In Internet Retailer’s April cover story “Diversifying delivery,” editors Paul Demery and Allison Enright explore the world of e-commerce delivery. Given Newgistics’ long history and unique approach to parcel delivery, this is a world we know well and we were glad to see a top trade publication give the issues happening within this space – such as recent rate increases and the shift to dimensional weight pricing (DIMS) – the attention they deserve.
The article centers largely on how these changes are affecting Web and multi-channel merchants, calling out the pain points that are leading these companies to rethink their shipping strategies. As CleanBoutique.com’s co-founder, Amin Harari, is quoted as saying, the national carriers “almost purposely make their rate grids and contracts difficult to understand… Every day there’s a new fee or excuse to upcharge you.”
The article includes a prime example of how much the shift to DIMS pricing can affected a retailer. The changes have nearly doubled shipping prices on one of BabyAge.com’s most popular products – a pregnancy pillow – from its actual 10-pound weight to its new DIMS weight of 18 pounds, based solely on the size of the package.
Chris Halkyard, chief supply chain officer and general manager of distribution services for Gilt Groupe was also interviewed. He discusses how the challenges of the 2013 holiday season left him looking for cheaper shipping options, as well as a way to not have all of Gilt’s eggs in one proverbial basket.
These retailers understood that there had to be a better way.
For some retailers, this means turning to alternatives to the national carriers. Gilt, for example, recently shifted nearly all of its ground shipping business – roughly 20,000 packages a day – to Newgistics. Now, these packages are carried through our ground network and are handed off to the U.S. Postal Service for final delivery. The savings associated with this switch allows Gilt to offer more free shipping promotions and better discounts, a choice Halkyard sees improving Gilt’s customer lifetime value (LTV). Harari and CleanBoutique.com have diversified their shipments as well, sending about half of them through Newgistics now.
You can learn more about what’s driving the changes among carriers and how e-retailers are responding in this month’s cover story Diversifying Delivery, as well as the online article “Gilt diversifies its shipping strategy.”
E-commerce has taken “window shopping” to a whole new level. It’s become so easy for shoppers to compare products by skipping from one online store to the next that getting them to stay on your site and actually make a purchase is becoming increasingly more difficult. Here are five tips to help customers stay on your site and convert from shoppers to buyers.
The Austin American-Statesman has named Newgistics a Top Workplace multiple times over the past few years, so we thought it would be worth giving you, our friends and followers, an inside look at what makes the company so great. Here are the five factors that top our list:
5. Innovation – From the top executives down to everyone else within the organization, Newgistics employees are encouraged and given the tools they need to innovate and find better ways of doing their job.
4. Recognition – People shouldn’t just be given feedback on things they need to improve, they should be told what they’re doing well too. Newgistics takes this a step further by regularly calling out our MVPs to give them the credit they deserve and provide an example for others to emulate and learn from.
3. Responsibility – Our team is encouraged and empowered to take on the challenging projects they want to tackle. For example, our engineering team is given the freedom to explore new technology areas so they can apply these cutting-edge technologies to solving business challenges for our clients.
2. Rewards – In addition to competitive salaries and benefits, our team is rewarded for a job well done through things like trips to the Caribbean for winners of our MVP awards. Perks such as free food in the kitchen don’t hurt either!
1. People – Time and time again, and in all different forums, when our employees talk about working at Newgisitcs, they cite their colleagues as one of the top reasons they like coming to work every day. The smart, talented and driven people at Newgistics are, without question, our best asset.
Back-to-School Shopping is a Year-Round Activity for Digital Natives
Last week, the National Retail Federation (NRF) released the results of its annual back-to-school spending survey. Total back-to-school spending is forecast to hit $74.9 billion in 2014, up from $72.5 billion last year. The average family with children in grades K-12 will spend $669.28 (up 5 percent from last year) and the average back-to-school spending for a college student is expected to rise 10 percent to $916.48.
According to the NRF survey:
In addition to NRF’s findings, Cassandra Report revealed that 54 percent of shoppers will do more pre-purchase research than they did just five years ago. And, in a recent study of back-to-school shopping habits, eMarketer found students and parents start researching their back-to-school needs long before stores notice an uptick in purchases – last year 23 percent began back-to-school research before July 4, with nearly two-thirds (65 percent) starting by the end of July, according to a Google/Ipsos study of the 2013 season.
