased labor costs have severely impacted retailers’ margins. It has also contributed to a cycle of inflation over the last few years that includes a jump from 1.2% in 2020 to 4.7% in 2021. It’s getting even worse with the International Monetary Fund predicting a worldwide inflation rate of 8.8% in 2022.

These factors are influencing both businesses and consumer behavior. On the consumer side, higher prices and erosion of real wages by an average of 8.5%, have led to less overall spending and an increase in online shoppers looking only for deep discounts and special offers.

The flip side for retailers is learning how to cope with increased competition, supply chain uncertainty, higher delivery costs and shrinking margins  – all while still trying to satisfy consumers’ desire for low prices, omnichannel delivery options and a smooth customer experience.

Larger retailers such as Macy’s and Walmart are better equipped to weather the storm caused by lower sales growth and lower prices. For other retailers, however, it’s significantly more challenging.

According to a report from Alignable, due to a significant decrease in orders, labor shortages and supply chain uncertainty, 59% of small retailers  could be shutting down over the next year. 

With that background in mind, here are the top 8 delivery and supply chain trends that retailers should prepare for in 2023.

Now that we’ve covered the list of delivery and supply chain challenges, let’s take a look at each one and see how supply chain leaders in retail can best prepare themselves for the coming year and beyond.

Supply chain disruptions: rising supply chain and delivery costs

Inflationary trends are influencing the world economy and directly impacting supply chain and delivery operations. Rising fuel prices is a good example of direct supply chain disruption, as well as manpower shortages which have led to higher labor costs with lower productivity.

This combination of less consumer spending,  inflation and higher delivery costs are hitting retailers where it hurts most – in the bottom line. 

When considering that the last mile represents 53% of total shipping costs, it means that retailers who want to increase efficiencies and cut costs should be focusing on their last mile delivery operations.

A recent report from Gartner suggests that more companies need to make sure their fulfillment offerings are as cost-effective as possible by leveraging the latest technologies available in leading delivery management solutions.

Difficulty in retaining customer loyalty

Retailers are now looking for tech solutions that can save on delivery costs, while finding the best way to serve customers on a limited budget.

While the old adage that the “customer is king” may still be true, retailers cannot ignore that the pandemic induced hyper growth phase of eCommerce has passed. 

Now that growth has slowed and margins are tight, many retailers find themselves guided by keeping a lid on costs rather than pleasing customers no matter the cost.

Today, retailers must take a good look at providing the best possible service while increasing operational efficiency.  This has resulted in a shift of priorities when selecting delivery management platforms: from consumer experience and customer service, to cost optimization. 

Customer expectations increased significantly over the past few years, meaning retailers need to offer multiple delivery options including next day or even same day delivery, in-store pickup, remote and curb-side collection, and free parcel shipping to satisfy their customers. 

These options are part of the fulfillment strategies that retailers are using to maintain customer loyalty and cut last mile delivery costs.  

In the past, retailers presented these choices as a response to the sharp increase in eCommerce volume and rising  consumer expectations. This resulted in building their fulfillment options portfolio and enhancing the customer experience. 

The same options are being offered today with the primary goal of cost savings, while trying to balance customer expectations with cost cutting measures.

However, these different delivery options require more flexible fulfillment operations and inventory management – for example, ship from store (to get inventory closer to the customer) and supplier drop-ship fulfillment.

Acceptance of managing complex operations

Meeting the challenges mentioned above requires more than simple solutions. They require agility, and creating more agile supply chains and operations often starts with new technology.

One example is to automate procedures like routing, something which most companies have already done to some degree. 

However, effective  route optimization software needs to factor in many variables such as vehicle type, driver availability, traffic, weather, parcel size and the list goes on and on. No one would think about  taking out a map, listening to the traffic report, watching the weather forecast and coming up with the best route.

New technology can handle the complexity of taking so many variables into consideration to come up with the most efficient route that keeps customers happy at the lowest possible cost.

But routing is one small drop in a much wider pool of technology that can solve operational challenges – from using crowdsourced delivery drivers to match capacity with demand, to expanding shipping carriers and selecting them based on the cost to deliver. 

Another example is finding creative solutions to the growing issue of returns. Retailers might not be able to fight the growth of returns, but they can manage returns better by pooling last mile delivery and returns management functions such as last mile delivery tracking, or using a delivery driver app to allow drivers to manage both deliveries and returns on the same route. 

With today’s trends of omnichannel delivery, collaboration with other retailers and diversification of delivery partners, complexity is growing every day. Forward thinking retailers should accept that we live in a complex world and concentrate on how to manage today’s complex systems rather than yearn for simple solutions that are not capable of doing the job.

Collaboration between retailers

As retailers try to mitigate supply chain disruption and last mile challenges, there is a growing trend of collaboration – even between online competitors. 

The large retailers are looking to increase growth by trying a new strategic approach to online business through collaboration in both fulfillment and last mile delivery, as well as supplementing inventory and product offerings.

There are a number of ways in which retailers can collaborate including

• In-store pickup
• Shared carts
• Cross-channel loyalty points
• Cross-channel returns

We can already see this collaboration in practice with Amazon’s Local selling program, where you can pick up your Amazon purchases at Sears, Best Buy, Focus Camera and others. Cross channel returns can be found in cellular communications, where T-Mobile accepts returns at any of its locations, regardless of where it was purchased online.

As new omnichannel fulfillment practices and collaboration become mainstream, the need for technology that enables retailers to manage all these options becomes critical. 

Diversification of delivery partners

Despite the economic situation and supply chain problems, eCommerce continues to grow at an impressive rate. The overall forecast is positive with eCommerce predicted to make up over 40% of all retail chain sales by 2026.

As the volume of shipments continues to grow, the ongoing demand for delivery carriers is exceeding supply. That’s why retailers need to diversify their carriers to ensure that their products are delivered on time, regardless of the geographic location. 

With the current shortage of qualified drivers, it’s important to work with multiple carriers and have a backup plan in place just in case they can’t deliver.

When optimizing delivery management, companies should focus on how they manage both fleets as a whole and the drivers individually.

Using multiple fleets allows companies greater flexibility in the delivery process, provides a backup solution for spillover or peak times and seasons, and creates supply chain partners that rely on one another for help along the way. 

While this may add complexity to delivery operations, for retailers who are deploying a delivery management platform, this is just one of many must-have features that can help their supply chains meet the challenges of the coming year.

Digital transformation

There is a movement to deploy advanced technologies that can unify supply chain technology from eCommerce to post-purchase experience, including the first, middle and last mile.  

Supply chain management trends are changing rapidly. In order to keep up, processes require automation, systems and data need to be integrated, workers need to have new resources, and managers need to have better supply chain visibility. All of this requires investment into a supply chain optimization platform that can do all of the above.

When researching such a system, retailers should focus on the needs of each key stakeholder in the company, as well as what can provide the consumer with the best possible online shopping experience.

It is important that whatever SCM technology businesses use, they need to make sure that it integrates with existing supply chain systems, from the TMS and WMS all the way down to inventory management and CRM systems. Robust, two-way data synchronization ensures that supply chain professionals keep all their technology solutions and physical resources aligned at all times.

Forecasting inventory and delivery needs

Last mile delivery volumes are rising, which is no surprise. But how can retailers and delivery services providers prepare for next year’s challenges? How can they know what to expect in terms of order demand, delivery processing and how and where to deal with inventory? 

There’s no reason to run the supply chain in the dark anymore. Supply chain managers should be using the latest available SCM technology to forecast inventory and delivery. 

Knowing what to expect and how to deal with it before the rush begins, is the best way to ensure profits despite shrinking margins. 

Leveraging today’s supply chain technology provides the opportunity for increasing visibility into supply chain data at resolution that has never been achievable before. 

Big data and predictive analytics are finally being used to provide insights which help anticipate, respond to and manage unexpected events or disruptions. 

Machine learning and artificial intelligence (AI) can turn supply chain data into assets for informing and improving business operations. Using logistics management software, companies can both plan in advance and forecast inventory and delivery issues as well as keep on top of real-time issues that come up along the way. 

Focusing on returns in supply chain management

With the number of online orders increasing, it’s only natural that returns will increase as well. eCommerce companies that want to stay on top of the latest supply chain trends must make sure that their supply chains can support returns management.

