What does agility mean for retail ecommerce?
No one wants their business to be unresponsive and ill-prepared — but there’s been so much written about the agile business concept that the meaning has become unclear.
It shouldn’t be. Agility means creating flexibility and the ability to adapt through the disciplined implementation of systems and practices that are repeatable, measurable and produce tangible results.
For retailers in virtually every product category, e-commerce is emerging as a major avenue for driving sales and profitability for both B2C and B2B businesses, and an agile supply chain is key. Without agility businesses won’t be able to take advantage of opportunities such as the US increasing the de minimis threshold for duty from US-$200 to US-$800. Duty-free exemption has not increased in over 20 years and it will open the gates to a substantial increase in importing and e-commerce as businesses ship to the US — the largest consumer market in the world — with reduced duties and taxes.
Knowing new regulations is the first step in seizing opportunities quickly and effectively.
In our 2015 Pulse of the Online Shopper study, we found that 50% of European shoppers abandoned carts due to long delivery times. So, clearly, a responsive, adaptable and efficient supply chain will have a profound impact on your bottom line.
With the uncertainty and volatility of changing trade landscapes to contend with, business agility becomes even more crucial. Retailers who invest the time and energy into a supply chain designed to respond and adapt will fare better.
A good delivery experience will make a customer loyal to a brand in 70% of cases
Andrew Starkey, Founder of Spiral 4 & Head of e-logistics at IMRG (UPS: Preparing for Tomorrow’s Supply Chain)
Our study of online shopping delivery preferences provides some interesting insights into the importance of an agile supply chain.
- 58% have abandoned a cart due to delivery times or because a date wasn’t provided at checkout
- 43% of European shoppers report that customer satisfaction hinges on timely delivery (the figure was slightly lower in the UK (37%) and considerably higher in Germany (54%)
- Although 2 in 3 shoppers still prefer to have packages delivered to their home, the number is decreasing and 21% now prefer delivery to a local retailer instead.(Source: UPS Pulse of the Online Shopper™ 2015)
The story of Tine K Homes shows how close collaboration has helped them become more efficient, more responsive, and able to grow across borders.
For another exporter, Cologne-based Music Store, flexible delivery options, later collection (for faster delivery times) and state-of-the-art technology meant that they could satisfy even the most demanding customers in new markets.
Making a business agile means assessing your (and your customers’) needs and often fundamentally rethinking the way your supply chain functions.
Practical steps to create agility in e-commerce
Many companies still rely on a forecast-driven supply chain for inventory planning. By comparison, an agile supply chain is market-sensitive, assessing and responding to real demand – in real time. (Source: The Agile Supply Chain: Competing in Volatile Markets, Martin Christopher Cranfield School of Management, UK)
Creating agility in the supply chain begins with transparency across the entire process – from purchasing and inventory management to order processing to order fulfilment – and this can often be achieved by putting the right software in place.
Warehouse and supply chain consolidation is often beneficial. Consolidating inventory from multiple warehouses into a larger centralised hub can reduce inventory levels, accelerate stock replenishment and eliminate pain points. (More about consolidation here.)
As for delivery, most customers expect a precise date when their purchase is confirmed. And they expect multiple delivery options such as alternative collection points and click-and-collect.
According to leading professional services company PwC, partnering with businesses that have drop-off and collection points provides a cost-effective and scalable solution. (Source: http://www.pwc.co.uk/industries/transport-logistics/fta-logistics-report-2014-total-retail-and-logistics.html)
Many retailers now use their existing brick-and-mortar outlets to handle online order-fulfilment and returns. It’s a convenient option that also drives foot traffic through stores.
45% of in-store pickups lead to an additional purchase during the collection process.
(Source: Flexible Fulfillment and Logistics)
In order to assess your needs, our UPS e-commerce experts discuss your particular needs and objectives with you. Close collaboration enables us to create a successful strategy for your business. Once this is in place, we arrange reviews to measure the strategy’s success, discuss any market changes, and adapt accordingly.
With a responsive and transparent supply chain, you’ll benefit from improved speed to market — wherever that market is —and you’ll be able to offer a better customer experience.
UPS Solutions for e-commerce agility
We offer a variety of useful solutions that can be combined to offer the e-commerce agility you need.
Our solutions to make you more agile include:
A global integrated transport network:
- UPS Standard® and Express® Whether you want fast or faster we have a suite of services to ensure your package arrives on a specific date or time.
- UPS Access PointTM locations. A network of over 24,000 drop-off and collection point locations worldwide to facilitate exceptional e-commerce programmes.
- UPS Returns Makes people more likely to buy from you, knowing that if there’s a problem, it’s easy to send deliveries back.
- UPS Capital Maximise cash flow and minimise risks when sending high-value items with our unmatched finance and payment solutions.
Visibility and control technology
- UPS My Choice™ Alerts customers to incoming shipments and gives them control allowing them to reschedule the delivery date and/or location.
- UPS Quantum View Gives you visibility on both outbound and inbound shipments, and can also provide shipment status notifications.
After-sales is vital to building relationships and growing a retail business. See how to develop a successful strategy.