Consumer Demands Put Pressure on Furniture’s Final Mile
While brick and mortar stores remain the shopping venues of choice for the majority of US furniture buyers, the battleground is shifting. By 2012, 27 percent of total home furnishings revenue will come from online sales (Statista), and that share is growing at a double-digit rate. The trend has ramped up the pressure for fast, flawless, final-mile delivery.
That’s right, the least glamorous part of the business is fast becoming the most important to the customer.
Furniture manufacturers and retailers are adapting to this pressure. How well and how fast they adapt will largely determine their future success.
Meeting consumer expectations
Millennials represent the fastest-growing share of the furniture-buying market (US Bureau of Labor Statistics). Furniture retailers have largely revamped their marketing and selling processes to cater to this group’s penchant for technology-aided buying. Websites feature high-definition, 3D models of items and in-store kiosks can show how that left-angle sofa looks in the front room in blue…or in green.
But the shift to technology-aided delivery operations has been slower. Those that fail to address this gap risk losing market share.
Consumer expectations for furniture delivery are clear. They want it fast, ideally free, within a tight time window of their choosing, and they want complete transparency during the delivery process.
Technology exists to meet these expectations. It’s now down to furniture companies to embrace technology for the final mile, just as they have for the front end of the buying process. Let’s examine how this can be done for each key customer expectation.
Tight delivery time windows
The days of 8-hour delivery windows are long gone. Retailers are now expected to offer delivery slots six or even seven days a week and within very precise time windows that suit the buyer’s, not the retailer’s schedule.
Meeting this expectation for choice and convenience is challenging since on-time delivery is dependent on many, many variables. Traffic can delay the truck, a late morning delivery many run up against the driver’s lunch break, or the delivery team could get held up assembling a bed at the previous drop point. Advanced routing and scheduling software can account for these and dozens of other factors to set a schedule that is accurate and achievable. For instance, smart routing will apply average unloading and installation times on a product-by-product basis, recognizing that delivery of a chair will require five minutes while a sleigh bed assembly could require over an hour.
Free or discounted shipping
Free shipping isn’t a logistics decision, but it is a logistics problem. Market pressures lead most furniture companies to offer free or discounted shipping for purchases over a minimum threshold. This added overhead erodes margins. Logistics operations are under pressure to minimize this hit to the profit line, and that means tight control on fleet operating costs.
The same routing and scheduling software makes this possible by ensuring customer delivery requirements are met using the least amount of time, freight miles, trucks and drivers. While the largest delivery operations were early adopters of smart routing software, many smaller operations continue to rely on homegrown, spreadsheet-based route planning tools, or tools that just aren’t designed for the job. Such “economical” solutions are incapable of taming the complexity of large-scale, multi-stop routing and, therefore, cost far more than they save.
Let’s say you’re a furniture retailer with 40 trucks in your fleet, each logging an average of 50,000 miles per year. That amounts to total annual fleet miles of 2 million. If the fully burdened cost of each of these miles is $2.72 (National Private Truck Council estimate), that’s a yearly fleet operating cost of $5,440,000. By using routing software to cut fleet miles 15 percent (a reasonable expectation), costs would be reduced by $816,000.
A great on-site delivery experience
For an online furniture purchase, a brand is faceless until the final delivery. If this experience disappoints, customers will go elsewhere the next time.
Again, technology is completely transforming this on-site experience. For instance, if furniture requires more complex installation, proof-of-delivery (POD) software on the driver’s handheld device can walk the install team through a step-by-step process for each product. Process consistency maximizes the likelihood of a problem-free delivery and happy customers. To close out the delivery, the easy, sign-on-glass functionality of that same POD software establishes your brand as professional and tech-savvy.
Transparent delivery process
Consumers are now conditioned to expect updates on delivery progress, especially if they’re taking a morning off to receive items at home. They don’t want to ring a call center, they want automated alerts.
Once route planning is complete, advanced routing software can minimize costly calls to your customer service team by automatically generating a text confirming the delivery slot. This gives the customer peace of mind or the opportunity to request a schedule change. On the morning of the delivery, the customer can receive confirmation of a tighter time window and, while the truck is on the way, another alert can be sent noting an even more precise arrival window based on the location of the truck and real-time road conditions. This automated communication reduces customer anxiety and increases the chance that they will be home to receive the items.
Final-mile delivery is key to brand loyalty
The battleground for competitive advantage in furniture retailing is shifting from the store aisle to the buyer’s doorstep. Companies that try to manage the complexity and cost of final-mile delivery without the aid of technology are not giving themselves the best chance of success.
Powerful tools like delivery routing software and POD software help furniture companies increase fleet efficiency, confidently make delivery promises and, most importantly, increase brand loyalty – the ultimate payoff.