Customers want a simple and reliable return process. The issue is that the supply chain must be specifically designed to handle returns in large numbers, dealing with the inventory management and restocking matters and logistics costs behind each return.

Luckily, the supply chain tech available today allows for returns management to be automated and highly transparent for a better customer experience. This is part of the digitization and automation of the supply chain, one that allows all of the processes (including returns) to be digital. 

To maintain supply chain resilience in the face of unforeseen last mile and supply chain trends, retailers and other businesses must perform a supply chain management review, with a focus on their current return strategy and reverse logistics operations, and find areas for improvement.

This includes evaluating the technology used in each step and finding new solutions that can help automate and make the return part of the supply chain management run as smoothly and efficiently as possible.

Reducing environmental impact

Supply chains too often deal with a catch-22: the larger and more complex the supply chain, the worse its carbon footprint.  

Retail supply chains are the biggest producers of carbon emissions, responsible for over 50% of greenhouse gasses. 

Transportation is the major culprit, in tandem with demand surges in eCommerce. Recent research shows that by 2030, eCommerce growth will lead to over a 30% increase in delivery-related carbon emissions.   

Pressured by consumer expectations for sustainable delivery and regulatory requirements, many businesses are starting to lean on their last mile logistics providers to help them not only reduce carbon emissions, but also track, measure, and report on emissions reduction – and even help them convey their reduction in emissions to consumers. 

Embedding green logistics practices across the supply chain – particularly through sustainable eCommerce fulfillment options and delivery operations – will help supply chains reduce their carbon footprint, maintain a competitive advantage and even increase market share in 2023 going forwards.

Adoption of holistic delivery management platforms

Retailers must ensure that their fulfillment operations are run in the most cost-effective way possible, which can only be done using an advanced delivery management platform. More importantly, retailers need to take a holistic and portfolio view in evaluating profitability through a set of metrics that includes data on shopper frequency, cost of fulfillment, basket value and cost to serve. 

In order to create such a holistic view of fulfillment, and to optimize operations based on these parameters, integration between the various software related to supply chain management are required.

While the global supply chains seem to be getting out of control, retailers need to focus on last mile delivery and the technology platforms that provide a holistic solution covering both suppliers and consumers.

Customers want their orders quickly and transparently, knowing exactly where their order is, when it’s arriving and at any given time. The technology available today gives logistics companies the ability and opportunity to provide more visibility to all parties, no matter if they are delivering small packages, furniture, medical equipment. 

Retailers and delivery services companies come together as supply chain partners, focusing on creating the best last mile delivery experience possible.

Technology today is allowing companies to adapt to the market and deal with unexpected events. These may include traffic, routing issues, inability to deliver packages for a variety of reasons and more. 

Artificial intelligence, including machine learning are the underlying technologies that make this happen and will define the supply chain leaders in 2023.

Key Takeaways

For those retailers who can meet today’s challenges, there is positive news on the horizon and reasons to be optimistic about the future. According to the IMF, inflation is expected to fall to 4.1% by 2024. By all indications, eCommerce will continue to grow at a healthy pace for many years to come.

In addition all those new technologies and multiple fulfillment methods that were implemented to get through the tough times, translate into increased efficiency, more satisfied customers and increased profits once the economy gets rolling again.

Looking ahead

While global and local supply chains are still going through some upheavals, supply chain trends show that many business leaders are investing in delivery management platforms that can support new business models, and are capable of  keeping their supply chain operations and logistics operations running smoothly now and into the future.

The industry is changing and will continue to change in 2023 and beyond. As eCommerce continues to explode in popularity and the number of deliveries increases, brands that want to remain competitive will need to stay on top of global supply chain & delivery trends and adopt the technologies that can help them secure success now and in the years ahead.

The post 8 Delivery and Supply Chain Trends to Expect in 2023 appeared first on Bringg.

This post takes a closer look at the prevalence of surplus inventory, the roots of the problem, and what you can do about it.  

How did we get here?

During the pandemic, eCommerce growth was explosive. Getting reliable deliveries from suppliers might have been problematic, but increased demand from consumers ensured that surplus inventory was not a problem.

The recent economic downturn, however, along with inflation and currency fluctuations have hurt demand. Consumers are buying less, looking more for heavily discounted prices and demanding better buying experiences. 

Now, many retailers are faced with too much stock and grappling with how to handle it.

Excess inventory: a solution that turned into a problem

One way to manage an unpredictable supply chain is to order more than you need. The upside is that when customers come to your eCommerce site, you can carry hard-to-find items that would take months to find on other sites.

From that perspective, carrying excess inventory seems like a winning strategy to get the leg up on the competition. 

However, it also requires adequate customer demand to ensure proper inventory turnover.

While it may have started out as an effective strategy for ensuring customer satisfaction, recent disclosures by leading retailers show how it has morphed from a stop-gap solution into a serious problem.

According to S&P Capital IQ and FTI Consulting, retail inventories increased over 30% over last year, with leading retailers including Nike, Target and Hasbro revising their guidance and committing to reducing excess inventory levels. 

The consensus amongst industry analysts is that retailers have overcompensated for supply chain disruptions by ordering excess inventory.

As consumer demand drops off, retailers must take a more proactive approach to excess inventory management as the holiday peak season approaches.

What causes excess inventory?

Clearly retailers want to provide the best service for their online shoppers by having their most popular merchandise in stock. This is based both on historical data and projections for customer demand. The goal is to have enough stock availability to cover customer orders without carrying excess inventory. 

With increasing supply chain complexity and so many product offerings, inventory management software has become an essential tool for retailers who want to prevent excess stock and manage it efficiently. Companies who do not take advantage of the latest inventory and delivery management software will have a hard time handling their excess inventory challenges.

There are many reasons why retailers might unintentionally wind up with too much inventory of specific merchandise, but in general, the main reasons for surplus inventory include:

• Overpurchasing
• Inaccurate sales projections
• Product returns and canceled orders
• Negative economic conditions
• Volatile consumer demand
• Delivery delays and failures

Now that we have examined the root causes that can lead to excess inventory, let’s take a look at the damage that can be caused if it is not brought under control.

What are the main disadvantages of excess inventory?

First and foremost, there is the cash flow issue. A business relies on consumers to purchase goods at a projected rate to finance operations and maintain a good revenue flow. When extra inventory sits in the warehouse, that stock is not generating the cash that these businesses are counting on.

To make matters worse, it’s not just about lost revenues. Stock that’s taking up shelf space in the warehouse also increases operating costs. 

Rental costs and manpower are becoming more expensive, and when products spend too much time on shelves in the warehouse, they may deteriorate in quality or just become obsolete inventory (seasonal trends that go out of style, for example). The costs of product storage  add up, and are putting a real strain on retail profit margins.

It also affects company financial projections as businesses have to adjust guidance on their margins due to offering heavy discounts to get rid of inventory which is costing them more than they anticipated due to decreased inventory turnover and increased storage cost. This hurts profitability and has a negative impact on company value.

Excess inventory challenges are not the same across all retail sectors as specific areas such as home furnishings, footwear and apparel are having a tougher time than others. It also creates challenges for marketing departments to come up with campaigns that are compelling without appearing desperate to dump surplus inventory at any cost.

Analyzing these inventory issues is an important step in understanding how excess stock becomes a problem, how to solve it and prevent excess inventory going forwards.

Options for excess inventory management

Now that we know the potential damage caused by excessive inventory, what can retailers do to manage the situation?

The most important thing for managing the situation is to leverage the latest technologies for inventory tracking across multiple warehouses, while interfacing with online ordering and delivery management platforms.

These platforms should use both historical data and machine learning to give companies information regarding the real-time status of their inventory, as well as making the most accurate suggestions possible regarding the target amount of inventory required in consideration of the latest market trends.  

Once the technology is in place, a retailer can turn their attention to the basic three options they have to manage their excess stock. 

According to a recent KPMG survey, retail executives intend to manage their excess inventory by:

• Selling excess inventory at a discounted price
• Keeping excess inventory until next season
• Selling the bulk of excess inventory to off price retailers

1. Sell in bulk to discount stores

While this is a less complicated solution as most of the inventory is sold in a one transaction to a single entity, the discounts demanded by off price stores and liquidators are so steep that it makes the most sense when inventory is about to become obsolete or some other urgent situation.  