With the shopping season in full swing, retailers need to be sure they are meeting the needs of consumers looking for inspiration online. The NRF suggests, and we agree, that visual imagery and user-generated content are powerful influence factors as shoppers conduct their research. Photography is what sells the product, so spend the time and money to create great imagery. In apparel, a popular back-to-school category, make note of the size the model is wearing and offer five times the normal zoom so shoppers can see product details. And, don’t forget the power of online video in increasing digital conversions. We also suggest clearly articulating shipping and returns policies online (how long do shoppers have to return an item, will the money be refunded to the card used or offered as a store credit, etc.). This increases the comfort level in making digital purchases, especially for high-consideration, big ticket back-to-school items such as electronics.
Is your back-to-school strategy meeting the needs of shoppers looking to digital channels for inspiration this year? If not, there’s still time. According to the Google/Ipsos study, “As mobile natives with near-universal access to the Internet, teens and college students are shopping throughout the school year and are less reliant on parents or friends for rides to the mall to do their shopping.” This is great news for retailers targeting teens and college students as they can extend the “back-to-school season” year-round. Even though a prolonged season being the new normal, now is the time for them to develop a strategy for providing inspiration via Instagram, Twitter, Vine and other social channels, as well as on their own e-commerce sites.
It’s been a busy couple of weeks for Newgistics! Two weeks ago we made three major announcements:
Guest blog by: Jeff Ketner
They don’t call NRF “Retail’s Big Show” for nothing! Year after year, it’s great place to connect with retail’s leading editors and analysts. I asked a number of my friends in the editor and analyst communities to share their insights about NRF, and you’ll be interested in seeing their thoughts on retail trends, technologies, and the biggest surprises of 2012.
What will you be looking for at NRF 2013, in terms of retail trends and technology?
Jordan Speer, Editor-in-Chief, Apparel Magazine: Generally, I’ll be looking for technology that apparel retailers/brands are using. In particular, I’ll be interested to see how things continue to integrate to make a seamless omni-channel experience possible. It’s difficult for me to think of distinct technologies these days. It all goes together: Social media is connected to CRM is connected to loyalty is connected to POS is connected to mobile is connected to RFID is connected to fulfillment and so on and so forth. I’ll be looking for ways in which retailers are casting off the barriers between all of these solutions and getting the big picture of their enterprise.
Paula Rosenblum, Managing Partner, Retail Systems Research: What I’m looking for is practical usability of technology. I have been hearing a lot of buzzwords – “mobility,” ”the customer as part of merchandising processes,” “Big Data” (my current fave), “Cloud.” So what I would like to see is the nitty-gritty of what it takes to actually get the job done. For example, “What does the user interface in a system that includes the customer dimension of data look like?” “How do you manage 30,000 iPhones and iPads in your stores?”
Joe Skorupa, Group Editor-in-Chief, RIS News: I am looking for technology strategies and solutions that are responsive to the dramatic shifts taking place in the marketplace as well as those that enable retailers to become more pro-active and get ahead of fast-moving trends.
Debbie Hauss, Editor-in-Chief, Retail TouchPoints: I am expecting to see more advanced solutions that address the data collection and analytics related to Big Data and omnichannel retail. Retailers like Macy’s are starting to focus more on allocating by individual store, based on the demographics and seasonality of each store. New solutions need to provide an easy way for merchants to make this happen.
I also anticipate more solutions targeted to mobile payments, and the requirements around EMV. Retailers need to be prepared to accept EMV when the April 2013 deadline rolls around. Additionally, by October 2015, fraud liability will shift in the marketplace, which could be an incentive for merchants to enable EMV transactions before that date.
Greg Buzek, Founder and President, IHL Group, and Co-founder of the Retail Orphan Initiative: I think we’ll see a lot of emphasis in three main areas. The rise of Big Data and Social integration will be a major trend. Mobile will be everywhere – in all flavors – iOS, Android, Windows 8; we will be past our first mobile Christmas. And then there are the rapid changes in the POS industry. We are seeing a seismic shift right now in threats to this business and a changing of the guard in established competitors. And of course everyone will be talking about how great Retail ROI’s SuperSaturday was!
