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How multichannel retailers can compete with Amazon on delivery

By Paul Skeldon, Contributing Editor at Parcelhub

For many shoppers, myself included, Amazon has it all. It is easy to use, I can find pretty much everything I want on it, I get it delivered next day – if what I want is on Prime – and returns are easy. Why would I go anywhere else?

Flip this around, however, and what it means is that for all other retailers trying to get me to buy from them they have the unenviable task of trying to ape what Amazon does. Or, to put it another way, to out-Amazon Amazon when it comes to experience from search to delivery.

This is a tall order, but competing with Amazon on everything from next day delivery to customer service – not to mention on price – is the only way that any other retailer is going to survive in the ecommerce era.

So how can etailers – even those that sell via Amazon – compete with the complete Amazon package?

Well, the secret lies in breaking down what it is that Amazon does so well and try to either do it better, or put your own spin on it. Here are some ways in which retailers and Amazon marketplace sellers can look to best the behemoth when it comes to delivery.

Customer experience

Amazon is a pile them high and sell them cheap(ish) retailer. Its schtick is to offer an enormous range at the best possible price. It isn’t all cheap rubbish, but Amazon can rarely be beaten on price. So, to stand out, retailers need to look at other ways to make themselves attractive – and that means creating a great customer experience.

Amazon offers a simple customer experience that ‘delights’ by letting the shopper easily find what they want; retail-as-theatre it is not. And so here lies a competitive opportunity for etailers and Amazon sellers alike.

From a delivery point of view, Amazon’s biggest plus is that it offers ‘free’ next day delivery on many goods. I say ‘free’ because largely it isn’t. It is free at the point of sale, but actually any Prime members that get it pay for it: $79.99 or the Sterling or Euro equivalent depending on where they are.

Here lies an opportunity. Creating a delivery experience that surpasses that of Amazon could really deliver, if you pardon the pun.

So what does that look like? As we shall see, it covers a multitude of factors, but up front it is about delivery precisely when and where the shoppers want it. While Amazon offers ‘free’ next day delivery, what it doesn’t offer (yet) is more precise delivery – and this is what today’s omnichannel customers want.

They want to be able to say “I want this delivered between 2 and 3 on Wednesday” or “I need this delivered the day after tomorrow, but to my office”. They also want the ability to change that on the fly. Deliveries to your car are even now possible, thanks to a Volkswagen trial in Spain.

Now, this is hard to make a reality: it is costly – not least in messing about with delivery driver’s carefully constructed schedules. But it is possible, if you opt for a well-managed third-party delivery management process.

The key is to work with a company that has a multi-carrier strategy in place, so that the vagaries of bespoke delivery can be catered to easily.

Fulfilment

While making delivery part of the customer service paradigm is a key step towards competing with Amazon, there is much more that Amazon brings to the party that competing retailers and Amazon marketplace sellers both need to think about.

Chief among these is that Amazon has created a delivery business that also encompasses fulfilment. Amazon will not only let you sell through its site, but it will also, if you want and are willing to pay, warehouse your product and manage the whole process from orders to fulfilment to delivery and even returns.

Fulfilled by Amazon (FBA) is one of the crown jewels in Amazon’s business as it allows it to control such a lot of the selling process and make more money from each seller. But it isn’t perfect and, to compete with this – both as an independent or as an Amazon seller – you need to have your own extensive fulfilment service in place.

To do this, most etailers have to turn to third parties, which can, like FBA, offer all or any aspects of the fulfilment process, be it warehousing/storage right through to pick and pack and eCommerce delivery management.

What is great about using services such as these is that they allow you to expand what you do and offer a better customer service, but with minimal investment. Third-party fulfilment will also enable international expansion.

Brands such as I Love Retro and Navy London have both leveraged this third party fulfilment to increase turn over and to expand across borders – something that traditionally has been one of FBA’s biggest selling points.

Distribution

As we have touched on in the customer service and experience arena, distribution is another core factor to take on when trying to find alternatives to Amazon.

Smaller retailers that need shipping – and needing to make the shipping component of their customer service play – need to plug into a distribution network. Carrier management software allows retailers to do just that – and to save money while they do it.

Whether you need to send 20, 500 or 5000 or more packages a day, this kind of third-party software allows even small retailers to piggyback next day deliveries in trucks that are already going where they need them to be.

