UPS has just announced that it will be joining FedEx in its move to dimensional weight shipping pricing for its ground services (cue the consensual groan from etailers and retailers alike). Like FedEx, UPS ground prices will now be based on the higher of two calculations, dimensions (LxWxH) divided by dimensional factor or weight.
So what does this mean exactly? To clarify, FedEx ground currently charges dimensional weight pricing only to packages measuring three cubic feet or greater but effective January 1, it will apply to all packages. UPS also already applies dimensional weight pricing for UPS air services (domestic and international), UPS Standard™ to Mexico ground services and for UPS® ground packages and UPS® Standard to Canada packages measuring 3 cubic feet in size or larger. Effective December 29, 2014, dimensional weight will be utilized to calculate the billable weight of a shipment on all UPS ground services and UPS Standard to Canada packages.
UPS Chief Operating Officer Alan Gershenhorn said in a statement, “UPS has been researching the potential expansion of dimensional-weight pricing for a number of years because it enables us to more appropriately align rates with costs, which are influenced by both the size and weight of packages.” According to a press release put out by UPS, “The company believes that as a result of the dimensional weight pricing method, more shippers will seek to optimize their packaging practices. These efforts will reduce excess packaging materials and overall package sizes, leading to related reductions in fuel use, vehicle emissions and transportation costs.”
Jerry Hempstead, president of Orlando, Florida-based parcel consultancy Hempstead Consulting, said it best when he told Supply Chain 24/7, “This is a very big change in pricing. There is no additional cost for the carrier. There is no additional service they are adding. They are just going to charge more for that which they have been doing for years.”
Retailers need to recognize the affect this will have on their business as this is the most dramatic increase in shipping costs we’ve seen in 15 years. Small to medium sized businesses will be most affected as they’ll likely need to adjust their pricing to make up for the increase in cost.
Here are a few things for retailers to consider:
Changes to UPS and FedEx pricing won’t be instated until the end of 2014 (December and January respectively) but now is the time for retailers to reevaluate their shipping strategies and prepare for the holiday season and beyond. There are other options out there and retailers should not feel stuck in the UPS/FedEx box.
It’s been a busy couple of months for us here at Newgistics as we’ve been hitting the events scene pretty hard this year! We are looking forward to the upcoming Home Delivery World conference, but our April calendar doesn’t end there – we’re very excited to announce that we’ll be a headline sponsor for the Operations Summit in Indianapolis, IN, April 22-24.
The Operations Summit is a quality conference exclusively about direct-to-consumer (DTC) ecommerce, catalog operations and fulfillment, with sessions covering topics such as order management, reverse logistics, inventory management, transportation, customer service, and payment processing. As DTC merchandise sales are hitting all time highs, digging into these strategies and best practices will be crucial for future growth in the industry.
The conference sessions will be led by an all-star lineup of industry thought leaders, with our very own Patrick Allard, director of business development, leading a panel session, “Returns Power Panel: Best Omnichannel Returns Processes.” Allard will join Eric Roberson of Title Nine, Jason Seemann of Express, Ryan Culver of OSP Group and Dan Kelly of H&M to discuss best practices for returns in the omnichannel world. Attendees will learn how to improve returns operational efficiency, create incremental revenue streams, enhance customer experience and retention, and boost asset recovery savings.
Additionally, we’re presenting a roundtable on “Outsourcing Fulfillment, What You Can and Can’t Control”, as well as hosting a networking dinner during the conference. Speakers from eBay, Inc., NetSuite, Zazzle.com, Brooks Brothers, and USPS, among others, will bring their expertise to the table in this must-attend event!
If you’ll be joining us in Indianapolis this April, stop by our booth #101 to say hello and check out our latest product and service offerings.
“These new facilities demonstrate our continued growth as a company and our commitment to providing our shipping customers a best-in-class experience at a cost-effective price point,” said Bill Razzouk, chairman and CEO of Newgistics. “Each location was carefully selected because it is well-situated to minimize transit times and shipping expenses for direct-to-consumer merchants.”
Multichannel Merchant’s second annual Operations Summit is off to a great start. Here are a few photos from the first day of the show.
It was a full house at Patrick Allard’s session “Creating Your Best Omnichannel Returns Process.” Allard, our director of sales, discussed a road map that will make retailers’ returns handling a reason customers shop with them.
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Speaker Patrick Allard will share secrets and best practices to create a seamless omnichannel returns process
AUSTIN, Texas—April 23, 2013—Newgistics, a provider of order fulfillment, parcel delivery and returns management solutions, today announced it is the headline sponsor of the 2013 Operations Summit, April 23 – 25 in Columbus, Ohio. Patrick Allard, Newgistics’ director of sales, will speak on Wednesday, April 24th at 11:15 on the topic of “Creating Your Best Omnichannel Returns Process.”
