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How eCommerce Retailer’s Can Contain Transportation Costs During Peak 2023

Blog Post
How can retailers optimize order fulfillment to lower transportation costs while still delivering a great customer experience?
smiling truck driver in cab of semi

By Cindy Almond, Senior Vice President Account Management

This holiday season the transportation industry is seeing a return to pre-COVID levels, with the number of containers shipping mirroring 2019. Retailers have mostly put the backlog of inventory behind them and have placed their peak season orders. Getting inventory will likely not be a problem this year for retailers or consumers. But while things are improving in the supply chain, transportation, and logistics world, eCommerce retailers are still grappling with high fuel costs, higher carrier costs, and increasing Final Mile costs.

How can retailers optimize order fulfillment to lower transportation costs while still delivering a great customer experience?

Cut Back on Free Shipping

As a Senior Vice President Account Management, I am seeing Radial eCommerce clients focus on costs and profitability this year especially when looking at their transportation and freight spend. Freight is often one of their largest expenses, particularly when they offer free shipping to customers and via multiple fulfillment channels, like store fulfillment, BOPIS, ship-to-store, etc. One tactic I’m seeing is retailers are relaxing on delivery times a bit — and customers don’t seem to mind as long as they have clear communications and expectations set correctly. Even Amazon is relaxing their timeframe, stretching out delivery to save on transportation. I believe this trend will continue.

We’re also seeing retailers shift their shipping policies, rescinding free shipping, requiring certain basket sizes to qualify for free shipping, or moving it to a rewards program perk, to offset costs.

Optimize Omnichannel

Despite lingering concerns over the economy, holiday shoppers are expected to continue to shop, perhaps looking for discounts, but if things continue as they have been, I do feel that we will see shoppers to continue to spend this holiday shopping season. But, it’s essential that retailers really get their omnichannel strategy right, and deliver on those expectations. Shoppers want to shop the way they want to shop — that’s not going to change. What does this mean for transportation?

Typically, I see retailers looking at how to improve their tech stack to optimize omnichannel — particularly gaining real-time inventory visibility, integrating their order management system with suppliers, and bringing more backend information forward to customer-facing apps and websites. Customers want to know inventory availability, and other available store locations, as well as expected delivery times — before they add to cart. Optimizing the omnichannel experience can help customers buy more confidently, reduce the volume of returns, which lowers transportation costs.

Rethink Returns

I see retailers really hitting pause on free returns this year and many are now charging for returns, limiting return eligibility, and putting free returns in their rewards program bucket. Charging for shipping may reduce return volumes and cut down on transportation costs. Reselling returned items in stores, rather than shipping it back to a warehouse, can also keep inventory closer to the customer and decrease shipping costs.

Improve Rewards

As I’ve mentioned, free shipping and free returns may be moving into the rewards program, but retailers are seeking ways to continue to enhance personalization, create attractive rewards incentives, and inspire loyalty with their rewards programs. Creating a VIP experience with different benefits, memberships, perks, and incentives will be a continual challenge. It requires having the technology in place to really understand your customers and then deliver a seamless omnichannel experience.

Work with a Fulfillment Partner

Retailers turn to fulfillment partners, like Radial, to help take the pressure off and because fulfillment specialists have the expertise and infrastructure to deliver best-in-class fulfillment and delivery services. Radial has full omnichannel capabilities through LMS, we can route to stores, ship from store, and have marketplaces with partnerships.

One of our goals is to work with clients to get the best service and cost for freight. Our team shares insights on click to deliver — time estimate of when package will arrive at customer. If our clients are using other carriers, we make sure they have the same tracking integrity so we can maintain that real-time visibility. And, if they don’t, we work with client to figure out how much buffer to add to it. Overall, Radial Transportation provides extremely competitive rates and reliable services for eCommerce retailers.

Gain Continual Feedback and Improvement

At Radial, after peak, we sit down with clients and talk about lessons learned, what worked well and what we should change, and help plan direction for the following 12 months. We see ourselves as true partners with our clients, invested in their success, and bring the vast wealth of data insights we gain from our vast network of clients, partners, and suppliers. It’s so important to continually evaluate feedback, see what the data says, and make incremental improvements.

Combining a number of tactics can help eCommerce retailers lower and contain their transportation costs while still creating an exceptional customer experience. There is a balance to be found, for sure, but with careful planning, it can be done.

cindy almond

As Senior Vice President Account Management, Cindy Almond is responsible for overall client satisfaction and helping clients grow through proactive client engagement.  Cindy has more than 20 years of experience in leading high performing Client Account Management organizations in rapidly changing markets. She previously held the position of Chief Client Officer at PFS Commerce where she was responsible for engagement, satisfaction and growth of existing clients.  Cindy has also held various roles leading customer care operations, client project management, and sales.  She holds a BA from the University of Kansas.

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Radial can help with your transportation management.