Pól Sweeney, vice president of UK sales and business management for Descartes, discusses the increasing emphasis being placed on home delivery services and immediacy of fulfilment during times of heightened demand, and asks: how many retailers have a clear enough view across their sales channels of new orders and existing commitment to truly determine the incremental cost of meeting new customer commitments?
"There is no respite for retailers. Last year in the US, online sales exceeded those in store for the first time. Likewise, in the UK, online sales on Christmas Day were up 21% on the previous year. But while the majority will be preparing for high traffic and worrying about website performance, how many retailers are considering the operational efficiency and profitability of their online reservations and home delivery services?
"The surge in online retailing means home delivery services have now been placed at the forefront of customer facing business decisions. The challenge is how to provide customers with costed choices on how and when they want to receive the product they have ordered, especially when events such as Black Friday and the Christmas & Boxing Day sales place emphasis on the immediacy of fulfilment.
"But how many retailers are making decisions in real time on what delivery options to present to the consumer based on the cost to fulfil the order and delivery capacity within their logistical operations? How many are taking sales that are adversely affecting profitability or that they are unable to deliver because of a lack of visibility across the supply chain?
"Having a clear view across all sales channels of new orders and existing commitments means that retailers can determine the incremental cost of meeting new customer commitments.
"The ability to automate this process and offer dynamic reservations in real time provides both the consumer and retailer with a model for effective delivery. It allows retailers to maximise profitability through continuous optimisation of the delivery process. With delivery route planning considered at the point of sale, including business defined parameters, delivery assets and existing routes, the delivery options that make sense for the business are dynamically presented – even at peak times such as Black Friday.
"Consumers can be offered a number of costed delivery choices in seconds at the point of sale regardless of the sales channel. By calculating the logistics cost for each reservation, retailers can maximise route efficiencies, save valuable time, improve customer satisfaction and increase profit accordingly. Moreover, they can do so and remain assured of their compliance with legislation such as drivers’ hours.
"In the same way that many retailers are starting to recognise that discounting can be a false economy, it is time for businesses to start looking critically at their reservations and home delivery services and ask the question: ‘If I’m not doing this profitably, why do it at all’?
"After all, no retailer wants to get to the end of the holiday season and realise that all they got in their own stocking was a lump of coal."