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Key Trends in Fulfillment

Article originally appeared in the October Key Trends in Fulfillment issue of Internet Retailer.

Finding the best carriers to meet customer delivery expectations

Consumers’ expectations for exceptional shopping experiences are on the rise and retailers are scrambling to find the best ways to offer customers quick and reliable delivery options that aren’t too costly for their business. To discuss how retailers should assess their best current delivery options and find carriers that can provide the best ones, Internet Retailer spoke with Rob Glover, vice president of sales at OSM Worldwide, a shipping services company.

IR: What are some of the shipping challenges retailers currently face?

RG: More than ever, consumers are demanding new delivery options—such as two-day, same-day, two-hour delivery, as well as options for international orders. These demands are leading retailers to look at the shipping options they currently provide to customers and to ask themselves if they are meeting those expectations in a way that works for their business.

IR: What mistakes do retailers often make with their shipping and delivery strategies?

RG: Many retailers only one large carrier under a traditional bundled contract agreement. Under those arrangements, the carrier offers the merchant incentives to use one carrier for all of its shipments. But depending on the types of packages that retailers send, using one carrier for everything probably isn’t the best or most cost-effective approach for shipping.

The prices that retailers’ often receive is based on their carriers determining the merchant’s average package size. That approach may work for some retailers. However, each merchant should assess the different categories of packages they send and whether the retailer would be better off paying different rates for those different categories.

When retailers fail to take those types of steps, they often end failing to provide consumers with the multiple delivery options they have come to expect in today’s ecommerce environment.

IR: How can retailers overcome these challenges?

RG: They need to move beyond contracting with a single carrier and understand that different carriers offer different solutions. Then they need to find ways to match those solutions with their business needs for optimal results.

IR: What strategies can they implement to offer the best shipping and delivery options for their customers?

RG:  There are several strategies they can put in place to win on shipping and delivery with customers. The first step is to implement the right technology.  A multi-carrier shipping system is key.  Most systems today are very capable and provide a valuable way to service shop the best options available.  Each retailer can decide what options it wants to provide its consumers. It can then align those needs with the carrier that can handle it.

Retailers also need to approach their annual carrier negotiations with the end in mind. For many years, companies desired a bundled agreement. But in recent years, more companies are finding value in exploring options for the various service offerings they need and the growing number of providers capable of supporting those needs.