2. Keep in stock and wait for next season

Holding inventory until next season only works for goods that can be stored for at least a year and won’t lose value over that time period. 

When calculating profit margins, it’s also important to take into account the additional storage costs that will be incurred until the merchandise is sold next season.

3, Sell at a discount

This practice is by far the most common practice as it has the best chance of recouping some of the losses from excess inventory.

For one, it reduces costs by moving goods out of storage space and into consumers’ homes.

There is also much more room for creative discounting based on offering consumers multiple items or special delivery options. This gives businesses a fighting chance to regain their profit margin on some items, as opposed to selling the entire inventory to a discount store and writing off the loss.

Companies can also highlight low-cost delivery options for discounted items, and use the delivery experience as well as lower prices on products to differentiate themselves from competitors.

Offering the right last mile delivery options to consumers and optimizing delivery networks are key to managing excess stock in the most cost-effective way possible. 

Using technology to turn over inventory quickly

During these uncertain times with rising prices and supply chain disruption, it’s challenging to anticipate inventory levels and predict market demand. 

Online consumers are looking for the lowest discounts along with most delivery options, while businesses want to find creative ways to sell excess inventory at discounted prices and still make some money. 

This is where increasing delivery efficiency and cutting last mile delivery costs can be directly linked to successfully reducing excess inventory levels. Businesses can use a Delivery Management Platform (DMP) to customize their last mile delivery operations for efficiency, and offer the delivery options that online consumers have come to expect.

How to eliminate excess inventory

Supply chain disruption and the inability to depend on suppliers resulted in keeping larger inventories and the so-called move from “just in time” to “just in case” inventory control. 

Unfortunately, what was meant to be a solution for fulfilling customer orders and increasing revenues has turned into a problem that can result in lower margins and lost revenues.

The good news is, using today’s technology, retailers are in a better position than ever to manage excess inventory, cut losses and even turn a profit. 

By using creative discounts that encourage consumers to purchase multiple items, retailers may be able to increase sales volume to offset some of the lost margins.

Likewise, a drop in activity also has the potential to lower storage and delivery costs, take some of the pressure off margins, and give retailers a little breathing room to reassess their inventory and pricing strategies.

The post 3 Ways to Handle Excess Inventory in Retail appeared first on Bringg.

Creating an effective reverse logistics process is an operational nightmare, with completely different considerations – and often different resources – than traditional forward logistics models. 

How can reverse logistics handle the influx of returned goods without causing problems further up the supply chain, and get goods back on the market faster? 

This article looks at the challenges around the reverse logistics process, where retailers are struggling the most, and how they can implement a reverse logistics plan for cost effective returns management. 

What is reverse logistics?

Reverse logistics refers to any logistics process which reverses the common flow of raw materials or finished goods along the supply chain, from distribution centers to sorting locations to the end customer. This includes drivers returning to a warehouse with products from a failed delivery, or products being returned to a retail outlet or storage facility.

From an e-commerce perspective, reverse logistics refers primarily to product returns.

The reverse flow involves the end customer, shipping carriers, third party (3pl) logistics service providers, retailers, distributors and manufacturers, across multiple global locations. Reverse logistics are complex, but with product returns growing exponentially, innovative e-retailers must deploy flexible reverse logistics solutions to minimize losses due to product returns, asset recovery, disposal services and failed deliveries. 

With the estimated growth of worldwide e-commerce reaching a hard-to-fathom $5.2 Trillion in 2021, the potential volume and cost of reverse logistics flow are staggering. This has made reverse logistic management more challenging, as well as more critical than ever. 

In response to these developments, many key industry players have come together in global organizations such as the Reverse Logistics Association to help optimize reverse logistics processes now and in the future.

E-retailers must gain a deeper understanding of the reverse logistics process in order to increase efficiencies and reduce storage and distribution costs while maintaining customer satisfaction and loyalty.

Planned vs. on-demand reverse logistics

The reverse logistics process features both planned and on demand delivery and pickup services depending on business requirements.

Planned reverse logistics

Each business has its own supply chain requirements and existing delivery methods which impact how they can best achieve the most effective reverse logistics flow possible. A great example is bottled water companies that leverage forward logistics deliveries to facilitate their reverse logistics for pickup and recycling of used jugs. 

Electrical appliance and furniture retailers, for example, may have a return policy that requires home collection of large items, but limits pick-up days to once a week. This might work for traditional logistics covering local geographies but is difficult to apply to the global world of online shopping.

For companies doing ecommerce fulfillment, reverse logistics systems must primarily deal with product returns where its difficult to predict where and when the next reverse supply chain activity will be required. Likewise, since the product was purchased online, there can’t be a requirement for the buyer to return the product to the store. For these reasons and more, planned reverse logistics activities are no longer relevant when it comes to today’s online shipping volumes.

On demand reverse logistics

Traditional brick-and-mortar retailers actually have a quasi-on-demand product return system, except in their case the responsibility is on the consumer for the reverse logistics of getting the product back to the point of purchase.  Once the product is brought to the return counter, then it is essentially an on-demand service where a retail professional can then physically accept the returned product, provide a credit and hopefully build customer loyalty by personally providing a positive customer experience.

Online retailers, on the other hand, not only have to supply the on-demand return service but also have to guarantee home pickup of the returned product within a limited time frame. While physical stores serve limited local geographies, online retailers have worldwide markets.  It’s a lot easier to optimize reverse logistics for a city and five surrounding communities, than it is for one global hub covering five continents.

The bitter pill for e-retailers to swallow is that on-demand reverse logistics are a significantly greater logistics management challenge, when compared to traditional planned reverse logistics processes. Fortunately using the latest technologies, even on-demand reverse logistics can be brought under control and optimized for maximum efficiency.

When is a reverse logistics process used? 

While product returns are understandably a key concern for e-retailers, there are actually five main events that require reverse logistics solutions:

Customer returns

Online customers are usually given a limited time period to return a product, but this can vary wildly between companies. Leading e-retailer Amazon, for example, offers a 30 day return policy while leading online foot apparel retailer Zappos offers an impressive 365 day window. Amazon’s policy is easier from a reverse logistics management perspective, as resources must be made available every 30 days for possible customer returns. Zappos is a more serious challenge as resources must be made available for a full year, along with peak seasons where too many simultaneous orders in the returns process can potentially choke the system.

Failed deliveries

This reverse logistics flow is initiated by the delivery driver due to various circumstances such as the customer not being home, the address not existing or the product not looking like what the customer ordered. In all these cases, the most efficient reverse logistics process with the lowest storage and distribution costs, is having the same delivery driver return the undelivered products back to the distribution center.

When it comes to outsourcing reverse logistics services, it is important to clarify whether this type of closed loop supply chain activity warrants additional charges since the delivery driver is heading back to the distribution center in any case, whether they take the goods from a failed delivery or not.

Returning damaged parts

If some or all items in an order are found damaged on arrival at the customer’s premises, the driver must mark which products were accepted, and which were damaged and returned to the retailer for processing.

Waste management disposal and recycling

As part of today’s brand efforts to secure green logistics credentials, many retailers, including US retail giant Best Buy, are offering on-demand reverse logistic services to dispose of old electric appliances and other household products, and recycling them where possible. Reverse logistics efficiencies and more sustainable delivery operations can be gained here by coordinating pick-up of old products for recycling while delivering new orders in the same area – or even better to the same customer.

Product lifecycle milestones

Service lifecycle management is all about maintaining the operational health of a product from the time it is sold to the end of its lifecycle. This can include spare parts, upgrades and eventual product disposal. 

Why reverse logistics is more important than ever 

Reverse logistics has always been an issue in regard to supply chain management – even before the eCommerce era. But the monumental increase in the volume of online retail sales and subsequent changes in consumer purchasing habits have contributed to corresponding increases in the volume of product returns, making it very difficult to take control over the process.

What exacerbates reverse logistics flow issues even more, is both the sheer quantity of product returns coupled with the ever expanding window consumers are demanding to return unwanted goods. Suddenly, reverse logistics – both from the retail and customer perspectives – have become much more difficult to manage without even getting into optimization and who is going to pay for it.

