SALES DIRECTOR @ DIRECT COURIERS
In the previous instalment in this series, Garry Yovich discussed some concerns relating to delivery service coverage in Australia. In this final instalment on fulfilment, he provides some advice on how to best serve your customers.
There has been a large amount of discussion in the past few years regarding the fundamental ways in which the internet has revolutionised the shopping process.
Australian consumers in particular were once very much a captive market, but with the advent of online retail, the world is truly their oyster.
No doubt by now you've heard of the customer-centric reality of contemporary retail. I'm here to tell you that this kind of thinking represents the way retailers should approach every element of their business. And that includes fulfilment.
It's About Choice, Not Charity
Customer-centricity doesn't entail that a retailer should relinquish profitability to meet customer needs. In fact, it should mean almost the opposite: retailers need to be using a customer-centric approach in order to enhance profitability and therefore sustainability.
What does this mean? It means putting yourself in the customer's shoes.
The rise in popularity of free shipping and free returns is a direct result of this ethos. In saying that, this doesn't mean a retailer needs to take a loss on fulfilment in order to compete. Sometimes there simply isn't a business case for offering free, nation-wide, same-day delivery.
Nor does it mean you can't offer your customers the choice of, say, free five- to seven-day delivery nation-wide, alongside next-day delivery for an additional fee
The Rise of the User-Pays System
As the market matures, we will slowly see more and more of a shift towards a 'user-pays' system. While so many businesses are offering free delivery (and potentially building this into the cost of sale), they are trying to get the best possible rates from the carriers. At some point soon the carriers are going to have to increase their rates to cover the cost of the ever-increasing number of non-deliveries, the administration involved in re-organising delivery, and the cost of the actual re-delivery (sometimes more than once).
This issue – of not being able to complete the delivery of goods because there is no one home to receive them – is possibly the largest fundamental problem facing the courier industry for home deliveries. Many different solutions are being tried. Some businesses have done deals with newsagents, service stations and other retail outlets to use as drop points for their deliveries. Others are setting up security boxes in densely populated areas, and are also delivering outside of business hours, including the weekends, to try and get these deliveries completed when someone is home to sign for them.
At Direct Couriers we've taken a new approach to combat these issues, and whilst at the high end of the delivery market, our service offering is fast becoming a real alternative.
The approach here is to offer retail clients flexible delivery options that their customers want. While some consumers want to receive their goods at a moment's notice, others are more flexible about the window in which they accept deliveries.
A Premium Service Equals A Premier Solution
A shorter timeframe between order and delivery generally means buyers will be available to receive the goods, but there's still a chance they may be unavailable when the driver arrives. So in order to present e-retailers and consumers with more transparency of their deliveries, we notify the consumer via SMS and/or email when the goods are collected and en route. The email allows the consumer to track the driver the whole way to the delivery point through our live mapping software. This is available on any PC, tablet or smartphone. Furthermore another optional message can be sent when the driver is approximately five kilometres from the delivery location, alerting the consumer that the driver is almost there.
As a result, the notification system has reduced non-delivery (due to the customer not being available to sign for the goods) from 27 percent to six percent. This has to be the ultimate indication of where the fulfilment industry is headed, as well as being an excellent example of the beauty of customer-centric thinking in fulfilment.
In my opinion, it's absolutely critical to let the buyer select the level of service and the cost they are prepared to pay for the delivery. They know it doesn't come free, so give them the choice....read more
SALES DIRECTOR @ DIRECT COURIERS
In the previous instalment in this series, Garry Yovich discussed the pressing business priorities and goals that must be considered prior to partnering with a fulfilment provider. This week, he looks at ensuring you achieve the right area coverage for your offering.
Australia has always suffered from what has been described as 'the Tyranny of Distance'. Not only are we a long way from some of the major trade hubs in the world, our own country is very large for the population it supports.
This leads to a number of issues when considering nation-wide and even international fulfilment. Naturally, the first thing any retailer needs to ask is 'where is my existing customer base?' Beyond that, you may also wish to run some forecasting for expansion as your visibility increases online.
Initially, most businesses will focus on the local metro regions they're active in unless there is a clear business case to be made for supporting regional customers. We're also beginning to see more merchants seeking to sell into international markets as Australia's dollar begins to drop further below the US
Even Nation-wide Deliveries Can Be Pricey
When it comes to delivering to regional or international customers, it's imperative to have worked out the cost to your business, as well as considering your ability to charge customers an additional levy for the privilege.
Medium to large Australian retailers operating online almost always offer nation-wide delivery services. In this case, the reality is in small towns one local courier agent may actually deliver for all of the major transport businesses. It may be the case that one courier company gives it to another who gives it to another, and so on. This is not uncommon in our rural areas.
For these reasons, cost can be a very limiting factor when looking at deliveries Australia-wide due to increased charges incurred when delivering to rural areas.
