Key Points:
- Retail logistics is concerned with the flow of products from the manufacturers to the hands of the buyer
- A core goal of an effective retail logistics is customer satisfaction both in delivery speed and cost
- Outsourcing to a logistics partner who is an expert in logistics solutions could save businesses a lot of time and errors
One of the major concerns of most eCommerce businesses is customer satisfaction. Merchants are invested in delivering quality goods to their customers and offering timely services by reducing delivery delays – this aspect is the core of logistics management.
In the retail business, logistics deals primarily with the movement of goods from the point of origin to the consumers. eCommerce merchants try to optimize logistics solutions to provide the best delivery services for their customers at the best prices.
Retail logistics is a vital aspect of the supply chain that companies use to maintain healthy relationships with their customer base. For brands who have developed their retail logistics management, there is a level of trust their customers have in them to remain loyal to them.
This article provides detailed information on logistics management in the retail industry.
Table of Contents
What are Retail Logistics?
For every business that sells directly to customers, retail logistics is essential to getting products from the manufacturer to the customer's hands.
The success of every retail logistics is made possible through the stages directly involved in the retail logistics solutions. These stages primarily are:
- Inventory management
- Order fulfillment and shipping
- Returns management
Also, these stages can make retail logistics quite tasking for businesses who take the responsibility of handling every aspect of it. For other merchants, outsourcing to a logistics partner who is an expert in logistics solutions could save businesses a lot of time and errors.
What are the Main Parts of Retail Logistics?
When discussing logistics in retail, it is not uncommon to think of shipping orders. Of course, this is vital, but it is one aspect of the whole process. Instead, think of warehouse management, inventory management, cost-effective shipping methods for delivery, tracking inventory, or returns management.
Procuring inventory
It is impossible to discuss the movement of goods without an available inventory to fulfill the order. Procuring inventory helps businesses avoid the unavailability of goods when needed. Through procurement, merchandise is sourced to meet demand in a timely fashion.
Businesses must synchronize inventory procurement into retail logistics to avoid disappointing customers by delaying making goods available when due. An effective procurement process is the first step to successful logistics in the retail business.
Receiving and processing inventory
Successful procurement ushers in the next optimally functioning retail logistics stage: receiving and processing your business's products.
At this stage, inventory is received, documented, and stored. It is also duly inspected that they are authentic and match specifications and customer standards. Priority should be given to detailing and precision at this stage, as errors or omissions could cost the business.
Distributing inventory
In straightforward terms, businesses distribute their inventory across multiple warehouses and distribution centers to make products easier to distribute to customers. This approach is also made with the primary aim of reducing delivery times and shipping costs.
A logistics partner with access to multiple warehouses can save you time and stress to make this aspect of retail logistics faster and more straightforward.
Order fulfillment
When an order is received, processes are activated to ensure that the product is ready for fulfillment and available to be shipped. Depending on the business, order confirmation emails can be sent, including details that customers want to see about their order.
At this stage, payment is made. The picker is notified with details of products to be packaged and delivered as soon and cost-effectively as possible.
Tracking your inventory
Inventory management and tracking are essential parts of the logistics business. This stage is vital in helping companies to keep track of the changing inventory levels and the need to replenish.
By tracking inventory, you can also track orders simultaneously, monitoring them to give your customers updates about their shipment.
Shipping orders
Sending inventory to distribution centers is done too quickly to ship products to the customers. Shipping is one of the most crucial yet delicate aspects of logistics. It is so because a lot can happen during shipping - delays, loss of items, delivery to the wrong location, or even damage.
To stay ahead, merchants take their time with this stage by implementing a winning strategy to satisfy customers.
Understanding returns management
One of the critical aspects of logistics to manage well is returns. For companies that do not have a functioning returns policy, not only would they lose money but customers. With a returns policy integrated into the logistics services of a company, customers grow to respect the brand.
Common Retail Logistics Challenges
Understanding the common challenges in retail logistics will help keep you informed and your customers happy.
Rising consumer expectations
Since Amazon introduced two-day shipping, there has been a shift in customer expectations, particularly with delivery times. Free shipping, same-day, and next-day are other expectations that customers have when making purchase decisions.