At the end of the day, customer experience is really the primary pain point in reverse logistics. A bad product return, like a bad delivery experience, threatens hard-won customer loyalty and may jeopardize revenue from future purchases. 

The challenges of reverse logistics

With increases in volume, complexity and global destinations, the challenges of today’s reverse logistics operations can only be met by using an advanced Delivery Management Software (DMS) solution. By leveraging the latest technologies, companies can improve their reverse logistics operations, increase operational inefficiency and lower costs.

The process of returning products to a distribution center is inefficient by definition, as it incurs high costs. Even after arrival at a warehouse, the returned product can stay in storage for weeks if not months before it is identified, evaluated and sent to its next destination. Every day a returned product sits on the shelf, is another day of increased costs and lost value.

The costs of reverse logistics

Reverse logistics is expensive for everyone. According to the IMARC Group, the global reverse logistics market was valued at US$ 563.2 Billion in 2021. The costs for retailers are high as well, especially if they haven’t prepared themselves to provide on-demand pickup of returned goods. In such cases, they have to find a last-minute solution for getting the returned product to the nearest warehouse and usually pay a hefty premium to cover the cost of inefficient reverse logistics operations.

Therefore, it should come as no surprise that in the past many retailers were discouraged and did not deal with the challenges of reverse logistics, due to the hassle, cost and technology required to manage it. That attitude has changed as retailers now understand that they have no choice but to take control over their reverse logistics operations if they want to remain relevant and succeed in the world of eCommerce.

Minimizing the demands of reverse logistics

The objective of optimizing reverse logistics operations is to minimize expenses and ideally, recover maximum value from returned products. This is particularly important for categories with high return rates such as fashion, which have a 46.5% return rate – nearly double the returns for electronics, the next highest product category. 

In these particular cases, shoppers are still hesitant to purchase new products without seeing or touching them first. In fact, 60% of consumers said they “bracket” their apparel purchases — purposely buying products in multiple sizes and colors, with the intent of returning most of the order after selecting the product they want.

Due to the high levels of inefficiency in most reverse logistics operations, it is simpler and cheaper for many retailers to have customers keep items rather than initiate and manage the reverse logistics process. This is mostly due to retailers’ unwillingness to deal with processing returns, finding temporary storage, repairing broken products, arranging proper disposal, and related tasks. 

The bottom line is that brands must improve the online purchasing experience to the point where consumers select and are shipped the products they really want, thereby minimizing product returns. Likewise, consumers need to be educated on the importance of closed loop supply chains and the negative effects of product returns on the environment. 

While omnichannel distribution has been embraced as a way of increasing sales, for better or worse, returns are also part of the omnichannel experience. Retailers need to find solutions for reverse logistics that leverage existing omnichannel last mile delivery flows, including delivery and return assignments integrated into driver routes and schedules.

Returns are part of the omnichannel experience….logistics providers will need to provide solutions for [returning goods] through technologies that support omnichannel last mile delivery flows, including delivery and returns on the same run.

Bringg, State of Last Mile Logistics

How to manage reverse logistics in your supply chain

To optimize reverse logistics and reduce reverse supply chain costs, e-retailers need to implement solutions that include specific modules for product returns and reverse logistics management. Here are some key features for managing reverse logistics which should be part of any complete delivery management solution:

Integration into delivery management platforms

Today’s return volumes mean that e-retailers must have reverse logistics tools integrated into their delivery management solutions. Besides optimizing delivery routes and driver schedules, the system should also enable consumers to initiate return requests, create labels with barcodes and schedule convenient times for pickup of product returns. 

Reverse logistics software

Reverse logistics features help shippers and LSPs coordinate the complicated process of reverse logistics. The software should help automate the return process, coordinating tasks among the various in-house and outsourced logistics resources.

Appliances delivery logistics software should also be able to increase drop density by adding on-demand returns to new product deliveries during automated route creation. It should also factor- in pickup of old products for proper disposal or recycling at the end of their lifecycle. It should also enable dispatchers to request adding stops for ad-hoc returns by communicating directly with drivers along the route. 

Deployment of driver apps is a key component of route optimization and scheduling – and it’s also important for managing failed delivery attempts, damaged goods and proof of compliance. If a delivery attempt fails, the driver should be able to upload the information using their app, making it easier to process and preparing the distribution center to accept the returned goods.

Syncing order numbers

It is important that the delivery platform enables scanning of a single order number and automatically identifies all the corresponding tasks that must be completed to return the order.  This helps strengthen the reverse supply chain, making it easier to identify the product and decide what to do with it once it is sent back to the distribution center.

Processing returns and data analytics

When a returned product enters the warehouse, it should be scanned and automatically linked with the initial customer order, showing where it came from, when it was shipped and by whom it was delivered.

By collecting historical data on each shipment and analyzing the results, the system should be able to identify the best way to ship goods in any given situation including which supply chain resources (e.g. regional warehouses, dark stores, outsourced logistics services) should be used for deliveries and returns.

In order to provide this expert advice, the system must have end-to-end visibility throughout the supply chain pertaining to both forward and reverse logistics.

Proper order inventory tracking, management and data reporting on every node in the supply chain also helps reduce losses and gets returned products ready for resale as fast as possible. Ideally, the entire supply chain – both inbound and outbound logistics – should be synced to avoid data silos and enable real-time sharing of critical product information.

Your logistics management software and TMS (transportation management systems) should be integrated with supporting systems – including inventory management (IMS), POS, and WMS – in order to understand where your inventory is stored, and where it needs to be delivered.

If your reverse inventory is visible across the supply chain from the moment it is returned to a distribution center, it will be faster and easier to identify, and hopefully shipped to its next destination without incurring significant interim storage charges.

Transparency in return operations builds up customer retention

To engender consumer trust in return operations, it is best to start by providing full transparency across the reverse logistics system. Send a notification confirming that the driver has picked up the product, followed by a second notification once the goods have been returned and a final message with the customer’s financial reimbursement are great ways to turn a product return into a positive customer experience. 

If there was a missed delivery, the system should automatically send a message with a link to reschedule the delivery. At the end of the process, it is important to send a product return evaluation questionnaire, indicating to the customer how much the product return experience matters to your brand.

Making reverse logistics a business priority

Making reverse logistics efficient and effective is a critical part of supply chain optimization. To make this happen, retail companies and their logistics partners must integrate into their delivery management solutions in order to stay competitive. 

By leveraging the latest advances in delivery management platforms, supply chain leaders can optimize their reverse logistics services, minimize financial loss, improve shipping efficiency and increase customer retention. All this while encouraging environmentally friendly closed loop supply chain practices. 

People Also Asked:

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As online shopping grows, retailers have to leverage every new touchpoint in the delivery process in order to continuously build customer loyalty. One touchpoint that doesn’t get as much attention as the others is the returns process.

What was once a necessary but relatively unimportant part of online retail is fast becoming a pivotal part of the overall experience. In the U.S. alone, some $218 Billion of merchandise was returned to online stores in 2021, with the average rate of returns for online purchases leaping to 20.8% — an increase of 18.1% year-on-year.

As consumers get accustomed to shopping online, they’re also returning more items. What’s more, research shows that return policies play a key role in the decision-making process for many online shoppers. Return alternatives that give customers the confidence, flexibility and convenience to order and then return unwanted items can also become a gateway to improving customer loyalty with exceptional customer service.

Research over the last years shows that American consumers are consistently returning high quantities of online transactions. Consumer surveys show that roughly half of all US customers said they returned an online transaction in the last year. And a recent National Retail Federation report noted that phenomenon is still growing, with returns of online retail purposes breaching the 20% threshold for the first time. It recorded the average rate of returns for online purchases as 20.8% — up from 18.1% a year previously.

Returns go beyond convenience and tap into shopper psychology relating to customer care and value. When online retailers go the extra mile to provide easy return options, they’re making a marketing statement, and customers will be instantly drawn to purchase more. After all, brands are building trust, and customers need to feel secure that if they’re not satisfied with their online purchase, the return experience will be as enjoyable and seamless as the shopping experience itself.

What are eCommerce returns?

eCommerce returns refers to the process of returning physical goods bought from retailers online. Almost all businesses need to handle returns, but in eCommerce the process is pivotal: for various reasons, customers return a greater percentage of products online than they do in physical shops.