In its second year, Multichannel Merchant’s Omnichannel Summit is the only conference exclusively designed for eCommerce and catalog operations and fulfillment. The conference covers all areas of direct-to-customer sales, including warehouse; order management; picking, packing and packaging; reverse logistics; inventory management; parcel shipping, distribution and delivery; technology, IT and systems integration; transportation; customer service, call and contact center; HR/workforce management; and payment processing and fraud prevention.
“We’re proud to sponsor a show specifically catered to the unique issues of direct-to-consumer merchants,” said Patrick Allard, Newgistics Director of Sales. “One of Newgistics’ core values is to improve retailers’ bottom lines through stronger, more loyal relationships with their customers. Operations Summit connects Newgistics with merchants that share the same priorities and are passionate about customer engagement.”
Allard’s session, “Creating Your Best Omnichannels Returns Process,” will be held in the Delaware CD room on Wednesday. Allard will speak alongside a retail partner, and the session will help merchants learn how to improve consumer returns efficiencies while reducing costs; deliver a better customer experience and improve customer loyalty; create cross-channel marketing opportunities; and boost asset recovery savings.
Additionally, Newgistics will exhibit at booth #103. If you would like to discuss your organization’s needs for e-commerce fulfillment, package delivery and returns management, please feel free to stop by the booth.
About Newgistics, Inc.
Newgistics provides order fulfillment, parcel delivery and returns management solutions for top brands in direct-to-consumer retail and other industries. With Newgistics, fulfillment and shipping go far beyond packing and moving parcels. Every order and return processed by Newgistics opens up new opportunities for merchants to improve the shopping experience and their own efficiency. To find out more, visit www.newgistics.com.
Jeff Ketner or Brittany Johnson
Ketner Group PR + Marketing (For Newgistics)
If you’re attending the show, be sure to check out the session “Creating Your Best Omnichannel Returns Process” on Wednesday, April 24th at 11:15 a.m. Our own Patrick Allard, director of sales, will lead the session and be joined by a retailer partner. Here’s the full description:
Customers and prospects consider your returns policies and processes an important factor in their buying decision and brand loyalty. Yet, most merchants agree that their returns processes are far from perfect, especially in an “omnichannel” world. Here’s your chance to go back to your organization with a road map that will make your returns handling a reason for customers to do business with you. Be a hero, attend this session and learn how to:
• Improve returns operational efficiency
• Save dollars in your processes
• Create an incremental revenue stream
• Reduce contact center involvement
• Create improved customer experience and retention
• Create cross-channel marketing opportunities
• Boost asset recovery savings
In addition to leading the session “Creating Your Best Omnichannel Returns Process” on Wednesday, Patrick will also moderate the roundtable discussion “Improving the Returns Process” on Thursday, April 25th from 12:45-1:30 p.m.
Newgistics will exhibit at booth #103. If you would like to discuss your organization’s need for fulfillment, delivery and returns solutions, please feel free to stop by the booth.
Operations Summit is the only conference exclusively designed for eCommerce and catalog operations and fulfillment. The conference covers all areas of direct-to-customer sales, including warehouse; order management; picking, packing and packaging; reverse logistics; inventory management; shipping, distribution and delivery; technology, IT and systems integration; transportation; customer service, call and contact center; HR/workforce management; and payment processing and fraud prevention.
Retail enterprises often organize management departments by channel. There’s the mobile team, the e-Commerce group, the brick-and-mortar operations department. Each department develops their own content, plans their own promotions, uses their own technology and reports to different bosses independent of each other. The trouble with this common scenario, though, is that the retailer’s shopper does not differentiate between channels. These invisible differences on the back-end do not change the shopper’s expectations of its relationship with the brand, but can disrupt the consistent experience shoppers anticipate. Consumers expect the same value, selection, quality, service and overall positive experience across all of the selling channels available to them.
It is more critical than ever to deliver on your brand promise, and not just in the store. A seamless omni-channel experience rewards loyal customers and inspires confidence to shop with you again in the future. And with the unlimited choices online shoppers face with even where to shop, much less the infinite selection of product on e-tailers’ endless aisles, winning repeat business in-store, online and on mobile devices is of utmost importance to a retailer’s success.
Retailers and e-tailers must think like their customer. When your customers shop with you, which channels are they shopping? What is their path to purchase—are they shopping online before or after a store visit? How near or far do online shoppers live to the closest physical location?