What were the biggest surprises in the retail industry in 2012?
Joe Skorupa, RIS: This is the year of bold transformation of business models and instead of taking a cautious approach or battling it, retailers are embracing change and finding new opportunities.
Greg Buzek, IHL: The biggest surprise is the speed in which retailers have come out and said they are never buying another POS terminal again. We haven’t even seen mobile survive a Christmas rush, and several retailers have already said they are all mobile from now on.
Jordan Speer, Apparel: I think the big surprises for me are the increasing shift to the “fulfill-from-store” model and also the sense that, in apparel, we are really on the edge of seeing technologies like “magic mirrors” and such start to materialize at the commercial level. One other thing – it has really hit home with me this year just how much Amazon truly presents a major threat to so many retailers. I am glad that many of them are addressing that and will be interested to see some of the clever ways that retailers use product and technology to keep customers in their brick-and-mortar or online stores.
Paula Rosenblum, RSR: I suppose it’s the explosion of mobile payments – or the apparent coming explosion. Starbucks adopting Square and Home Depot adopting PayPal was a pretty big surprise. Beyond that? That wireless is still just not prevalent. And overall in the industry, that the luxury market is softening. I honestly don’t understand why it’s happening.
Jeff Ketner is president of Ketner Group PR + Marketing, a boutique PR agency in Austin, Texas specializing in retail technology and high-tech PR and marketing. This blog post originally appeared on Ketner Group’s KBlog.
The U.S. Postal Service is making a variety of pricing and classification changes that will go into effect January 22, 2012, including a price increase for all parcels, revised addressing requirements for Non Flat-Machinable parcels and the inclusion of Delivery Confirmation in the price of a variety of products.
As a collaborator with the USPS, Newgistics is committed to keeping you up to date on regulation changes that will affect products you ship. A partial list of upcoming changes is below. Please look closely at the individual weights, zones, and physical material you mail. The averages can be substantially different than the actual impact in particular classes and weight breaks.
For detailed tables go to USPS.gov or contact your Newgistics consultant for counsel and guidance during this transition.
Standard Mail Parcels
• Standard Mail parcels and Not Flat-Machinable parcels are currently grouped in a single product classification known as Standard Mail.
• The USPS is moving Standard Mail parcels (both machinable and irregular) to the competitive product category and renaming the product Parcel Select Lightweight, which will be priced by ounce. Delivery Confirmation will be included in the price for this reclassified product.
Not Flat-Machinable Parcels
• Not Flat-Machinable parcels will remain in the market dominant product category in the Standard Mail classification, but will be renamed Marketing Parcels.
• Marketing Parcels will require an alternate addressing format such as “or Current Resident” in the addressee line. These parcels will continue to be priced with per-piece and per-pound rates. Parcels without the “or Current Resident” addition to the address must be treated as Parcel Select Lightweight parcels. The maximum size for Marketing Parcels will be 12” x 9” x 2”. (Currently, the maximum size for Not Flat-Machinable parcels is 15.75” x 12” x 1.25”.)
• Ancillary service endorsements such as “Return Service Requested” cannot be used with Standard Mail Marketing Parcels.
• Nonprofit Standard Mail parcels (both machinable and non-machinable) will remain in the Standard Mail classification.
• Dimension requirements for machinable parcels are also changing with the reclassification. Machinable parcels will now be defined as 27” x 17” x 17”. (The current dimensions are 34” x 17” x 17”.) This change will impact all parcels.
Label and Address Rule Changes
• The products whose names are changing must have new labels printed showing the correct product name: Parcel Select Lightweight and Standard Mail Marketing Parcels
• Standard Mail Marketing Parcels must include “or Current Resident” on the addressee line. Example: John Doe or Current Resident / 123 Main St. / Austin, TX 78746
• For your information, Delivery Confirmation will now be included in the price for First-Class Package Service, Priority Mail, Parcel Select, Parcel Select Lightweight and all Merchandise Return Service products.