Small Business Adapts to Shifting Expectations, New Tech

By: Mat Herron, Community Writer

Thanks to the growth of Amazon Prime, people expect their purchases to show up in one or two days.
 
It’s an expectation that’s forcing small and medium-sized businesses to rethink their approach to order fulfillment, as detailed in a 2017 Pitney Bowes/Forbes Insights report [1].
 
To preserve margin and control cost, smaller retailers are turning to a multi-carrier strategy that includes not only UPS and FedEx, but also the U.S. Postal Service.
 
Once considered a less attractive option for commercial use, USPS now competes favorably as a logistics vehicle. It maintains a six-day-a-week delivery schedule and offers a flat-rate Priority Mail option for packages that weigh up to 5 pounds, which make up the majority of e-commerce orders. USPS also charges less for international shipments, a welcome feature considering cross-border commerce is expected to reach $3.4 trillion in 2020 [2].
For other retailers, next day is still too slow: Everlane, which until recently had no physical store, partnered with Postmates in 2014 to deliver silk tops, cashmere sweaters, leather totes and other items to customers in San Francisco and New York within one hour. “If you can have pizza or a burrito delivered in minutes” the company’s website asks, “why not clothing?” [3].
 
“Buy Online, Pick Up in Store” is common now: Invesp, a consulting firm that specializes in conversion rate optimization and digital transformation strategies, says 57 percent of buyers it surveyed have picked up an online order in the past year [4]. Of those 57 percent, 73 percent said they bought online and picked up in person to save on shipping. This behavior has led to a new phenomenon - microshopping - meaning any trip that takes from three to five minutes.
 
Amazon has helped foster microshopping through its Locker service, which it launched in 2011. Customers can select a Locker location as their delivery address and retrieve their packages from it using a code. As of December, Amazon had expanded the service to 2,000 locations in more than 50 cities in the United States, Canada and United Kingdom.
 
Traditional outlets like Best Buy and Dick’s Sporting Goods offer a variation, called “Buy Online, Ship From Store,” where orders are fulfilled at the retail location instead of a traditional warehouse.
 
This strategy decreases delivery times, minimizes the loss of potential sales (because an item is out of stock, for example) and exploits an asset legacy brands already have: their own buildings. “We spent the last 153 years building warehouses - we just called them stores,” former Macy’s CEO Peter Machse said. GAP CEO Glen Murphy points to his company’s 2,600 distribution centers [5].
 
Customers who prefer to venture outdoors and visit a physical shop should prepare for an immersive experience. Thanks to augmented reality and artificial intelligence, look for smart fitting rooms to take your measurements with a scanner, sensors to detect what kind of mood you’re in, and virtual payment systems to make your checkout seamless [6].
 
These innovations are largely driven by consumer sentiment: One study found that almost half of respondents who shop in person said good technology will determine whether they return [7].
The Speed of Sell