The flexibility offered by multi-carrier operations also means that the concept of letting customers change delivery details on the fly becomes more of a reality. It isn’t there quite yet, but it’s coming.

The main advantage of using a strategy like this is that you, the retailer, gain access to a huge range of carriers that not only gives you the flexibility that you need to manage complex – and customer service friendly distribution – but it also saves you money.

By accessing a single point of contact to a wide array of carriers, each retailer access to ‘pooled volume’ discount rates. It also saves time. And for those of you selling on marketplaces – Amazon and many others – it also plugs into that too and lets the retailer manage their own fulfilment and distribution without having to rely on Amazon.

Proactive delivery tracking

From a consumer point of view, one of the greatest parts of a good delivery service, whether Amazon or the retailer doing it themselves, is being able to track their package dynamically – with Amazon actually showing me where my driver is in relation to my house and how many more stops he has to make before he gets to me.

This dynamic package tracking is now, like everything Amazon introduces, standard and it is what consumers expect from any retailer’s shipping. It is also the beginning of being able to offer shoppers the ability to redirect or stall on the fly.

But there is more to dynamic tracking than this: things that on the face of it aren’t as exciting, but which to an SME online retailer are vital. Using a managed carrier network to compete with Amazon offers a number of advantages: once the parcel is scanned into the system then the third-party will handle all the tracking and, perhaps more importantly, all the customer service issues and queries that then may arise.

This kind of dynamic tracking support is invaluable to retailers as it means that the customer has access to help that can actually help them: the carrier management company being able to see where any parcel is at any point and to talk to the carrier if there are issues or problems.

This suddenly offers the ability to offer a really cool service to customers who want to know what is happening to their parcels and offers a distinct way to compete with Amazon.

Next steps and new innovations

While using third-party carrier management can help deliver all the ‘Amazon killers’ that any etailer could want, one always has to have an eye on the future. Amazon won’t stand still – and neither can retailers and carriers afford to either.

There is much talk of drone deliveries and even robots – in fact in London and Milton Keynes it is now not unusual to see these six wheeled boxes slowly trundling along, but these are just the two obvious faces of next generation delivery that retailers need to be aware of.

More likely to have a more telling impact is something that can’t be seen: AI. Artificial intelligence now drives most things that consumers interact with in their digital day to day doings. And it is going to revolutionise delivery.

AI will, for example, be able to much more efficiently route and, more crucially, re-route deliveries while they are out and about based on traffic, hold ups, problem deliveries, recipient not present and so on.

AI will also take third party carrier management to new heights too, allowing even more efficient and dynamic management of even more carriers, collection points and more. It will make delivery intelligent – and that is something Amazon is definitely working on: and so should you be.

Conclusions

Amazon has the online selling market sewn up. It also has fulfilment, delivery and tracking to match. It is going to bring AI to bear to make what it does even more effective, cost efficient and great customer service. To compete, all retailers – even those on Amazon itself – need to box-clever with their own fulfilment strategy.

And that is going to mean working with third party companies that can manage multiple carriers to offer the flexibility, competitiveness and investment in AI and all other next generation technologies to match.

For retailers, thinking about delivery, fulfilment and more as part of their customer services operations will be vital and focusing on what great services means is a job in itself – so make sure that actual running of these services on the ground is handed to an expert. Then you can start to really take on the Amazon juggernaut.

About Parcelhub – the bespoke parcel shipping solution

Parcelhub is a bespoke multi-carrier delivery management and proactive tracking support solution. Flexible and scalable, its unique portfolio of services integrates seamlessly with marketplaces, eCommerce platforms and order management systems, providing hundreds of multi-channel retailers, global brands and wholesalers with one access point to 20+ carriers and 600+ delivery options.

Distributing more than 6 million parcels on its own carrier contracts every year, Parcelhub’s free multi-carrier shipping software grants hundreds of national and global businesses access to ‘pooled volume’​ discounted rates from its carefully selected range of carrier partners, including Yodel, Hermes, DPD, DHL, UPS, DX, Parcelforce, CollectPlus, SkyNet, ArrowXL, Interpost, Panther Logistics, Direct Link and Palletforce. Dedicated proactive parcel management comes as standard.

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