As online retail continues to grow, the transport and logistics sector is booming. At the same time, however, energy, material and personnel costs are rising, and processes are becoming more complex with multiple internal and external points of contact. How can e-commerce businesses respond and make their process faster and leaner?
Twice as many shipments – and more pressure on margins
As the volume of orders and the number of foreign markets that businesses serve increases, so does the level of complexity – and the transport and logistics costs. In other words: the number of internal and external points of contact needed for the various logistical aspects usually increases with each additional country that an online shop sells to.
For an online shop expanding into France, for example, it would mean an additional country manager, additional marketing activities, additional logistics partners, additional delivery channels, an additional software landscape, additional dashboards and additional staff on the operations team to take care of typical logistics issues, to name just a few things. The result? As the number of contacts multiplies, it is almost impossible to benefit from economies of scale.
Cost optimization frees up capital
When it comes to cost awareness, companies often solely make use of traditional cost-cutting measures, such as economies of scale in purchasing. This makes it all the more important to exploit unused potential, such as reducing the number of contacts and the associated costs. As e-commerce grows it will be especially important for companies to try bold new approaches to cost reduction, instead of relying solely on the conservative approaches taken in the past. This includes rethinking current business models and leveraging disruptive technologies to achieve attractive efficiency gains.
Because logistics and transport costs are not (yet) passed on to the end customer in all cases, these fixed costs can weigh heavily on margins. This makes it all the more important to actively seek ways to cut costs in the delivery chain. So, how can retailers save money? Below, we highlight some of the main methods.
Cost optimization method 1: gain efficiency via a local carrier network
From Croatia to Sweden, and from Portugal to Poland: there are more than 100 companies offering parcel delivery services in Europe – and they are as diverse as the consumer behavior of the people in the individual markets. With so many participants, it can be difficult to know which ones specialize in which region, or which ones provide the services you need.
Extensive knowledge of the specific markets can help you find the right partner and the most suitable logistics service for your business model. The Seven Senders helps you make the right choice. Via a standardized interface, we connect you to our delivery platform and thus to more than 100 last-mile carriers who are able to fulfil your exact requirements in the target market. As an added bonus, delivery times can be cut by up to one day thanks to direct injection into the local delivery network. This improves the customer experience and gives retailers a competitive advantage.
Cost optimization method 2: everything from a single source
Various points of contact in different places, different tools – or one solution for everything? Complex process landscapes are not only prone to unexpected problems – they also reduce customer satisfaction and generate unnecessary costs. Making processes leaner can therefore be an effective way to reduce costs. With Seven Senders, all shipping processes can be controlled centrally on the platform. Selecting the right carrier, creating labels, managing returns, tracking shipments end-to-end – with the logistics services, you can optimize the whole process.
Cost optimization method 3: specialists, not generalists
How can international shipments and the number of contacts be optimized while also increasing customer satisfaction? The company Internetstores solved this conundrum with the help of Seven Senders. As recently as 2019, the retailer was still using a general pan-European courier service for most shipments to its markets abroad. Seven Senders’ innovative solutions were first rolled out in Austria and France, followed by Spain and Italy, where national parcel carriers now deliver Internetstores products without the company having to deal with multiple interfaces.
Seven Senders serves the small items hubs, while large goods are transported using other partners. In France, an additional shipping partner is involved; one carrier takes care of home delivery, while another delivers to pick-up stations, where customers can collect their items themselves and save money. Another benefit: customer satisfaction has increased by up to 10% since they started using national parcel carriers. At the same time, percentage cost savings are in the double figures. Overall, leaner, improved cost structures are associated with higher levels of customer satisfaction – a classic win-win situation, as this customer story clearly shows.
Cost optimization method 4: streamlined communication
Streamlined communications management is key when scaling a business. With the Parcel Finder feature of the Seven Senders delivery platform, staff in operational departments (e.g. customer service) can obtain relevant information about individual shipments quickly and easily.
Common customer questions such as ‘Where is my parcel?’ and ‘When will my order arrive?’, together with typical questions about invoices, refunds or payment reminders, make up the lion’s share of enquiries in almost all product categories. This is where Seven Senders Notifications enhances the customer experience by providing relevant information about shipments.
In addition, all important details and documents, such as contracts and invoices, can be managed and archived in one location. This central document repository provides greater insight into business-relevant key performance indicators (KPIs) and enables data-driven performance analysis. The clearly arranged dashboard makes it easy to verify invoices or analyse relevant contract parameters, which facilitates efficient communication as well as transparency over the whole shipping process.
Cost optimization method 5: cost-efficient returns management
If a customer wants to return their order, the returns process has to be straightforward and involve as few contacts as possible. The Seven Senders Return Portal is integrated directly into the online shop. Using the portal, the customer can print the label themselves, so the retailer saves on production costs.