While consumers may not think about their holiday shopping plans until November, those of us in the transportation and logistics industry know that by August, shipping volumes have already started rising in anticipation of shopping season. Are you ready for the next peak season? You’ll need strong transportation strategies in place for getting your products to stores/consumers on time, as well as handling returns when the holiday season winds down.
Consumer Spending During Winter Holidays
Shortly after Thanksgiving last year, the National Retail Federation estimated that on average, consumers planned to spend roughly $1,000 during the winter holidays in 2018. And with more than 165 million consumers in the U.S. who shopped during the five-day period that includes Thanksgiving, Black Friday, Small Business Saturday and Cyber Monday, you can imagine just how high shipping volumes need to increase to meet demand. Depending on your products and industry, this can be quite the challenge.
Get Your Products To Stores And Consumers
Keeping up with ever-changing retailer requirements, like on-time, in-full deliveries, can be overwhelming at any point throughout the year. But it becomes increasingly difficult when dealing with the hard deadlines of national shopping days like Black Friday.
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Maintaining compliance with these rules requires a strategic approach. Many companies are using retail consolidation programs to help meet and exceed retailer requirements.
What is retail consolidation?
Simply put, retail consolidation combines orders from multiple shippers into a single shipment for retailers. A single shipment makes it easier to meet retail compliance rules. Retail consolidation programs provide consistency for all parties.
Quality retail consolidation programs require clear alignment and collaboration across suppliers, the retail consolidator and the retailer. Because of the stringent requirements required by retailers, retail consolidation programs meet those specific rules and should have standard processes in place for everything from appointment setting to delivery expectations.
Why do shippers choose retail consolidation?
While retail consolidation programs can improve the speed of delivery, that is not their only potential benefit. In fact, many of C.H. Robinson’s customers that utilize our retail consolidation service report improved on-time, in-full delivery rates, more control over total landed costs, consistent transportation and fewer touch points. These benefits certainly contribute to improved retailer satisfaction.
In addition, many companies have successfully used retail consolidation programs to cut transportation expenses and inventory carrying costs, resulting in improved cash-to-cash cycles.
Is retail consolidation right for you?
If you can answer yes to one or more of these questions, a retail consolidation program may be the right opportunity for your business this holiday season:
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- Do you need to improve your compliance levels with retailers?
- Have your transportation costs for retail customers been increasing?
- Are out of stock items or compliance fines affecting your bottom line?
- Do you regularly schedule retail deliveries to multiple distribution centers?
- Is a lack of expertise, technology or visibility negatively affecting communications with retailers?
- Do your shipment sizes and purchase orders vary?
- Would preferential appointment status help speed up your deliveries?
- Would you like your providers to have subject matter expertise specific to the retailers you serve?
How to create a successful retail consolidation program
The key to a successful retail consolidation program is high volumes of shipments. This is why retail consolidation works best when handled by an experienced consolidator that has substantial knowledge from working with many retailers. Be sure to look for a consolidator that can provide reliable service and quality capacity to handle your shipments — even during seasonal surges.
Returns Need To Be Hassle-Free
Returns can encompass everything from product retrieval, scanning, liquidation, return to vendor or disposal. Historically, returns peak after Christmas. But with more multi-channel shopping options available, reverse logistics programs have been peaking in late November and December. Efficiently handling returns often requires a reverse logistics plan.
What is reverse logistics?
Reverse logistics involves returns, recalls, withdrawals, recycling and disposal of products after the point of sale. When a product can’t move forward in the supply chain, reverse logistics programs come into play to reduce overall costs, maximize recovery value, strategize disposition and determine where the product will go.
How important is reverse logistics during the holidays?
Reverse logistics is critically important to supply chains — especially during the holidays. Consumers expect returns to be as simple as buying the product in the first place, which includes speed of return and clear communication. For retailers, hassle-free returns are also vital to brand loyalty. And in today’s e-Commerce landscape, expectations are higher than ever.
Additionally, if businesses do not have a reverse logistics program in place, they can lose a lot of money. C.H. Robinson’s reverse logistics programs often take advantage of our liquidation programs, in which remarketing and logistics services can help recover some value of obsolete, distressed and returned merchandise. We work with a private online merchandise auction platform, allowing pre-approved buyers to bid on inventories in a competitive, transparent environment to help boost revenues. Sellers can expect between 15%-50% greater recovery rates without having to invest in their own proprietary system management costs.
How to create a successful reverse logistics plan
All reverse logistics plans should revolve around visibility, communication and control. Without one of these, you may be opening your business up to unnecessary liability.
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- Start with your return policy. Make it easy for shoppers to return products with a consumer-friendly return policy. If it’s a painless process, they’ll be more inclined to spend that refunded money with you again. Also consider having a strategy in place for frequent returners who may abuse this policy.
- Define and streamline a retrieval strategy. Regarding e-Commerce returns, determine what products are worth getting back versus offering to the customer at a discounted price or even letting them keep the items. Be ready for inbound merchandise to arrive at warehouses and have processes in place to validate returns — perhaps by involving a third party. Establish a game plan for handling large return volumes during the holidays.
- Determine where returned product goes next. Does it go back into inventory? Should it be refurbished? Does it need to be tested for quality or product integrity? Or do you have processes to liquidate that product to recover some costs? Whatever is next, it should happen quickly. Prompt action means a better opportunity to resell the product for the highest recovery value and convert that inventory back into cash.
Focus On Transportation Strategies Before Holiday Surges Arrive
Transportation and logistics is crucial to winning and keeping customers — especially during the busiest shopping days of the year. In addition to retail consolidation programs and reverse logistics plans, there are many services and strategies that can improve your shipping success throughout the year:
- Inbound shipments. Help reduce inventory, increase visibility, improve cash-to-cash cycles and save on transportation costs.
- Omnichannel. Create efficient strategies whether goods are flowing through a storefront or directly to a consumer’s front door.
- Fulfillment and inventory control. Manage unplanned shipments at a moment’s notice with clear focus on timing and real-time visibility.
- Last mile. Develop effective first and last mile strategies that improve customer relationships and meet special delivery requirements.
With so much to think about and the winter holidays just around the corner, now is the perfect time to review and update your shipping strategies for a successful peak season.
Linus Kalenze is Vice President of Consolidation at C.H. Robinson. He has been with C.H. Robinson since 2000, where he began his career in the Corporate Procurement Distributions Services division. In 2004 he was named branch manager of the Consolidation Services Group that specializes in the development and execution of temperature controlled solutions and services. He was previously the general manager of the LTL temperature controlled service line. Kalenze holds a Bachelor of Science degree from Southwest Minnesota State University.