Based on these factors, and with customers’ expectations in mind, retailers should evaluate and optimize the following areas to deliver a world class, seamless brand experience at every customer touchpoint:
1. Price and promote consistently across channels. Technology-savvy shoppers are often flummoxed when they find that the price in-store is different from that online. To save the in-store sale, retailers should implement price-matching policies with themselves—the store will match the online price. Integrating technology across different channels’ marketing and sales team can create complimentary pricing policies that reflect similar promotions. Cross-channel pricing is too complex a topic to delve into in-depth here, but it is an area the most successful omni-channel retailers have mastered, and one that all retailers should consider seriously.
2. Offer online shoppers the ability to return merchandise in-store or with a pre-paid returns shipping label for a convenient, hassle-free experience. A return is almost always an experience at least bordering on the negative—perhaps the shopper realized they cannot afford the merchandise, the product was damaged in some way or did not meet the customer’s quality expectations, or the fit was wrong. One of the best ways to deliver a seamless omni-channel experience is to integrate your backend technology and separate digital channels with your traditional brick-and-mortar stores and in-store technology. Allow online shoppers to return merchandise, even online-only merchandise, to the store, and explicitly state this in an easy-to-understand returns policy. This integrated solution would allow for instant or early credit on returned merchandise purchased online but returned in the store, so the consumer is open to buy again onsite and primed for a sales associate to upsell on the original order. An integrated system would also allow online shoppers to print a returns label in the store to send the merchandise back to warehouse. These expedited returns not only benefit customers, they also benefit the retailer by reincorporating the merchandise back into inventory, hopefully before markdowns are made, while a unified inventory system across all channels gives retailers one true version of data from which to base decisions. For the customer that wants to return from home, offer a best in class pre-paid USPS SmartLabel® for a convenient, hassle-free experience. With an intergrated eCcommerce returns label, retailers can leverage email and text notifications to communicate with customers to mimic the up-sell, cross sell and loyalty promotions that your consumers experience when interacting with in-store trained associates. Never lose the power of valuable customer interaction regardless of what channel is used to return merchandise.
3. Deliver the same level of customer service across all channels. Customers expect to be treated well no matter where or how they shopped. If you’re a retailer with a strong reputation for delivering excellent customer service in-store, do not skimp on providing the same level of service to your online, mobile and catalog shoppers. Evaluate your call center capacity and procedures—how long is the wait time? Are your in-store sales associates more knowledgeable or better trained? Is there a language barrier? How often do call center representatives issue refunds versus correct the order to save the sale and capitalize on the customer contact to up-sell? An honest evaluation of customer service across all channels can go a long way in consistently delivering on your brand’s promise.
Consistency across all customer channels and touchpoints is the key to satisfying shoppers’ expectations. Positive shopping experiences can create a positive ripple effect across the enterprise, possibly resulting in new customer acquisition and customer retention, reduced call center volume, improved inventory management, better labor planning and more efficient operations, all of which reduce cost. Breaking down organization silos between sales channels not only streamlines enterprise operations, but better enables retailers and e-tailers to deliver exactly what shoppers expect—a seamless omni-channel experience.
Canada is much like the United States in many, many ways, though there are a few key differences within the respective retail industries. Not only do grocery stores sell milk in plastic bags instead of plastic jugs or cardboard cartons, Canadian shoppers also face a limited selection when shopping online with U.S.-based retailers due to restrictive shipping policies that do not accommodate shipping to Canada.
Newgistics believes this is an opportunity for, not a weakness of, U.S.-based e-commerce merchants and multichannel retailers. In this two-part blog series, originally featured at RIS News, we’ll share six key principles U.S.-based retailers should keep in mind when considering the expansion of shipping into Canada.
Reaching a ripe, untapped market
Eighty two percent of Canadians reported having shopped online by October 2011, and the rate at which Canadians click to buy is rising rapidly—Canadians spent C$16.5 billion ($16.0 billion) in online sales in 2010, and this is expected to double to C$30.9 billion ($30 billion) by 2015. Eighty three percent of online shoppers purchased goods through Canadian e-Commerce merchants, while only 60 percent reported they purchased from U.S.-based retailers or brands. The time is right for U.S.-based companies to tackle international shipping to Canada.
#1: Keep deliveries timely and cost-effective
Canada is massive, but fortunately for U.S.-based retailers, 75 percent of Canadians live within 100 miles of the U.S.-Canada border. As a result, Canadians across the country expect competitive transit times for U.S. goods at cost-effective rates. Target delivery times should be within 3-7 days to all Canadian provinces and territories.
