Support Toll Free: 888-261-8282
Local: 479-717-2206
Email Support sales@otlusa.biz
Hours of Operation Office: Monday – Friday 8:00 – 5:00
Dock: 8:00 – 4:30

We can only strain the supply chain so much

We can only strain the supply chain so much

It is common sense that if you put too much strain on something, be it a physical object or a relationship, that thing will eventually break.

We believe that is determined to happen to the supply chain and we can already see the impairment happening in recent months. Retailers need to find other ways to entice customers without creating unrealistic expectations that will soon be too difficult to fulfill.

The interesting thing is, even Amazon, which many blame for creating the high expectations from customers, has been changing its tune in regards to rapid delivery in several ways. For months, the online retail giant has been offering incentives for choosing a later delivery date outside the usual Prime membership promise of two days. Then, enter COVID-19. Amazon has been so overwhelmed with orders that they are no longer promising two-day delivery for most items, usually those that are not deemed “essential”. The strain simply got to be too much, and they realized they could not possibly fulfill the promise of one- or two-day delivery for all its orders.

The Walmart Effect

You read that right. Before there was the Amazon Effect, there was the Walmart Effect. This article from 2018 describes how the Amazon Effect became the “new Walmart Effect.” First coined in the early 2000s, the Walmart Effect was essentially a description of how Walmart was able to lower its prices more and more, making it nearly impossible for smaller retailers, especially local mom and pop stores, to compete. Amazon’s ability to provide pretty much anything for affordable prices without the customer even having to leave the house.

We can’t all be Amazon

Amazon is already showing that it can’t deliver on promises for same-day and two-day deliveries for all things so it’s incentivizing and also simply no longer promising it as much as it used to. Even with those recent concessions, smaller shippers have known they can’t compete with the speed, but they can in other ways.

This article from December 2019 talked about how one-day delivery is squeezing the supply chain. The author suggested that smaller shippers use so-called competitive strategies to stay in the game.

“To counter the Amazon Effect, logistics providers will have to make their delivery experiences as frictionless as possible. However, this does not mean just offering faster deliveries but aiming to improve the overall delivery experience.

“For instance, you could offer an alternate pickup location with flexible hours. You could also consider offering discounted delivery for a minimum amount spent, or on specific products. Free shipping is still the number one option for online shoppers. Nearly half of all shoppers will add items to their carts to qualify for free shipping. While that service might come with initial costs, you are more likely to see a return in extra purchases. Since free shipping may not be possible with same or next-day delivery, providing affordable- but slower- options may help you win and retain customers,” it reads.

Looking to the future

We’ve already gone on record as saying that trying to move an increasingly large amount of freight in a decreasing about of time is not a good idea. It will drive up costs, increase danger, and creates an unachievable standard. We have become residential delivery specialists by providing on-time, well-communicated services that go beyond a simple “drop off and dash off” approach.

We know that customers have the expectation for rapid delivery, but that expectation was created and fed by Amazon continuing to provide it. The e-commerce wars are pushing companies to promise what ultimately, they won’t be able to deliver. We need take this time and reconsider what we offer and how we all capture and retain our customers.

 

Call Now