Printer-Friendly Hot Issues

For a long time, FedEx has kept an ear to the ground in online retail. We understand the issues you’re facing and the questions you’re asking. And we’ve found numerous ways to quiet your anxieties. Shipment visibility
If you’re like most retailers, you view shipment visibility as a key opportunity for improvement. When you have visibility tools for your customers, distribution centers and internal departments, you make everyone’s life easier.

Ask yourself:

  • Can you “view” incoming shipments or drop-ship order status?
  • Do your customers call about order status?
  • Could better visibility help you staff labor and manage warehouse space?
Drop-ship service
Using a drop-ship service, you can maintain a wider assortment of merchandise without incurring the extra upfront inventory costs. About 15 percent of a nonstore retailer’s revenues are derived from vendor-direct (drop-ship) programs.

Ask yourself:

  • Do you have unique orders or products that are difficult to fulfill or inventory?
  • Do you have oversize products that would be better served being delivered through vendor-direct shipping?
Returns
Consumers are savvier than ever, so they’re demanding better services. This includes returns. Did you realize that 5 percent of all merchandise is returned? Or that 35 percent of all apparel is returned?

Ask yourself:

  • Do you measure returns? Are they above industry average?
  • Do different customers expect different returns services?
Out-of-stocks
Retailers lose 4 to 8 percent of revenue for not having the right product at the right time. Back orders mean $11 to $16 of incremental cost (shipping, call center, warehouse, processing).

Ask yourself:

  • Do you measure out-of-stocks? Are they above industry average?
  • Could you prevent out-of-stocks with proper shipping allocation?
Global supply chain inefficiencies
Global sourcing and global competition is putting constant pressure on your supply chain to drive costs down. And global processes are complex, especially those for import and export — where you have to contend with multiple languages, duties and taxes, time zones, and currencies.

Ask yourself:

  • How many vendors do you use? Are they U.S. or international?
  • Do you control inbound shipping? If not, are your vendors marking up freight costs?
Customer experience
Balancing logistics costs and customer satisfaction is a constant battle. You want to provide high-quality shipping, yet you’re feeling constant pressure from senior management to drive costs down. After all, shipping expenditures can average as much as 3 to 4 percent of your revenues.

Ask yourself:

  • Who are your customers?
  • What are their expectations?
  • What’s your customer service level and how do you measure it?