By Paul Tyson, commercial director at ArrowXL
According to forecasts from certain industry commentators, the retail sector looks set to continue battling difficult market conditions throughout 2018. In response to these predictions, it is likely that we will see many organisations look to reduce their overheads.
However, whilst reactive cost saving initiatives traditionally make negative reading, there are now a number of exciting outsourcing opportunities available for retailers to exploit, including across their transport and logistics functions. This is not only helping to save costs, but also improving the levels of service provided to the end customer.
The growth in shared user platforms
Traditionally, retailers preferred to operate their own costly transport and logistics networks – for both one-person (packets and parcels) and two-person deliveries (furniture and appliances) – due to their reluctance to lose control of their delivery function by outsourcing to a third-party supplier. By keeping this in-house, retailers were assured of maximum visibility over operational performance and customer service levels. For those businesses with substantial capital, it was believed to be the safest option.
However, the growth of innovative technology has now made it far easier to integrate and communicate with suppliers, as well as to monitor and analyse performance. As a result, we are now seeing more retailers contemplate a switch to a shared user platform, where a logistics partner handles deliveries. This approach, which sees the supplier carry numerous products from different retailers within the same trailer to maximise efficiency, offers companies the opportunity to make considerable cost savings. It is particularly attractive to those businesses selling larger items that require a specialist two-person delivery solution, which is more expensive to operate than a standard courier network.
As well as saving money, retailers joining this growing trend are also reaping the additional benefits of working alongside a third-party supplier, which includes improved flexibility and scalability, access to innovative systems and software, extensive resources and specialist knowledge.
Increased flexibility and managing peak demand
By switching to a shared user platform, such as that offered at ArrowXL for two-person deliveries, retailers will primarily benefit from an increase in flexibility and the capability to efficiently scale up and down operations upon demand. A historic problem for those retailers operating their own logistics networks has been ensuring they have the necessary capacity to handle extra volumes associated with peak trading periods, whilst maintaining a profitable fleet during other times of the year. Typically, retailers would require high levels of capital outlay to ensure their fleets could cope with growing volumes being driven by peaks such as Black Friday, only to see significant parts of this expensive network lay dormant during quieter periods.
A shared user platform solves this problem and we go to great lengths to help retailers comfortably cope with spikes in activity. During busy periods forecasting calls between our operational teams and our clients will take place several times a day, where we agree the number of trailers required for the anticipated volumes. Due to constant investment in own our fleet and infrastructure we can also typically provide around 10% flexibility in these volumes, which provides added peace of mind for our clients at busy times of year.
This approach will also help those retailers whose peak seasons constantly vary. For instance, the key trading period for companies selling barbecues and garden furniture will fall during the Easter weekend, which changes each year whilst also being subject to the weather. As long as regular forecasting and effective communication remains in place, retailers utilising a shared user network will benefit from a more efficient operation.
In a fast-paced world where the everyday consumer is becoming increasingly demanding, it is vital for retailers to offer professional and timely communications. When making the switch, retailers can enjoy the latest innovations being developed by carriers, without making their own investment. This includes our award-winning AskAxl application, which provides customers with visual tracking of the delivery vehicle whilst dynamically reducing the ETA window from two-hours to just 30 minutes.
Access to the right people
Another key consideration for retailers considering a switch is the potential savings they will make on their workforce, both within the office, throughout the warehouse and on the road. For instance, those companies operating their own logistics networks will more often than not have a requirement to manage their own customer service teams, who will handle bookings and delivery enquiries from consumers. However, at ArrowXL, this element forms part of our extensive service offering.
For example, we currently deploy two dedicated people from within our Customer Experience Team to exclusively handle any enquiries on behalf of one of our key clients, Swoon Editions. Whilst they remain ArrowXL staff, the employees are fully integrated with the client’s team and take instruction from the retailer directly. In addition, we also employ a dedicated Contract Manager and Warehouse Client Manager to ensure the day-to-day operations run as smoothly and efficiently as possible for Swoon Editions.
Retailers making the switch are also benefitting from access to the supplier’s pool of drivers, whilst avoiding the stress of recruiting delivery crews in an industry already suffering from a driver shortage. They will also make savings on the specialist training they will require to deliver large and heavy products to within a consumer’s home. Not only are our delivery crews highly skilled in fulfilling deliveries to a room of choice, but they have also received training that allows them to carry out installation or assembly in the home. This provides a fantastic way for retailers to provide added value to their consumers without being faced with high training costs.
This was a key reason behind Smeg UK’s recent decision to move to a shared user platform and utilise ArrowXL’s Platinum service for UK-wide deliveries of its larger products, including its iconic range of refrigerators and freezers. As well as specialist delivery and in-home solutions, we also provide an efficient Waste Electrical & Electronic Equipment (WEEE) recycling service for those customers requiring the removal of any white goods being replaced.
Commenting on the news, Robert Ponting, operations director at Smeg UK, said: “ArrowXL’s commitment to providing the very best customer experience shone through during a competitive tender process. We were thoroughly impressed by the development of the AskAxl app, which enhances consumer convenience and control. This ambition ensured that ArrowXL was the natural choice for Smeg UK.”
Creating a level playing field
A shared user platform also provides smaller or independent retailers with the perfect opportunity to compete with their larger competitors. By giving SMEs the option to outsource the delivery element of their business – and to enjoy the same highly trained workforce and consumer-facing technology as their larger competitors – they will enjoy access to a more level playing field.
As a result, they will be able to offer their customers a first class delivery solution without the high levels of capital outlay and the necessary expertise to develop their own internal infrastructures.
Choosing to outsource any type of process or service can be a difficult decision for retailers, regardless of their size. However, when it comes to logistics and transportation, the opportunity to benefit from a supplier’s extensive experience, knowledgeable and highly trained people, plus their dedicated processes and systems, can make a real difference. A shared user platform leads to a streamlined operation and reduced costs, whilst mitigating risk and enabling retailers to be braver when planning for the future.
(A Retail Times’ sponsored article)