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Five Costly Ways Retailers Waste Money During Fulfillment (And How They Can Stop)

Ralph Shulberg
June 06, 2023

The next few months could be rough for retailers. With revenue growth slowing and profit margins shrinking, many are taking steps to slash costs. However, with last-mile delivery making up a staggering 41% of total supply chain costs, furniture and appliance retailers have an opportunity to quickly stop burning dollar after dollar due to inefficiencies and wasteful practices. 

 

Let’s explore the most common ways in which money is squandered during the fulfillment process and how it can be stopped.

1. Siloed Solutions Resulting in Errors in Customer Orders 

Mistakes in order processing, such as incorrect customer information, can result in costly returns, replacements, or cancellations. This often happens to retailers who use multiple, standalone solutions to “help” make the fulfillment process more efficient. The problem is, these solutions often don’t interact, and staff are forced to manually copy and paste customer information between systems. This not only burns dollars in terms of employee time but frequently results in human error. Bob Mills Furniture experienced this when it used several siloed solutions to manage its fulfillment process until it decided to make the switch to one unified solution to manage customer fulfillment.

2. Low Delivery Confirmation Rates

Low delivery confirmation rates are a telltale sign of substantial logistical inefficiencies. When customers fail to confirm their orders, it leads to surplus merchandise occupying valuable warehouse space, trucks leaving the depot half full, and disrupts the efficient scheduling of deliveries. Additionally, it results in wasted time as repeated efforts are made to obtain customer confirmation. Customers tend not to engage and confirm orders when they lack a voice in the process. This is why retailers who use two-way messaging solutions with customers see rates of engagement rapidly increase. This allows consumers to proactively engage and have back-and-forth conversations. The Dufresne Group (TDG) increased its delivery confirmation rate by 85% by seamlessly integrating an automated chatbot into the center of the delivery process.

3. Costly Delivery Scheduling

Inefficient delivery and transportation scheduling can lead to suboptimal route planning, underutilized vehicles, and unnecessary fuel costs. By automating the delivery routing process, the time involved will be significantly reduced, allowing employees to redirect their energy towards more intricate and high-value tasks. This proved to be a pivotal factor for Big Sandy Home Furnishings to make the switch to a single unified platform that enabled them to achieve a remarkable 40% reduction in routing and planning costs.

4. Failed Deliveries

Failed deliveries have consequences that extend beyond wasting gas and driver time. They contribute to warehouse congestion, potentially leading to damage during unloading and reloading for subsequent delivery attempts. Moreover, they place additional strain on the routing team, increasing their workload as rescheduling and planning become necessary. The reduction of failed deliveries yields a twofold impact: cost reduction and increased monthly delivery capacity, resulting in enhanced efficiency. This can be quickly accomplished by implementing automated scheduling, routing, and delivery operations while empowering customers to self-schedule according to their preferences. Stella Home Delivery successfully achieved a 10% decrease in failed deliveries by adopting a unified solution to address these challenges.

5. Poor Visibility of Customer Data

Furniture and appliance retailers often miss opportunities for cost optimization, process improvement, and customer satisfaction by lacking transparent access to customer data. Using one solution that centralizes all customer information gives retailers full visibility of the buyer journey making every interaction transparent across departments. This delivers data across sales, marketing, and customer service, through a centralized hub. Such data not only helps identify process improvements but can reveal upsell opportunities and provides a more seamless and faster customer experience. Centralizing customer data, for example, has reduced the time it takes Bob Mills Furniture to retrieve customer information allowing its team to resolve customer issues much faster, resulting in an increase of 84% for same-day resolution of customer problems.

Isn’t it Time You Made the Switch?

Relying on multiple disconnected solutions to manage the fulfillment process leads to unnecessary costs and inefficiencies. Implementing a unified solution empowered by AI and automation not only significantly enhances customer satisfaction and engagement, but eliminates inefficiencies and generates cost savings. And with the economic forecast signaling a difficult second half of the year, now could be the right time to make that switch. 

 

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