#2: Simplify the returns process
One of the biggest hassles for online shoppers is when they decide a purchase must be returned for any number of reasons. This negative experience—a shirt that doesn’t fit, or a lamp that arrived broken—is a critical moment for an e-Commerce merchant, and they can reduce a customer’s inconvenience by simplifying the returns process. Make returns easy and create the opportunity to build loyalty by providing your Canadian consumers with a prepaid return shipping label, available in the delivery package or online, to be attached to the order and returned via any Canada Post location.
#3: Minimize Customs headaches
International shipping is complicated by the customs process, which includes taxes and duties and the reclamation of taxes and duties on returns, currency exchange, and product import restrictions. Eliminate paperwork problems and accelerate the process by providing documentation to customs before the shipment reaches the border.
Though the sales growth possibilities are quite lucrative, it is no small decision to begin shipping to Canada. However, the process need not be overwhelming for retailers and e-tailers. Stay tuned for the final three key principles to efficiently make the expansion into Canada, from handling returns and transit time to customer loyalty and shipment partner relations.
Last week we took a look at three steps merchants can take now to prepare for a busy holiday season of sales and returns. In the second part of this two-part series, we’ll take a look at two additional tactics retailers can deploy before the real madness starts that will help alleviate both retailers’ and consumers’ holiday shopping and shipping headaches:
Examine the customer experience from purchase to delivery. A thorough review of web, mobile and in-store paths to purchase all the way through the potential returns process can expose areas where customers are more likely to experience confusion, frustration or delays. One common area of customer frustration is subpar website performance during peak shopping times, so merchants should measure and improve site performance ahead of the holidays to increase conversion rates online.
Additionally, the lag time between purchase and delivery is a good opportunity to communicate with customers and build ongoing loyalty. Each shipping event is an opportunity for merchants to reach customers in new ways with personalized, branded messages based on specific actions. In the case of merchandise returns, branded alerts can notify customers when a return has been received and when the refund is issued, creating a better brand experience and increasing the likelihood of repeat purchases.
Keeping customers in the loop doesn’t only benefit consumers—it provides door-to-door tracking visibility. The data races back to the retailer ahead of the return package, alerting the retailer to potential issues with quality, sizing, or any other number of problems, in time for buyers and planners to make sale-saving adjustments and negotiate vendor concessions. Better data can also improve labor planning, inventory management and asset-recovery rates.
Process refunds and store credits as quickly as possible. Another common area of frustration and anxiety for customers is the wait to receive a full or partial refund or store credit once the merchandise has been returned. Merchants should measure the current wait time to receive a credit and review the processes in place that could delay this transaction, though a quicker and less expensive fix is to communicate often and clearly with the customer.
Peak season will always be a hectic time for merchants, but applying these two principles to your operations can help ensure a smoother holiday sales and return season, while creating the kind of customer experience that drives repeat purchases.
eMarketer recently reported that online holiday sales will increase by 17% this year, according to Internet Retailer – another sharp increase over last year.
And while the projected sales increase bodes well for merchants, it also means they can expect a heavy returns season. This will almost certainly be the case this holiday season, when U.S. shopper are expected to spend $54.47 billion online, setting the stage for a record rate of returns. In this two-part blog series, we’ll talk about how merchants can get ready for another peak season of heavy sales and returns.
While most pre-holiday planning involves striking the perfect balance among inventory, increased traffic in-store and online, and competitive promotions, a few easy steps in advance of the holiday madness can help ensure post-holiday preparedness as well. Here are the first two of four steps that merchants can take now.
Review your returns policy. Is it clearly stated and easy to understand? Is it no-hassle for customers? Does it enable multichannel return capabilities? Does it include a controlled method for collecting data? If necessary, a returns policy review ahead of the holiday rush can speed things along at customer service without increasing the demand on staffing, while reducing wait times and improving customer satisfaction.
Make the returns process easy for consumers. Returns of mobile and online purchases present new reverse logistics complexities for merchants, as well as potential challenges for consumers. On the consumer side, merchants can eliminate much of the hassle by providing a pre-paid, USPS-based return label with each shipment. Not only do pre-paid return labels reduce customer frustrations with the parcel returns process and improve satisfaction, but merchants can also choose to deduct the return shipping cost from the refund, or charge a small premium for the use of the service, resulting in an additional opportunity for incremental income.
The sheer volume of sales during the holidays will always challenge retailers, but applying these two simple best practices can help avert problems before they occur, reducing operational issues on the back-end and improving the customer experience.