It’s that time of year again. “Best of,” “top 10,” and “roundup” lists highlighting the previous year’s biggest and most memorable moments are making headlines everywhere… and the parcel delivery industry is no exception.
It too has its fair share of these end-of-the-year lists, and for 2018, a frequently cited trend on said lists is the increasing emphasis consumers place on fast, reliable delivery when making a purchase decision.
In its 2018 Global Consumer Insights Survey, PwC asked approximately 22,000 shoppers worldwide to weigh in on their shipping preferences – from deliveries to returns.
Not surprising, survey results revealed popular e-tailers such as Amazon and Alibaba have raised shoppers’ expectations about their product shipments: for one-third of those Amazon customers who use the company’s Prime service, the most important benefit cited was unlimited free delivery (mentioned by 72% of Prime users). And it doesn’t seem likely these expectations will lessen any time soon. On the contrary, they may actually increase: one-quarter of Prime users say they prize Prime’s free two-hour delivery option as well.
Despite mainstream adoption of these delivery expectations, however, product shipments remain one of the hardest problems for manufacturers and retailers to solve. The sector is under severe (and mounting) pressure to deliver increasingly better service at a lower and lower cost.
With an exhausting holiday delivery season in the rear-view mirror, many leading companies are now re-evaluating everything from caps on the number of packages shipped to pricing schemes in an attempt to decrease distribution costs in 2019. But with an ever-increasing product selection at consumers’ fingertips, threatening consumer loyalty with unwanted limits on shipping could be unwise.
Instinctively, many manufacturers and retailers may therefore look to renegotiate shipping carrier rates in their favor. But similar to caps and pricing schemes, while carrier rate negotiations may provide short-term benefits, they lack long-term viability. As carriers foot the bill for rising labor costs and historically high shipping volumes due to the e-commerce explosion, their rates stand to increase, not decrease, and their willingness to negotiate supplier-friendly discounts will lessen.
The good news is that there is ample opportunity for winning solutions to emerge – one of which is a Transportation Management System for parcel shipping.
With a Transportation Management System in play, companies can reduce shipping costs while still meeting customers’ delivery expectations by boosting efficiency, choice and visibility for the entire delivery process. Specifically, Transportation Management Systems enable manufacturers and retailers to:
The prevalence of “fast, reliable delivery” on so many “top trends of 2018” lists is evidence we are truly in the midst of a shipping revolution. Companies and retailers looking to foster long-term customer loyalty will have no choice but to accommodate consumer preferences for shipping and prepare for companies like Amazon and Alibaba to continue to set new standards for delivery expectations.
Related: 4 Signs you Need a Transportation Management System for Parcel Shipping
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