Another option to consider for nation-wide deliveries is to use postal services. Australia Post offers a large national network that delivers to pretty much anywhere, but as with any service, it's important to research turnaround times so that you can ensure the service meets your customers' delivery expectations.
Handling Orders and Booking Deliveries: Integration and Automation
Another consideration to take into account: if you're electing to use a number of postal and courier suppliers, how is this managed from an IT point of view?
There seems to be a limited number of IT platforms that will not only manage inventory levels, shopping carts and a despatch system, but can also integrate with the carriers and Australia Post to book the delivery automatically.
Temando seems to be at the forefront of this at the moment and is continuing to evolve. Translogix and others are also continuing to develop these systems for the e-commerce space....read more
Thank you to all the tipsters who took part in our
Super 15, AFL and NRL tipping competitions for 2013.
We would like to congratulate the winning tippers
below who each receive Westfield gift vouchers.
END OF SEASON PRIZES
- Winner - $400.00 Westfield Gift Voucher
- Runner Up - $200.00 Westfield Gift Voucher
- 3rd Place - $100.00 Westfield Gift Voucher
- Ties for end of season prizes - the prize(s) will be shared
The tipping competitions are free for all our current clients to enter.
Registration for the 2014 competitions will open early next year!
SUPER 15 Tipping Competition winners 2013:
1st William W. Sydney
2nd (equal) Alistair R. Sydney
2nd (equal) Charles T. Sydney
2nd (equal) Robbie O. Sydney
AFL Tipping Competition winners 2013:
1st Patrick S. Melbourne
2nd Alan W. Perth
3rd (equal) Raymond M. Perth
3rd (equal) Stephen P. Melbourne
NRL Tipping Competition winners 2013:
1st (equal) Bhavesh P. Sydney
1st (equal) Darren P. Sydney
3rd (equal) Paul H. Sydney
3rd (equal) Wade R. Sydney
~ We look forward to everyone's participation next season! ~...read more
SALES DIRECTOR @ DIRECT COURIERS
As an online retailer, optimising your fulfilment strategy can mean the difference between creating a sustainable brand or risking complete failure. Be sure to have considered these points before inking a deal with a provider.
The local online market is going through a period of constant change
as multiple industries are being revolutionised by technology.
Recent fragmentation within the fulfilment landscape has served to
make the process of finding the right option more difficult for retailers
of all sizes – but it doesn't have to be an ongoing headache.
With the explosion in online purchasing over the past couple of years, most courier and transport organisations have tried in some way to get a piece of the action; some got in early and have a significant share of the market putting processes in place to cater for it, and others are still working on it. Even those companies who have always maintained that they don't want to handle home deliveries have had to re-consider due to such a large demand and potentially a very lucrative market.
There still doesn't seem to be a single solution out there for the online retailers due the variety of the products being sold, and the changing expectations of the online retailer and buyer.
The nature of the eBay category sales make them the most difficult for courier companies to handle. This is because each delivery can be vastly different to the next; the collection location can be anywhere, and quality of the delivery details and packaging can vary, making it very difficult for the courier company to effect the delivery.
The enterprises that are selling a specific range of goods collected from a single location (warehouse/shop) are a lot easier to cater for as the products and expectations are defined by specific collection times which are scheduled and can be managed.
On the other side of this are the enterprises offering a variety of options to the customer, which can include '30-day trials', 'exchange if you're not happy with the goods' or even 'refunds'. These return deliveries are far more difficult to manage for the online retailer and courier companies.
There are many delivery options available in the market today and while Australia Post is still the most commonly used, their competitors are growing in number and size.
Identifying Your Fulfilment Requirements
There are several things that need to be considered when selecting your delivery provider. After all, while the goods may have been sold, the transaction is not complete until the customer has received their goods. If the customer is not happy with the speed, service, handling etc. of the order, this could significantly affect future sales.
First you need to look at your business and the products you are selling.
- What size are they?
- Are they fragile?
- How are they packaged? – Some packaging may look very nice, but is just not suitable for transport.
- Where are your customers?
- What delivery time do your customers expect or prefer?
- Do you need confirmation of the delivery (proof of delivery or 'POD')?
- What is the average value of the goods?How many deliveries are you despatching?
Most courier companies are going to ask you these questions, but let's look at the reasons why these questions are so important.
Based on the size of the goods being delivered, you may not be able to use the Postal system; if they are very large for example. You could be paying your delivery charges based on the volumetric weight (cubic) rather than the dead weight. Some companies are simply not equipped to move these larger items.
Are they small enough to fit into satchels? This can mean a significant saving in cost as opposed to small cartons/boxes. Satchels can be delivered to most locations around Australia for a fixed rate, where carton deliveries can vary significantly depending on the delivery destination (and can be up to 10 times more costly).
If the goods are fragile then some transport businesses will simply not handle them. Do you want them to go down a sorting conveyer system or be sorted by hand? Do they need to be a direct delivery from despatch to the customer? These are questions an online retailer will need to consider.
