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Delivering peak savings

By Retail Technology | Friday November 12 2021 | UPDATED 12.11.21

Metapack looks at three ways for fast-growing companies to cut cost-to-deliver this peak season

Ecommerce volumes are set to soar to even greater heights this peak season. In our most recent Peak 2021 delivery report, we’re predicting 11% year on year growth across the entire period.

If you’re a fast-growing company, more sales is great news. But if you don’t watch out, cost-to-deliver can quickly eat into your margins. After all, it’s the price of transporting goods direct to consumers that makes ecommerce a typically lower-margin business. In peak season, when overloaded carrier networks respond by implementing price hikes and surcharges, these margins tend to close even further.

Here are three ways for fast-growing retailers to optimise their cost-to-deliver and get the most out of this year’s peak season.

Automate and save using shipping rules

You don't have to be a large enterprise to save money on shipping costs – all you need is the right automation. For example, our own Shipping Software uses shipping rules to help our retail customer automatically select the right service to meet their own customers’ needs, all at the best price.

After your customer selects their delivery mode, the software checks and validates each service against the factors you tell it to. This could be based on location, delivery date, service type, warehouse cut-off, size and weights - or all of the above. After selecting the right service, Metapack’s Shipping Software generates a carrier label that complies in less than 300 milliseconds - much faster than typical competitor platforms.

Reduce missed deliveries with a broad range of services

There’s the cost of delivering a parcel, and then there’s the cost of delivering a parcel a SECOND time because it was missed on the first attempt. One is unavoidable, but the other is not. Missed deliveries can be avoided simply by providing a better range of delivery services.

According to our own data, missed deliveries dropped 43% in the UK between January 2020 and May 2021, as consumers were observing pandemic-related stay at home orders and more readilyavailable to accept packages. But as consumers around the world start to gradually return to their usual lifestyles, we’ll see missed deliveries rise again. Which is why ‘out of home’ delivery methodslike lockers, PUDOs and in-store pickup are growing in popularity.For example, customers who get their orders delivered to PUDOs or lockers won’t need to worry about missing their delivery when they get called into the office - they can just stop by the locker box at the supermarket on their way home.

It’s more convenient for the customer, but also for retailers, as ‘out of home’ delivery presents an opportunity to reduce the last mile of delivery - and cut costs – not only by reducing missed deliveries, but also by bundling multiple orders for simultaneous fulfilment.

Eliminate risk with carrier contingency

Delivery can bear multiple price tags. First, there’s the purely logistical cost of transporting goods from A to B. But then there’s the cost of a bad delivery experience, which can be significantly higher. Our research shows that more than 30% of customers would change retailers following a bad delivery experience. With customer acquisition costs higher than ever on ecommerce, losing hard-earned business is a cost you don’t want to get hit with.

During any peak season this risk is especially high, because you’re working with overloaded networks. This year the risk is even higher as delivery volumes are extremely volatile. When pressure is combined with uncertainty, then contingency planning is imperative. A key reason why retailers rely on Metapack coming into peak season is in order to access a full suite of carriers to safeguard their delivery proposition in case their usual network becomes overloaded.

Ecommerce may be a typically lower-margin business, but with online sales only going from strength to strength, overall news for the industry is good. The challenge for retailers of all sizes is to preserve margins by reducing cost-to-deliver. For SMEs, it can often feel impossible to compete with bigger players on delivery. However, with the right software solutions, fast-growing companies can prepare to scale sustainably this peak season, and beyond.

Find out more about Metapack’s predictions for peak in our Peak 2021 trends report.

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