Retail Digital Transformation: The Path Through Logistics
Updated: Dec 30, 2021
In 2020, the global retail logistics market size was $ 205.44 billion. Today this figure owes much to robust software that runs tens of thousands of operations daily.
Meanwhile, lots of retailers still use legacy technology furtively thinking about modernization.
Here we discover how outdated applications like a delivery calculator can slow down your logistics and what you should do to prevent it.
Why Retailers Refuse To Use Legacy Technologies For Logistics
Logistics is the artery of a retailer operating in e-commerce. It should both sell quality products and deliver them on time to stay afloat.
Business understands it. That's why, following Retail Dive, investments in technology for logistics improvement nearly doubled on a year-over-year basis to $ 8.6 billion.
Let's take Amazon as an example. The company has invested over $ 1.5 billion to open a new air hub in Kentucky, US. This way, management wants to accelerate the delivery process and boost logistics. The Kentucky air hub will ensure same-day delivery for practically each US state.
Meanwhile, many retail representatives are just starting to invest in technology to perform a digital transformation.
The first thing that awaits an enterprise here is software migration/modernization, depending on the situation. A company identifies bottlenecks and tries to eliminate them. Usually, they include limited functionality and complexity of maintenance.
In particular, the outdated logistics module can:
not withstand an ever-growing load and fail
integrate poorly with internal systems and third-party software
lead to route confusion and delivery delays
provide the client with irrelevant information about the delivery time and price
All these situations harm a company's reputation and can provoke losses. But misleading a buyer at the checkout stage is also a violation of laws. It is what happens when the buyer sees the wrong delivery time and price near goods.
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Imagine yourself as a buyer-traveler who urgently needs a suitcase delivery. Your flight is the day after tomorrow, and there is nowhere to put your things.
You flip through the product catalog of a large chain store, hoping to find a suitcase that is possible to deliver today or tomorrow. Under each item, you can find the time and cost of delivery due to a digital delivery calculator software. Finally, you managed to find a product that the store can deliver tomorrow.
During communication with a contact center agent, you find out that the delivery will take 3 days. It's a software failure.
What are your actions? - At the very least, you will stop making purchases in this store.
By the way, the retailer may not be aware of such an issue with the delivery calculator. In this case, the increased number of calls in client support service concerning irrelevant delivery terms should be the first hint.
What opportunities does a company miss out on, continuing outdated delivery calculator usage? What risks is it exposed to?
loss of target audience
risks of being sued
no opportunity to establish and improve logistics business processes
lose to competitors who are constantly improving retail software for logistics
Often, upgrading existing software or moving to a new one becomes a reasonable solution.
What Delivery Calculator Software Can Support IT Infrastructure Transformation?
Once you decide to upgrade software, start thinking about approaches and implementation tools. When it comes to migration, your job is to choose the type of system. So custom or vendor one? Experience dictates that the answer lies in your business processes & needs.
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It is more crucial to understand what a suitable online delivery calculator should be to prevent the above outcomes.
In 2020 e-commerce sales were $ 4.213 trillion. As of today, it's $ 4.921 trillion. Be sure, despite periodic declines in online sales, this segment will continue to grow. It means your audience will get bigger and the assortment - wider. Your calculator has to display information for each SKU, regardless of how many people are viewing products.
The delivery calculator should display the accurate delivery time and price in real-time while viewing any SKU online. For these purposes, the software integrates with:
web portal - to determine a client's geolocation
warehouse system - to analyze whether the goods are available at a warehouse closest to the buyer
transport management system - to find out if the company has internal resources to deliver the goods as soon as possible
third courier services - in a case when a retailer cannot perform a delivery on its own
ERP system - to calculate the cost of delivery by parameters.
Thus, the product must be interoperable with key back-office systems. It will allow a real-time operation.
A delivery calculator should work equally well regardless of which device a customer uses. The system should adjust other software operations to each client's needs and look for the most convenient offers. And all this in a few hundredths of a second.
Choose technology that can provide a flawless customer experience and a higher buyer retention percentage.