Reducing your delivery time by even just one day can help create a strong bond with your customers. This adjustment in lead time is made feasible through the distribution of inventory across warehouses, bringing products closer to the customers. This way, the delivery cost is reduced as well as lead time.
Lack of inventory visibility
Inventory visibility is a crucial part of retail logistics. It helps retailers keep track of their current inventory and be aware of the real-time units of SKUs available at their various warehouses and distribution centers. This allows retailers to make more informed decisions about stock levels. In addition, inventory visibility is vital to meet customers' expectations at all times.
Unfortunately, this single but essential aspect can easily paralyze the retail logistics of any business.
Supply chain complexity
One significant factor affecting retail logistics is disruptions in the retail supply chain. Companies that source products beyond borders it is not unlikely to face specific challenges from time to time. But with global issues that necessitate production standstills, many businesses will have to deal with communicating with customers about delays.
For example, the world has witnessed the global pandemic, which affected retail logistics, making it challenging to access internationally sourced goods. Some businesses would also have their fair share of the current Russian-Ukrainian war, mainly if they source goods there.
A way out of these unforeseen disruptions would be to diversify their supply chain management to make it more flexible.
Related post: 7 Things to Consider When Sourcing Overseas vs. Domestically
High costs
Undoubtedly, many companies include the cost of retail logistics in the prices of goods sold. However, this approach can be dicey, mainly when other sellers of the products are selling for a lower price. And this can only mean competition.
Since lower prices attract buyers, the company can be pressured to bring down costs. But unfortunately, when they do this, it affects the company's purse.
How to Improve Logistics Management in the Retail Industry
Regardless of the inherent challenges of retail logistics, there are tricks to optimizing your logistics services for better results. However, one proven way is to implement retail logistics through various omnichannels. This implementation allows customers to purchase online - on their mobile devices, desktops, and return products in-store.
Outsource logistics management to experts
Retail Logistics is a delicate part of any eCommerce business that helps brands achieve a high customer loyalty level. Regardless of the size of your business, partnering with a 3PL with experience in retail logistics is a better option. A logistics partner will handle the intricate part of your retail logistics and afford you time to build your brand by focusing on other aspects that matter.
Choose your tech stack wisely
With the latest technology, you can achieve more in your retail logistics. Integrating your retail logistics with an automated logistics tech stack can take your hands off many things. These could be as simple as clickable marketing platforms, return icons, or other automated logistics solutions that can make the process seamless.
Don't be afraid of digital logistics
There are no boundaries with what you can achieve in retail logistics in the digital world! Other than sticking with the traditional retail logistics processes, you opt for a better experience digitally. With a fusion of data analytics, artificial intelligence, and other reliable software, you can optimize retail logistics to give you a competitive advantage.
Logistics Management in the Retail Industry with Easyship
Logistics management can be pretty demanding and expensive when you consider in-house fulfillment. However, it is a delicate part of any eCommerce business that helps brands achieve a high loyalty level from their customers.
Plus, handling logistics requires space and staff, which your business structure may not have. Luckily, you still can't have optimally functioning and hassle-free retail logistics services.
Easyship grants you access to reliable software in the latest integrated technology to help you manage many retail logistics services seamlessly.
You also enjoy precision and accuracy in order fulfillment and cost-effective delivery options from an array of shipping services. You don't have to sweat when it comes to logistics. Easyship can handle it for you while you build your business with features such as:
- Free Shipping Rates Calculator: Access high-volume discounts from major couriers. Plus, get instant access to delivery lead times from premium shipping couriers
- Global Fulfillment: Easyship has warehouse partners on four continents to reach your customers worldwide. Plus, Easyship helps scale up fulfillment capabilities without increasing overhead costs
- Shipping Policy Generator: Our shipping policy generator helps merchants and crowdfunding campaigns generate their shipping policy by providing tracking and insurance options, plus other vital information for your shipping process
Ready to ship? Sign up for a FREE Easyship account and learn how you can optimize your retail logistics process
Retail Logistics FAQ
What does logistics mean in retail?
In retail, logistics entails the direct flow of products from the manufacturer or supplier to the consumers.
What does logistics do?
Logistics is the process of planning, controlling, and executing the transportation of goods within a company's supply chain. This includes moving goods from manufacturers or suppliers to consumers.
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