How are the goods packaged? If you have fragile items but the packaging is as such that the potential damage is limited, then there is far less concern. If your goods are not in cartons or satchels then some companies will simply not want to deliver them as they won't be able to move through their automated sorting systems. Is the packaging evenly shaped (i.e. the packaging may be rectangular as opposed to an irregular shape, which can make loading and handling very difficult)?
Are your customers potentially Australia wide and in any location? Or are they defined to a particular area? There may be some transport businesses, particularly smaller ones, who specialise in a geographic area that offer a great price and service, but are limited to their geographical abilities.
The delivery time expectation is very important. Do you offer a choice? Have you promised 2 days? There is no point sending a delivery on a road freight service from Sydney to Perth when the customer expects a 2-day delivery. It simply isn't going to make it on time.
Do you want to offer your customers a same day delivery or even a three to four hour delivery? Can you pick, pack and despatch the goods soon enough to meet this requirement? From where are the goods being collected? Depending on your location, even if in a metropolitan area, this may or may not be possible.
Do you need or want to confirm the goods have actually been delivered? Most courier companies have some sort of tracking system, but not all, and they can vary greatly from an immediate email or SMS Proof of Delivery (POD) using sign-on-glass technology, to having to scramble through paper manifests or driver run sheets to obtain that same POD.
Based on the average value of the goods you sell, some delivery options may simply be cost prohibitive. If you are selling goods with an average value of $25, paying $20 to deliver them would simply not be economical unless the customer is willing to pay for it. If your goods are worth $1000, then $20 for delivery (for a fast safe delivery) could be very realistic.
How many sales are you making? This is probably going to make the biggest difference to the cost of transport. The more you deliver, the better position you are in to negotiate -and every transport/courier company is negotiable.
Research Potential Partners
Once you've considered these factors, you can then start to look for the courier businesses that can meet your requirements. When you believe you have found a few options, the next step in the selection process would be to assess:
- Stability of the Business - Have they been trading for some time and have a good reputation in the market? There have been a number a large transport businesses and numerous smaller courier business that have folded in the past 18 months. Some customers have had goods in transit that they have been unable to retrieve for some time, greatly affecting their reputation with the end consumer.
- Service range – Do they offer a range of services?
- Coverage – Can they deliver to all of your potential customers?
- Current Customer Base – Do they currently handle similar goods or could there be a conflict of interest with any of their current customers?
- Tracking – How good is their tracking and POD system?
- Customer Service – What level of customer service do they offer?
- Consigning System – How do you book your deliveries? Do you need to fill in consignment notes? Is everything online? Can you have a data link for automatic consigning and booking?
- Re-delivery – Do they have a re-delivery option when the customer is not home?
- Speed – How fast is their service?
- Account Management – Do you have an Account Manager you can work with to ensure you are getting most of the service available for the most economical rates? And are improvements in the delivery process constantly reviewed and put in place?
Ultimately, a sustainable relationship between an online retail business and its fulfilment provider will hinge upon thorough research and crystal clear communications. Be sure to understand the workings of your own business needs before seeking to learn about the functionality a courier or other fulfilment company can provide, as any disconnect between these concerns will result in lost revenue.
As an online business, your number one priority has to be ensuring the fast and efficient delivery of goods to the customers' doors. Without this, those same customers would have no reason to purchase from you above any other offline competitor.
In next week's instalment on this series, Garry Yovich discusses other concerns for online retailers to consider when partnering with a fulfilment company, as well as providing some insight into general trends in the local online industry....read more
In late August, our Melbourne operation will be relocating to new premises located at Western Avenue, Tullamarine.
These premises, previous headquarters of CEVA Logistics, are positioned in close proximity to the Domestic and International Terminals and have easy access to the Tullamarine Freeway and Western Ring Road.
The property features a modern office area of 1,609sqm and a warehouse of 4,508sqm. The warehouse is fully racked and has the capacity to store in excess of 2,000 pallets. Our online software has the added benefit of providing easy access to inward and outward movements as well as up to date stock levels.
In addition to the above, the overall site of 16,000sqm has ample space to handle multiple container unpacks, storage and alike.
With significantly more space, our Melbourne operation will be offering enhanced warehousing services including:
- Additional Pallet Storage: 2,000 racked pallet spaces currently still available.
- Designated Floor Space: for storage of odd shaped and oversized items.
- The 4,508sqm warehouse is a licensed 77g bond store, with full aqis and fumigation services available onsite.
- Unpacking of containers including FAK's.
Whether you are looking for a short term stop gap or a long term warehousing solution, call Nick Sposato on 0419 525 007 or email firstname.lastname@example.org for further information.
With 1,600sqm of office space, Direct Couriers Melbourne is seeking prospective tenants who require 350 to 700 square metres of office space. Interested parties should contact Paul Sposato on 0419 525 060.
The new Tullamarine site adds to Direct Couriers' growing network of warehousing space across Australia with facilities now in Sydney, Melbourne, Brisbane, Perth and Adelaide.
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