Shipping and delivery has always been a hot topic for retailers, especially in recent years where new channels (ecommerce, mobile) have emerged in earnest. Thanks to services like Amazon Prime and Google Express, consumer demand has grown and competition is fiercer than ever. As more retailers offer competitive or even free shipping offers, the expectations and demands of shoppers increase, putting a strain on suppliers and shipping networks. While “free” for the customer, there are undoubtedly costs for the retailers and distributors ─ costs that are ultimately necessary to attract and retain customers. The pace and demand around shipping is one that, barring the acceleration of new technology and solutions, will only reach its limit and sometime soon.
For some categories, like furniture, shipping and fulfillment are already complicated enough, even before you introduce the ecommerce component. Here are some shipping trends we’re seeing and the impact of these trends on our brick-and-mortar furniture brethren.
Free Shipping is (Still) Kind of a Big Deal
Even in furniture, free shipping is still a big deal to shoppers. We can all thank Amazon, Target, Walmart and several other companies that offer competitive price thresholds for free shipping, which, according to the Forbes 2015 Customer Loyalty Engagement Index, contributes 15% to brand engagement (up a third from last year). We all know that in furniture, shipping is hard, and it requires an increased level of logistics management, service and, well, muscle. Unfortunately for all retailers, including those in furniture, shoppers don’t care that it’s hard – they still want their couch within days of their purchase. Our solution? Localized inventory management and integration. Thanks to the ways in which our existing furniture retailers fulfill store orders, online orders can work in the same way, and at a lower cost than shipping from a centralized warehouse or fulfillment center.
Will A Drone Deliver a Couch?
So it’s not quite the Jetsons-era future, but news of Amazon’s recent approval to start testing deliveries with its drone system (even if the current prototype submitted to the FAA is obsolete) makes me think that soon robots are going to take over the world. Apocalyptic predictions aside, how in the heck does a drone-based fulfillment system impact the world of fully assembled furniture? In the future, will a drone be able to deliver your sectional to you by the next day? With the increasing innovation around self-driving cars, it’s theoretically possible, even if there still needs to be a human element in order to serve furniture customers effectively. The kind of innovation that continues to happen in retail, occurring almost as fast as the innovation online and through other digital channels, is something that deserves the attention of furniture retailers. As shoppers’ demands align with these market innovations, furniture retailers must keep up with opportunities to grow their businesses.
The California Port Strike Will Impact the Furniture Industry for Longer than you Think
We know it’s not at all surprising to the furniture retailers out there that the California port strike made a big mess for many industries and that the home furnishings industry was no exception. What remains to be seen is the full impact of the strike. Already it’s known that the port disruptions have affected the trade deficit, which has larger economic implications. And, the current deal is still precarious. For furniture retailers, it could simply mean less product selection and fewer savings for their customers. Freight rates and a lot of wasted time need to be accommodated for somehow, and furniture retailers are likely analyzing how it has impacted their business if they purchase product from overseas. Those furniture retailers that keep a close eye on the distribution of their inventory and can plan accordingly should be able to weather this off-shore storm, at least temporarily.
The demand for “fast and free,” new drone technology and product sourcing are all issues to watch in 2015 as many furniture retailers take a closer look at their balance sheets and strive to avoid being left behind. This is, of course, assuming they have the time to try out new innovations and serve their customers’ requests for next-day delivery, all while building their own furniture-sized drones to get their products off of shipping containers.