The ability to handle returns quickly and effectively can make the difference between delighting consumers or letting them down. The difference can be them vowing to never buy from a business again, or becoming a regular customer who happily recommends your company to others.

Making returns options available

Customers electing to return their orders to store and those who send their purchases back via a shipping service do so for different reasons.

People who return in-person do so as it’s faster, they want to avoid paying for shipping (when shipped returns are not free), and often find the return location to be convenient. Those who prefer sending an order back through a courier place an emphasis on the ease of being able to return from wherever they happen to be, or are limited by the fact that the retailer only exists online.

Bridging these comes the advent of pick up and drop off lockers, which allow customers an increase in the number of physical return locations, much like in a physical store, but often in places that people already pass through on their daily commute. This option provides the convenience of a physical location somewhere nearby, as well as being available for free.

In recent years, couriers have made great leaps in enabling an expedited, convenient returns process. Instead of repackaging items and taking them to a store or sending them back, customers can now apply a return shipping label and drop off the item at a range of locations, or receive a special mobile code, which can be shown in lieu of a shipping label. In some cases, the items need not even be re-boxed, so as long as the contents are verified and the correct shipping label or digital equivalent (such as a QR code) is presented, the courier will then place items in temporary packaging and take them from the consumer; no more questions asked.

Profit margins take a hit with abuse and return fraud

Return fraud is the blanket name for when retailers are defrauded by customers who exploit the returns process. For example, some wear clothes then apply for a refund, while others may falsify receipts in order to receive more money than originally paid for an item on sale elsewhere.

Return fraud can also entail sending back items that were functional on arrival, but were broken or ruined by the customer, or falsely claiming that an item was sent back.

Because of the relative anonymity of buying online, return fraud is commonplace; to the extent that nearly 11% of e-commerce returns from the 2021 holiday season were deemed fraudulent.

Why online shopping customers hate returns

It’s not just retailers who hate goods being sent back; eCommerce returns are the bane of many customers’ shopping experience, and any eCommerce business worth its salt needs to appreciate this, and strive to make customer experiences as easy, speedy and convenient as possible.

According to a recent survey of Americans, fully two-thirds of consumers rate returning unwanted items as the worst part of shopping, while over half (58%) revealed they would be willing to do “nearly anything” to avoid returning the items they bought.

Why? The reasons are varied, and include the inconvenience of having to explain to a sales representative why they want to return an item, having to physically travel to a store, receiving store credit instead of getting money back, or having to pay for shipping back to the online store from where the items were purchased.

Turning eCommerce returns into an advantage

As concerning as returns are for retailers, the old saying about every crisis being an opportunity holds true here. eCommerce returns need not be an unmitigated disaster, and can be harnessed for the good.

Communication here is critical: if customers understand from the outset exactly what the process is, how long it will take, what they need to do, and what costs, if any, are involved, then your business is already on a good footing to keep customers happy. Similarly, making clear exactly how long online shoppers have to send back their goods helps manage customer expectations, and avoids unnecessary complaints.

Here too, customer expectations play their part. Online shoppers buying from retailers with brick and mortar stores increasingly expect to have the option to make eCommerce returns in-store, as well as the option for free return shipping. For purely eCommerce businesses, free return shipping is a real burden, but providing it as part of a hassle free return policy helps increase customer satisfaction and boosts the percentage of repeat customers.

Automate your returns process

Automation in general has a massive impact on customer experience, and perhaps this is most true for when customers return items. Returning merchandise takes time, but the process can be streamlined to some degree.

For example, allowing customer services reps to print return labels almost instantaneously saves precious time during the pick-up process. Similarly, communicating return status by automatically sending return shipping updates lets customers know when their returned goods arrive at the warehouse.

And if you really want to make customers happy, there’s perhaps no better way than triggering refunds early as soon as a shipment is recorded to be in transit back to your warehouse.

Another potentially huge differentiator is the ability to return eCommerce orders through a number of different channels. Instead of insisting that store-bought purchases alone can be returned to brick and mortar locations, allowing eCommerce customers to return their orders to wherever best suits them will give them a real boost in customer satisfaction, thereby making their overall experience more favorable, all of which helps in maximizing retention.

Another method for eCommerce returns that customers often find convenient is smart lockers. These lockers, dotted around cities and towns in locations such as gas stations, supermarkets, shopping malls, train stations and more, are often extremely useful.

Instead of going out just to return a parcel, customers can find a drop-off location somewhere along their daily commute, on the morning school run, or on the way back from the weekly supermarket shop. Lockers are also advantageous in that they enable customers to return items without waiting in line at a store.

The less time customers have to devote to think about returning their items, the the less troubled they’ll be by the process. Consequentially, they’ll be so much more satisfied with their experience and likely to continue purchasing from your business.

The impact of eCommerce returns on customer loyalty

If your returns service is bad, don’t expect repeat customers. It’s that simple. That’s why perfecting the eCommerce returns process is vitally important.

Optimizing your eCommerce returns strategy

There are five key elements that retailers need to think about when it comes to embracing eCommerce returns as part of their last mile delivery strategy:

1. Harness the in-store returns process

Enable returning items to a store. One of the key advantages for this from a customer standpoint is that they receive immediate free credit to shop for an alternative. This also puts the retailer in a position of advantage since the customer may opt to spend more money while in their shop.

As shops struggle to generate growth, the returns process gives retail chains an opportunity to bring people back to their physical stores. Similarly, the growth of ‘click and collect’ is helping retailers bring customers through their doors, where they can experience what the brand has to offer in-store and buy more. Using the physical stores of a retail chain as a distribution and fulfillment network for online deliveries gives retail chains more opportunities to increase the number of visitors to their stores and extend the customer’s brand experience – whether they want to buy, return or collect an item.

2. Manage returns policies and fees

Online return process policies matter. Return policies include time, cost and return methods available. There are many alternatives for return and retailers must think about them strategically as an investment in customer experience rather than as an additional expense.

Some online-only retailers even partner up with other retail chains to provide physical locations that facilitate deliveries. Naturally, free returns figures highly here, and so online merchants often include prepaid envelopes or boxes with every purchase in order to enable free returns shipping, so customers can easily return any unwanted items.

Retailers have to take into consideration that over half of shoppers exchange or replace a returned item so they should make it as easy as possible for customers to be able to exchange an item during the online return process. The fact that a customer wants to return an item doesn’t necessarily mean they wouldn’t purchase something else from that store. So for some consumers at least, store credit can be a good option and create a positive returns process experience which will encourage them to come back.

3. Embrace bracketing

With free returns offered by so many retailers, it is becoming increasingly common, especially among apparel and footwear shoppers, for customers to order products in multiple sizes or colors knowing that they can try everything, keep what they like and return the rest.

This trend, also known as bracketing is becoming increasingly popular as eCommerce businesses around the world make customer returns easier and cheaper. In a way the phenomenon can be seen as the evolution of “showrooming”, the shopping strategy by which people try garments or see products in-store before finding the best deal online.

Amazon actively encourages this behavior and suggests Prime subscribers to order multiple items without paying so they can try them at home before buying. This is a huge shift in the mindset of the online shopper, where a new “delivery dialogue” is established between consumers and online retailers and where the role of delivery becomes a two-way street.

While retailers need to carefully assess the terms of their eCommerce returns policies, there is a clear appetite and willingness for customers to embrace innovation in an area that is often neglected and seen as just post-purchase customer support. As the industry evolves and deliveries plays an increasingly pivotal role in the decision-making process, retailers will have to rethink the relationship between stores, customers and delivery partners, ensuring that they successfully orchestrate all the elements of their supply chain to create innovative logistical processes that will fuel loyalty through convenience and memorable brand experiences online, in-store and at home.

4. Keep an eye on your average eCommerce return rate

The average eCommerce return rate is an important metric for measuring how often consumers return online purchases. Understanding what proportion of orders end up going through the returns process is critical to calculating how effective the business is overall.

When the return rate is high, it’s telling you something. Sometimes something as simple as ensuring that clothes or shoe sizes are accurate can be the difference in saving countless batches of returned merchandise.

