Article courtesy of Commercial Appeal here
Ahead of what should be a record-breaking holiday shipping season, a FedEx executive wants customers to take care of their wish lists earlier than usual.
“Our public service announcement is we encourage everyone who’s planning to do their holiday shopping online to shop and ship early,” said Bonnie Voldeng, vice president of FedEx Freight Direct, during delivery platform Bringg’s “Holiday Retail Success” panel Wednesday. “The earlier, the better.”
The panel focused on tips for retailers to improve their last-mile delivery operations during the holiday season as online orders increase. FedEx is expecting a busy peak season, looking for 70,000 new employees to help its network during the holidays. This comes on top of the already elevated package volume it’s seeing due to the COVID-19 pandemic — in its most recent quarter, average daily volume at FedEx Ground increased by 31%.
More packages mean less space on couriers’ trucks. Delivery providers are expected to be 5% over capacity this holiday season, according to a Bringg presentation, citing Salesforce data.
Many retailers are branching out from traditional shipping providers like FedEx and using localized delivery services like DoorDash, Instacart, Uber and Lyft, said William Kammerer, supply chain leader for Deloitte Consulting LLP's retail and consumer products practice, during the panel.
FedEx’s various in-store pickup locations, including at FedEx Office, Dollar General and Walgreens stores, can reduce the strain on last-mile delivery capacity and pare down fulfillment costs, Voldeng said. Retailers could introduce promotions that incentivize customers to buy online and pickup in a store, she added.
Timing is also an important factor for effective shipping. Voldeng recommended merchants move up their promotional events earlier this year to avoid shipping surcharges that take effect later in the peak season, in addition to having sales events mid-week rather than on the weekends.
“Shipping demand is usually highest on Monday, so promotions launched over the weekend have the potential to be problematic,” Voldeng said.
Bundling orders into one shipment reduces fulfillment and shipping costs “significantly,” Voldeng said. Besides discounts for in-store pickups, retailers could also offer discounts for customers willing to consolidate their orders into one shipment rather than having each item reach the destination at different times.
Online ordering, in-store pickup popular amid pandemic
People continue to shop more online even as brick-and-mortar stores reopen. According to data Monday from marketing company Emarsys, U.S. online shopping orders for retailers in the past seven days are up 29% from the year before. For pure e-commerce companies, U.S. online shopping orders are up 57%.
The influx of packages has led to some delivery delays in FedEx’s network. Company executives have expressed confidence that strategic investments, such as the expansion of FedEx Ground’s Sunday home delivery service and increasing Ground’s network capacity, will help FedEx handle the volume surge.
Beyond capacity constraints, distribution centers are also facing pressure to fulfill orders while adapting to COVID-19 safety measures like staggered shift times, Kammerer said.
FedEx Freight Direct, which Voldeng leads, has also made COVID-19 tweaks like suspending in-home delivery in March. Direct has since resumed its residential services, with drivers and delivery assistants wearing masks and gloves inside homes, per FedEx. The service delivers large shipments like appliances and sporting equipment directly into homes or businesses.
Curbside and in-store pickup demand “has been tremendous” during the COVID-19 pandemic, Kammerer said. However, he added many shoppers will send Christmas gifts directly to recipients’ homes rather than give it to them in-person this year.
“We’re all not going to be getting together for the holiday season, so this is going to put even more of a strain on retailers to be able to handle multiple delivery mechanisms,” he said.
Managing consumer expectations on delivery times and “overcommunicating” in regard to product availability and shipping status will be important during peak season, Voldeng said. Disclosing shipping deadlines and adding disclaimers “to avoid overpromising” will help them have a better experience, she added.
"When it comes to their orders, customers would rather have too much information than not enough," she said.
FedEx is also working with its major e-commerce customers on smoothing out demand spikes during the holiday shipping season, Chief Marketing Officer Brie Carere said in September. Similarly, a DHL Supply Chain executive said the company wants to “flatten the curve” of peak season volume by stretching out demand over a longer period.