What It Takes for Retailers to Remain Competitive in a Modern Shipping Market

Shifting consumer expectations are forcing companies to reevaluate their business models and invest more heavily in direct-to-consumer delivery.

Shifting consumer expectations are forcing companies to reevaluate their business models and invest more heavily in direct-to-consumer delivery.

In its 26th Annual Study of Logistics and Transportation Trends (Masters of Logistics), Logistics Management revealed some significant changes in the average company’s priorities and business strategies between 2016 and 2017. In the 2016 survey, 15.4% of respondents listed “cost leadership” as their primary business tactic, while 26.0% listed “customer service,” 7.9% listed “product/market innovation,” and 50.7% listed “mix: be all things to all people.” In the latest edition, these figures stood at 3.3%, 15.7%, 4.9%, and 76.1%, respectively.

The dramatic shift to a mixed business model can largely be attributed to evolving consumer expectations. Thanks to the rise of ecommerce, price isn’t the only variable in the average consumer’s calculus, and companies need to adjust their approaches accordingly. If the results of the study are any indication, they’ve adapted to these developments by becoming more responsive than ever to consumer demand.

The Importance of Fast, Reliable Shipping

Today’s consumers rely on two major criteria to guide their purchasing decisions: price and availability. However, especially in ecommerce and omnichannel retail environments, price and availability are typically order qualifiers — that is, the basic criteria which any product must meet — meaning that they aren’t what makes or breaks a sale.

More often than not, speed of delivery ends up being the decisive factor — the “order winner” — in a consumer’s decision. This ever-increasing emphasis on efficient shipping was reflected in the study’s findings, as spending on direct-to-consumer transportation flows increased from 37.7% of total transportation spending in 2016 to 46.2% of total transportation spending in 2017.

Meeting Consumers’ Shipping Expectations

Companies’ desire to “give consumers what they want” — namely, quick delivery speeds — reinforces the close connection between their shifting business priorities and a top-notch shipping program. Even though the percentage of respondents employing a customer service-driven business model dropped from 26.0% in 2016 to 15.7% in 2017, the percentage of respondents listing “increasing customer satisfaction” as their primary goal actually rose by 6.1% between 2016 and 2017. This increase indicates that many companies that have gravitated toward a “mixed” business model have done so to establish a more robust customer service infrastructure. In light of consumers’ strong — and often decisive — preference for compressed delivery timelines, it also indicates that efficient shipping is absolutely essential to the “mixed” business model.

Aligning Shipping Capabilities with Strategic Foci

Unfortunately, despite their best intentions, many companies continue to struggle to deliver their products as quickly as their customers want. After unsatisfactory supply chain analytics, “lead time to consumers” — that is, the speed of order fulfillment — was the second most frequently cited challenge faced by the study’s participants.

“For a number of companies,” the study notes, “there is a statistically significant gap between their strategic focus and organizational structure.” In other words, many companies are starting to prioritize customer satisfaction and rapid delivery, but most don’t have the infrastructure needed to realize these ambitious goals.

This is where a versatile and reliable logistics partner like Primary Freight can be tremendously useful. With nearly two decades of experience in the shipping industry, we have the resources and expertise necessary to help any company optimize their shipping operations and provide their customers with the short delivery timelines they demand. Regardless of your company’s needs, we can work with you to develop a specialized solution that addresses all of your logistical challenges without undermining your profitability.

If you’d like to learn more about what makes Primary Freight an ideal shipping and logistics partner, give us a call at (800) 635-0013 today.