5. Make return shipping labels hassle-free

It’s important to understand that the reverse logistics process begins with the customers. And for consumers, just as much as for retailers, return is annoying enough as it is. Sending back orders to an online store is not something anybody looks forward to, or wants to spend time coordinating, so streamlining the return shipping process is critical for eCommerce retailers that care about keeping their customers happy.

Whether it’s by including pre-printed return labels in the original packaging, or creating digital return labels in the form of QR codes for customers to show when arriving at a drop-off return location, making this aspect of returning online sales smoother is good for both retailers and consumers.

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This article unpacks the pros and cons of LTL shipments and FTL shipments, comparing each one’s strengths and weaknesses before concluding with guidelines on how to select the best shipping method according to business objectives and criteria.

What is LTL freight?

LTL shipping literally refers to “less than a truckload.” The context is that of a tractor trailer truck which typically holds up to 45,000 lbs when fully loaded, carrying a number of smaller multiple shipments which are anywhere between 150 and 15,000 lbs each. LTL shipping refers to those smaller lots which are aggregated until it equals or is a little less than a full truckload.

Since these shipments use less than the entire truck, the free space is sold to other parties resulting in a single shipment shared by two or more customers. Freight class, or National Motor Freight Classification (NMFC), is a standardized way of classifying LTL freight shipments based on certain characteristics that all figure into which shipping method can be used and the final shipping cost.

Besides sheer weight, the freight class for truckload shipments is determined by additional factors such as:

• Density – the weight per unit of volume
• Stowability – the amount of space required to show the shipment 
• Handling – the amount and difficulty of  transfers, loading and unloading
• Liability – the chances a shipment will be damaged or cause damage to a third party 

All these parameters must be checked to make sure the shipment has the proper freight class for LTL shipping and how it affects pricing. With this understanding of LTL, let us have a look at the pros and cons of this particular freight shipping method.

Pros and cons of LTL freight shipping

Just like any other shipping method, LTL has both benefits and drawbacks. It really depends on what is being shipped, how quickly it has to get there and how much it costs.

The benefits of LTL shipments

One of the biggest benefits of LTL is sharing space and shipping costs with other customers. Using LTL shipping, each party is paying part of the overhead, making the price paid by each party significantly lower than other freight shipping methods.

There are also other advantages such as the use of palettes for protection against damage and the flexibility of assembling shipments consisting of multiple sizes and units. Likewise, it enables access to special services including inside pickup and liftgates.

The drawbacks of LTL shipments

LTL has potential disadvantages as well. It only allows shipping suitable for large packages that exceed parcel size but are less than a full truckload. For those shipping smaller items, very heavy items or very bulky items, alternate truckload shipping methods may be required. Another potential drawback are the surcharges and service fees that may offset some of those attractive LTL rates.

It is also important to understand that LTL is not the most profitable option for freight carriers compared to full truckload shipping. LTL shipping means drivers must stop at multiple touch points, and in certain cases even add on extra drop-off points. In terms of costs, this translates into extra loading and staging time, more fuel consumption and higher pay scales for drivers when compared to shipping methods like FTL. 

What is FTL shipping?

FTL refers to a “full truckload” of freight. In the physical world, this means taking up most of the 424 sq ft of storage available on a typical 8 x 53 ft semi-trailer. Even if the actual shipment is 75% or 95% of the available capacity, the consignor still pays for a full load. In general, FTL shipping is much less restricted by regulations regarding size and weight restrictions when compared to other shipping methods.

The decision of how much of the entire truck should be loaded is really a business decision depending on delivery and cost considerations. As opposed to LTL, there are no delays due to waiting for multiple customers to get their products to the FTL shipper. Since there is no sharing, the LTL carrier can start the shipping process as soon as the rig is loaded.

FTL shipping is used for large shipments that require most of the truck, which means there are no extra stops along the way. With FTL the entire truck belongs to a single customer that has full control over staging, loading and routing. As compared to the many stops and excessive handling for LTL, this ensures less damaged goods and faster delivery due to ownership of the entire process by a single entity.

Pros and cons of FTL shipping

Now that we have a better understanding of FTL, let us try and take an objective look at the benefits and drawbacks of FTL freight shipping. The purpose is to get a better understanding of FTL carriers, which in the end of the day helps make better decisions regarding which delivery method should be used in a particular situation.

The benefits of FTL shipments

The most important advantage of FTL is quicker delivery as there is no need to share the truck with other customers. Foremost of these advantages is the elimination of waiting time for multiple shipments until there is a full truckload. Other benefits include less staging, loading and unloading, resulting in faster delivery times and better protection of goods from damage due to excessive handling.

In commercial terms, quotes from LTL carriers are usually quicker and more accurate than other methods. Many locations even offer fixed pricing for FTL shipping with few weight and size restrictions.

FTL is especially cost-effective for shipping in bulk, large shipments and in some cases high-value goods. It is also easier to track due to the simplified logistics of a single point to point shipment.

The drawbacks of FTL shipments

In terms of drawbacks, it should be clear that shipping FTL is not the most cost-effective shipping method for customers with less than a certain quantity of goods. FTL carriers do not provide a lot or value added services and are less flexible when it comes to adding stops, alternate routes or other last minute changes that seem so common these days.

FTL is not a solution for small volume shipments and coupled with today’s acute shortage of long haul drivers, does not seem like it will be competitive with LTL in terms of price performance under 15,000 lbs in the near term.

Using LTL and FTL according to business objectives

From our investigation, it seems there are specific times when one should use LTL and other circumstances where FTL makes more sense. It really depends on business objectives. If a certain shipment must arrive in a week, then one might consider FTL shipping even if it is not cost effective. On the other hand, if a product has a low value, then there is no business justification in paying such a high percentage of the product value in shipping costs.

LTL shipments are relatively small, ranging from 100-5000 lbs. These smaller lots will not fill an entire truck, leaving space to sell to other customers that want to join the shipment. With FTL a single shipment fills 80-100% of an entire truck, which means they should have a minimum weight of 36,000 lbs.

The biggest difference between LTL and FTL is the cost. Even though one is actually paying more per sq ft using LTL, it actually comes out much more cost effective than FTL shipping. How is this possible? 

It is actually quite simple. Let us say the cost for FTL shipping is $1 per lb while the cost of LTL shipping is $5 per lb. That is quite a difference. But considering the load is only 100 lbs, then the cost of LTL shipping comes to a total of $500. 

When compared to FTL, the price might seem cheaper at $100 for a 100 lb load, but if one is required to take the entire truck and its 45,000 lb capacity, then it ends up costing a whopping $45,000 for delivery of a 10 lb shipment! Please note that for the sake of simplicity, many real-life factors such as density, stowability and other variables that factor into freight class definitions and shipping costs, were not considered in this example.

Although there are no hard fast rules in choosing between LTL and FTL, the table below is meant as a guide for selecting the best shipping method in each situation.

For freight shipments of 15 pallets / 15,000 Ibs or more, one should consider FTL shipping. While in theory FTL offers security, speed, and performance, when selecting the right freight shipping brokers and partners are also key in making sure goods reach their destination on time and on budget.

FTL is also a good choice for importers with sensitive or valuable goods. Special trucks can be tailored to each importer’s needs without having to worry about multiple shipments and shared space LTL partners. 

It is important to be aware of how likely products are to incur damage during shipment. They should be sturdy enough for regular handling at various points throughout the shipping process or have protective packaging to prevent damage from excessive handling.

For fragile products, avoiding excessive loading and unloading by multiple carriers is essential. That is why the FTL option makes the most sense, as all the fragile products are shipped from the same source and can be packaged, stored, routed and handled according to customer specifications.

Firm delivery and pick-up dates work better with the FTL option. This is because the very nature of LTL is waiting for other customers to fill up shared space, meaning there is no  concrete timetable for when that will happen. If volume is small and delivery time is not critical then LTL is probably the preferred shipping method.

In a nutshell, LTL is really about cost savings provided that the shipment is substantially less than a full truckload. One must take into account, however, that lower costs require increased flexibility with regard to shipping and delivery dates. In such cases, it is recommended to provide a pickup and delivery range to consignees, as opposed to specific delivery schedules which may vary in reality.

Conclusion: transforming the conversation

In facing today’s logistics challenges, it does not make sense to continue arguing about LTL vs FTL. This needs to transform into a more objective conversation about both LTL and FTL shipping methods and how each one should be leveraged to achieve business goals.

