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How to Protect Against Recession: Drive Down Costs and Boost Efficiency

Ziv Fass
March 26, 2023

With last-mile delivery accounting for 41% of total supply chain costs, according to Accenture’s The Sustainable Last Mile report, furniture and appliance retailers need to protect themselves from the impact of the potential recession by significantly reducing inefficiencies in the fulfillment process.

This is critical with shoppers now more cautious about splashing the cash on big-ticket items, according to Walmart and Home Depot in a report by CNBC. It also noted that those consumers who purchase more expensive items are more likely to spend less and opt for cheaper, more affordable goods. 

As a furniture or appliance retail business, the last thing you want during economic uncertainty is to waste resources. In general, businesses that optimize the efficient and cost-effective deployment of resources will be those that are best placed to remain competitive in the marketplace when the economy dips.

Ditch Siloed Fulfillment Solutions 

If you currently use multiple, separate solutions to manage your fulfillment process and customer interactions, this is most likely losing you hundreds if not thousands of dollars every day due to inefficiencies. 

The scheduling of deliveries is a pain point for many retailers and takes up hours (and sometimes days) of painstaking manual labor. Unifying siloed solutions into one AI-powered, automated platform will save time and reduce costs due to the seamless integration with your overall operations. 

And because all of this data is stored within a single centralized system, delivery routes can be automatically set up and confirmed. Each delivery vehicle that leaves your distribution center will follow the ideal route to ensure cost-effectiveness, meaning management will no longer have to leave it to the whim of drivers. 

Save Time and Slash Costs by 40%

Automating the delivery routing process will not only slash the time involved but will free employees to focus their energy on more complex, high-value tasks. This was key for Big Sandy Home Furnishings in reducing its routing and planning costs by 40%.

However, be warned — depending on the solution, the automation of delivery scheduling may still result in inefficiencies. Using the industry standard delivery management solution, for example, means optimum results will be impossible to achieve. 

Ashley Furniture Franchisee DSG found that its last-mile delivery management solution resulted in departmental silos throughout the customer journey and specifically within the fulfillment process. It made the switch to Package.ai’s single platform that now seamlessly manages its customer engagement and logistics through automation and AI.

Be Wary of This Warning Sign

Poor delivery confirmation rates should be treated as a warning sign of significant logistical inefficiencies. When customers do not confirm orders the result is merchandise taking up unnecessary warehouse space and disrupting the smooth scheduling of deliveries. It also means time is wasted in further attempts to get the customer to confirm. 

Using AI-powered, fully integrated chat will have a significant impact on confirmation rates. Customers respond well to the ability to engage in interactive two-way customer communications. And engaged customers tend to be communicative customers. 

Retailers suffering from low confirmation rates will quickly benefit from the seamless integration of an automated chatbot into the center of the delivery process. The result will be higher confirmation rates and, ultimately, fully loaded delivery trucks ensuring more deliveries go out. 

Learn how the Dufresne Group (TDG) increased its delivery confirmation rate by 85% by placing an automated chatbot into the center of fulfillment operations. 

Focus on Reducing Failed Deliveries 

Failed deliveries result in more than just a waste of gas and driver time. Goods have to be returned to the warehouse, taking up space and potentially being damaged in the unloading and loading process for the next delivery attempt. They also place more pressure on the routing team as they add to the workload and need to be rescheduled and planned.

Reducing the number of failed deliveries has a dual impact — it lowers costs and allows more deliveries to be made per month, boosting efficiency. This can be quickly achieved by automating scheduling, routing, and delivery operations and ensuring customers are able to self-schedule around their needs. After implementing a single solution to achieve this Stella Home Delivery reduced failed deliveries by 10%.

Time to Make the Switch?

Using multiple, disconnected solutions to manage the fulfillment process is a major cause of unnecessary costs and inefficiencies. Retailers using the standard delivery management solution will be unable to make the necessary changes to ensure they are better prepared for a slowdown in consumer spending. 

They need to move from the old way of fragmented customer engagement, resulting in low confirmation rates and failed deliveries, to a fully engaged fulfillment experience that puts customers at its center. The result will be a single solution, where AI-powered and automated chat will radically increase customer satisfaction and engagement. This will optimize delivery scheduling while eliminating efficiencies and saving money. 

There is no better time than now to take action and start saving on operational costs while turning customers into brand advocates that keep coming back. Find out how Package.ai can help you achieve this —

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