Even with a good understanding of LTL and FTL shipment methods, management of freight shipping and last-mile delivery remain challenging for many online businesses. Why not reach out to the experts at Bringg and start that conversation about improving your delivery and fulfillment performance while increasing customer satisfaction. We will be glad to tell you more.

The post LTL vs FTL – Getting the Most from Freight Shipping appeared first on Bringg.

Not to delivery packages, to provide delivery service, to enable better eCommerce experience, or to allow for a same-day delivery services of packages, but to how to get broadband Internet from the communications hub into people’s homes. 

Finally, when the ’90s rolled around, after the widespread adoption of cable television, it became apparent that the network which had been laid for cable would be perfect for broadband Internet. Currently, 80% of Americans are still using the cable television infrastructure for their broadband Internet connection.

Fast-forward to today and it’s hard to believe that the problem was so difficult to overcome. The big difference is the development and deployment of new technologies such as wireless communications and fiber optics, which was not practical option back then.

Last mile technology services in transportation and delivery are quite similar

Due to globalization and advances in technology that were accelerated by the COVID pandemic, the demand for same day delivery and delivering packages where products are stored until they are ordered and then must be delivered within a short window is the new last mile. Having to reach the customer’s doorstep as a final destination in a limited timeframe – has become a huge bottleneck.

The answer to solving this conundrum lies in the same solution that brought broadband Internet into our homes – namely, leveraging of the latest technologies and existing infrastructure. In the case at hand, we are referring to last mile technologies that, in similarity to broadband communications, enable optimized, fast and reliable delivery of goods to their final destination.

What are last mile technologies?

This is probably the fastest moving and most crucial development about which online retailers and industry professionals must stay informed. We are already starting to see the implementation of incremental changes within the supply chain such as route optimization, incentivized scheduling and real-time tracking.

Another major technological advancement is the ability to provide visibility across the entire supply chain. While this was formerly a blind spot with minimal data available, today’s demands for real-time updates – from both customers and delivery partners is one of the main drivers of last mile technology.

We are already seeing features such as SMS notification, real-time tracking, direct communication between customers and drivers, as well as innovative technologies that are changing the last mile logistics paradigm.

When looking under the hood, however, one finds that what really holds all these technological advancements together is software. Even when real-time delivery data is available, the real challenge is how it will be utilized, where it will be stored and how it will be shared between resources, stakeholders, delivery partners and customers.

Conducting last mile technology evaluation

Since delivery software is crucial in making all the moving parts come together, it is important to conduct a serious evaluation and make sure to address these important features:

• Automated driver management and scheduling
• Optimization of driver’s route and task completion 
• Visibility into inventory with full journey product tracking
• Option for customers to set their own delivery windows
• Ability to seamlessly handle product returns in a timely manner
• Delivery estimations based on order type, driver availability and additional stops

While providing a great customer experience is one of the key elements to online success, an equally important consideration is the ease of doing business with logistics personnel both inside and outside an organization. This means seamless integration with logistics partners, provisioning and synching of real-time information and accurate delivery estimates based on established delivery times supplemented by real-time data.

It is important to select a software solution that increases operational flexibility while making it easy to integrate with internal and external systems. This makes it easier to adapt to each customer’s changing needs, while increasing coordination with logistic partners to react quickly to dynamic situations, which have unfortunately become quite the norm these days.

What is first, middle and last mile connectivity?

Besides the delivery process, it is also important to recognize the first-mile. This is the part of the process where a product leaves the factory floor and is shipped by various means to the next stop, which may be a distributor, retailer or storage facility. This is in essence the beginning of the journey.

While first-mile refers to shipping from the source and last mile refers to local delivery services, middle-mile delivery is everything that is in between the beginning and end of the journey. 

One of the biggest breakthroughs today is the ability to connect the disparate parts that make up the first-mile, middle-mile and last mile to provide a comprehensive picture of the entire delivery process.

Supply chain visibility and data communications

Real-time visibility into delivery services and communicating that information to a central system that contacts customers automatically is a real efficiency booster.

This crucial component of last mile delivery operations, requires up-to-date data on both the exact location of the orders, the number of open orders, the internal or external fleets that are available and more. 

The availability of this data is what provides the analysis and efficiency measures down the road.

By analyzing the data on delivery flows along with customer data, online businesses can gain insights that are crucial for understanding and optimizing their delivery operations. Once these improvements are implemented, businesses can offer faster, more flexible and convenient last mile delivery services for their customers.

Multiple fleet management

While some businesses have internal delivery operations and others only outsource fleet management services, many businesses rely on a hybrid model consisting of both internal and external delivery companies which presents a unique set of challenges for fleet management systems. 

This is especially relevant with package delivery, considering that external delivery personnel may be the ones making the critical last mile touchpoint with customers. Businesses employing multiple fleets must find ways to maintain full control over the entire delivery process to ensure that their business needs and quality of service are met. Only by maintaining this control will online operations be able to exceed their customers’ delivery expectations.

How to increase efficiency with last mile technology

Today, last mile delivery is the most inefficient process of the entire supply chain, according to 59% of T&L companies in the U.S.

Online retailers should be asking themselves how they can make digital operations more profitable. One of the best ways to do that is going back to what we call traditional delivery accounting. Simply put, it means looking at every aspect of last mile delivery and seeing where costs can be reduced and more efficient processes put into place. 

As we look around, we see extreme volatility in the marketplace and its effect on the global supply chain, which in turn affects retailers’ ability to provide reliable last mile deliveries. At the same time, the demand for local delivery services keeps growing.  

These market conditions demand solutions that are flexible enough to deal with dynamic conditions of contraction and expansion, along with the ability to scale rapidly within a short time period if required.

Control cost of multiple delivery models

While the customer satisfaction resulting from a positive package delivery experience is paramount, businesses must also reduce costs and improve overall ROI. 

This used to be pretty straightforward in the days when shoppers used to come to the supermarket to buy their groceries. Today, in addition to in-store shopping, a customer may choose home delivery or curbside pickup. The introduction of multiple delivery models is great for consumers but a nightmare for keeping a lid on costs.

An essential part of increasing efficiency is having a system which optimizes delivery models according to circumstances, while increasing efficiency by providing detailed financial and performance data regardless of the delivery method.

Synchronize drivers, with staging, and loading package delivery times

Efficiency and excellent delivery experiences start in the warehouse before the orders are even loaded onto the truck. The key to improving efficiency here is to make sure the drivers are synchronized with what is happening in the warehouse. They should have specific instructions when to arrive at the loading dock as opposed to hanging around waiting for their shipment.

A smart logistics system makes sure that each vehicle is filled to capacity and on top of that ensures they are loaded in the proper order in terms of last mile deliveries. Knowing how long it takes to load each vehicle and minimizing each driver’s time in the warehouse are key contributors to improving last mile efficiency.

Optimize driver planning and scheduling

The introduction of automated driver planning, scheduling and dispatch software is a real cost saver. Instead of handing out deliveries to the best-liked internal drivers, the system determines the optimal delivery model and selects a suitable fleet or driver depending on real business considerations such as the cost of the order, cost of delivery, distance, time, service agreements and customer expectations – as well as the skill of individual drivers.

These driver management applications should also take into account regulatory requirements, union agreements, mandatory breaks and similar factors when making optimal dispatch and route calculations.

Use software to increase efficiency across the supply chain

Every online business wants data on their last mile delivery operations, but whether that is monthly, daily or in real-time depends on the operation and priorities of the customer. Some online businesses will have programmers build custom interfaces to transfer data from one system to another, while others still expect their 3PL contractors to manually input data into their system. From an operational perspective, this is clearly costly, inefficient and not scalable.

Similarly, working with contractors may expand geographic reach or delivery volumes, but training contractors and external drivers to meet quality standards can take a long time. If local delivery drivers are based on pen-and-paper planning, dispatching and delivery, then it renders even the most sophisticated fleet management systems useless.

That’s where automation comes in. Every logistics provider and 3PL contractor can improve efficiency by utilizing software that automates and speeds up logistics processes. At the end of the day, it is the overall software solution or platform that really enables all the pieces to come together providing a positive last mile delivery experience for customers, improved coordination with logistics partners and implementation of efficiency measures that truly impact ROI for e-commerce operations.

Last mile technology means customer satisfaction and operational efficiency

While the last mile journey must concentrate on delivering the best end-user experience possible, online businesses are waking up to the fact that maximizing efficiencies and lowering costs for last mile delivery makes a major contribution to the bottom line.

Bringg’s last mile technology enables retailers to focus on the key business priorities, by taking multiple constraints into consideration – including speed, cost, distance, vehicle fuel economy and the unique business needs – to automatically dispatch orders between the right providers.

Explore fleet and driver management solutions with Bringg >>

Whatever technologies are in plan to  be used, to increase efficiency for their last mile delivery process, it is important to remember that it is the management software that really brings everything together. 

If you are looking for a last mile delivery and fulfillment solution, then why not start a conversation with the experts at Bringg who are always willing to go the last mile to improve customer satisfaction.

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Just in time delivery requires moving inventory for delivery orders purely on an “as needed basis,” with the aim and chief benefit of significantly lowering inventory carrying costs by keeping inventory flowing from the moment it is picked. The just in time system is currently experiencing a new lease of life as just in time delivery is being realized as a reliable and useful solution to keep the fulfillment supply chain in motion from the end of the production process through the last mile in order to meet customer demand.

What is just in time delivery?

Just in time delivery means the process of creating goods in a ready state, or completing their production, so that a minimal inventory can satisfy demand and a delivery can take place with immediate effect in order that consumers receive what they want precisely when they want.

Restaurants are the perfect example of just in time delivery. A just in time system for delivery will, therefore, shift inventory only at the time that an order is made, and not before (this can prevent the issues and costs surrounding excess inventory).

The entire restaurant space relies on just in time delivery. When an order comes into the restaurant location, that order is prepared, cooked and packaged for collection to coincide with the pickup and delivery process. Otherwise that pizza is going to be cold, that burger is going to be soggy, or the condiments may be forgotten in the rush to hand over the order for delivery.

Just in time services are about getting the job done without missing anything, and by keeping everything moving seamlessly so that a minimal inventory satisfies demands. In the restaurant space, just in time delivery is critical for the freshness of the food. This is now being adopted and applied to every other category of products, including electronics, clothing, specialty retail and more.

For example, grocery delivery is another key adopter of just in time services. It’s crucial for groceries to be picked from shelves and be in a ready state when the delivery vehicle arrives for pick up, but it’s also important that refrigerated and frozen items are not allowed to warm up. Furthermore, there’s often a very short time window for grocery orders to be delivered. As such, these orders need to be carried out in the space of an hour or two.

Such tight windows mean that there’s no opportunity for inventory not to be ready, or for the hand-off process to be anything other than smooth. The SLA, the established contractual delivery time frame, for delivery will by definition be short.

Due to the importance of speed, the term “just in time delivery” has come to serve as a kind of catch-all that has permeated across different verticals within the retail delivery space. At its core. the concept centers on picking inventory efficiently, thereby reducing inventory holding costs in the supply chain, and then handing orders off to the fulfillment channel efficiently. All this, while providing visibility to the store associate and the customer along the way. Much like with just in time manufacturing, doing so helps decrease waste in both inventory costs as well as time wastage.

How does just in time delivery affect supply chain management?

Supply chain management is critical for any just in time system, and just in time delivery is no different. In all forms of delivery, keeping the supply chain moving without holdups is crucial, but with just in time delivery, it’s arguably even more pivotal.

That’s because with just in time delivery the products need both to be kept moving and also to arrive at precise times. This way, no unexpected waiting occurs, and neither will there be any need for additional storage costs.

Finding the balance in the supply chain is vital in keeping just in time delivery work properly. Supply chain management means inventory costs, storage costs and raw materials have to be managed in order to avoid holdups as well as excess inventory.

How just in time inventory management reduces costs

Done right, just in time delivery reduces costs across the entire supply chain by utilizing the origin point of inventory in an intelligent way. When a customer looks to check out on a website, and considers their available delivery options, two things are relevant for the retailer: First, what is the closest origin point of inventory, in order to provide the goods to the customer in a quick time frame, and second, what is the available capacity in the delivery network so that an order can be delivered as promised to the customer.

The origin point of inventory, once selected, can be a dark store, a regular retail location, a warehouse or somewhere else near the end of the supply chain. After being placed, orders are directed to a given location. Where the process becomes just in time is the stage at which the fulfillment vehicle arrives in order to collect and bring the order to the customer. It’s important that the picking of that inventory is executed in sync with the collection process.

As any retailer will know, one of the constraints with the retail store locations doing delivery is that there’s limited floor space available to hold orders that have been placed. Taking items off shelves and preparing them for delivery requires keeping them organized, and that in turn requires space, so it’s critical for just in time inventory management to keep the supply chain moving once they are picked. This is crucial, as it helps reduce costs by upping efficiency.

As such, the store associate picking inventory needs to receive the order request right before the delivery vehicle arrives. That timing, that synchronization, is precisely what just in time delivery is all about.

The process of forwarding an order request to a store associate, and the associate then picking the relevant inventory from a shelf, and then keeping the supply chain moving by transferring the goods to a delivery meal should take on average approximately five to ten minutes.

Just in time inventory management methods may differ depending on type of location. For example, in a dark store the supply chain hand-off may not be done by humans, but involve robotics performing both the picking and the handing over of goods to the delivery vehicle. In a warehouse location, by way of comparison, a section of the location may be dedicated to same-day delivery orders where the staging and other processes can be automated as much as possible.

Finally, an essential part of any just in time system is the ongoing communication between all the different moving parts of the process. Whether it’s a production process, a manufacturing process, or an inventory system, a constant stream of feedback enables continuous improvement. In the case of inventory management, regular communication helps in lowering costs by making sure that materials and orders keep moving in a constant flow without requiring much, if any, storage space on the way.

Problems with just in time delivery

One of the biggest problems is lack of visibility – and not just in the supply chain itself. For example, retailers readying orders for delivery need to know where delivery drivers on the way to pick up orders are located. But too often, it’s not at all clear.

A common challenge retail locations have is that store associates are busy trying to help customers in the store, take payments, handle returns and more. They don’t have an intelligent way to track the whereabouts of a third-party driver coming to the store, meaning they are essentially left in the dark until one party actively contacts the other.

This is a real bottleneck, as it means that the just-in-time element of the supply chain can be held up. It’s very common for a UPS or Fedex employee to enter a store to collect a drop shipment, but the store has no idea when that employee is arriving.

Why has just in time delivery become so popular?

The overall adoption of ecommerce has led to many changes in the delivery space, and with the pandemic having had a well-documented accelerating effect on that adoption, people want their orders faster, with convenient delivery and speed of delivery being crucial to customer decision-making.

In order to meet this growing demand, retailers need to have processes and systems in place to get orders out speedily and delivered when, where, and how customers want. Without such systems and a flexible supply chain, the processes will become clucky and inefficient. As such, just in time services are a great way to manage resources and retail space to meet that demand.

What are the benefits of just in time delivery?

Offering just in time delivery gives customers a very in-demand fulfillment channel in an efficient way. Done correctly, retailers can manage existing resources and existing inventory, and still fulfill on that same day, or immediately, to meet customer demand. If done less than optimally, it will be very difficult to meet that SLA and offer this service to the customer in a profitable way.

Once an order is picked, it’s essential to hand off the order to the driver in an efficient way. Any warehouse management solution, and any order management solution, must work well with the delivery platform in order to be time and cost efficient.

Just in time delivery helps reduce costs by providing intelligent ways for the retailer to either optimize their internal fleet or to outsource and dispatch to an external fleet. By offering both modes of internal and third-party fleet delivery, and having intelligent ways to hand the order over to meet that SLA, retailers can offer just in time services in a way that reduces costs and increases efficiency.

The difference can be drastic. If the retailer has the availability to offer within a two-hour timeframe, then this option can safely be offered at check-out and without harming profitability.

However, if a blanket promise is made to all customers that they can enjoy short, fast delivery windows, then the retailer ends up having to scramble internally in order to carry out the delivery. This can result in paying a premium to a delivery provider in order to collect the package and deliver it on time.

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