The retail industry is a major player in global trade, and logistics is the key to delivering the right product to the right customer at the right time. By building an effective retail logistics strategy, it is possible to meet the rapidly growing consumer demand and make your products available anytime and anywhere.
Retail logistics is the process of transportation of goods from the production source to the customer. Although put in simple words, retail logistics involves the whole sequence of operations required for the successful delivery of items. The modern way of making purchases, including online platforms, has become so casual that it is hard to imagine all actions needed for the proper organization of the supply chain.
Logistics processes in the retail industry usually boil down to two interconnected categories: inbound and outbound logistics. In terms of inbound retail logistics, materials or goods are moved from the supplier to a designated internal spot that is usually arranged in a warehouse. This is where one of the most important elements of the retail supply chain steps into the game.
It would be impossible to manage any retail trade without the warehouse capacity that serves as a reliable depot for the supplies you want to offer to your target audience. That is why the warehouse arrangement is a critical step in preparing for retail operations. Warehouses differ in size, structure, applied technologies, and business orientation. Depending on these characteristics, modern warehouses can be divided into several types:
After being placed in the warehousing space, the products are ready for retail operations. This is where the outbound retail logistics takes off. This process primarily starts with the customers’ order placements. Then, retailers receive the order, check if wanted goods are in stock and in good condition, and finally pack and prepare the items for shipping. After that, the actual process of transportation takes place. If everything has been managed correctly, in the end, customers receive their orders on time.
Retail logistics remains a constantly growing component of the global supply chain process. Over the last decades, the retail supply chain has gained significant importance due to the rapid development of technology and a global shift to online purchasing.
If earlier buyers completed their orders through specialized suppliers, nowadays the giant retail companies like Walmart, Target, and Amazon have amazingly simplified the shopping process. Consequently, it has become impossible to imagine profitable retail trade without redirecting business towards technological innovations.
According to statistics, e-commerce sales are expected to overrun $6 trillion in revenue by 2023. That is why it is critical to stay up to date with tech trends in retail logistics. Your priority as a retailer is to avoid exceeding the stock and running out of it. This is where digital transformation steps in: by gathering data and analyzing it, you can effectively forecast the customer demand as well as have an insight into your stock availability at any time.
Such insights are extremely useful due to the retail demand volatility. While it is easier to count the orders' volume for consumer packaged goods or other customary products, you are less likely to predict the request for apparel and all the goods actively involved in marketing schemes.
Moreover, modern software systems can help cut down costs by managing warehouse operations. Thus, you will always know how much space you need for storing goods without overpaying for it.
A well-organized supply chain is probably the strongest factor that contributes to the availability of goods on the store shelves and online marketplaces. The retail logistics system performs a range of functions that streamline the process of items’ delivery.
Like any other industry that is directly connected to logistics operations, the retail supply chain leans on several key points to remain productive. All of them are aimed at optimizing the flow of delivery and, as a result, encourage the potential customer to repeat their purchases later. With the rapid growth of e-commerce, customers got used to buying things in a few clicks, and it becomes challenging for the retail logistics to meet the audience’s need for fast and easy shopping.
Logistics is one of the milestones of extending the modern retail sector and developing small and midsize businesses. Despite the popular opinion of logistics importance only in actual delivery processes, it is no less beneficial in other stages of building the retail supply chain strategy.
The main advantages of logistics for retail supply chains are:
The retail supply chain differs from the other logistics branches by its strong consumer orientation. That is why logistics in the retail industry is susceptible to a variety of trends emerging in all groups of buyers to stay relevant and proactive.
One of the main parts of launching an effective retail supply chain is choosing the proper shipping service. When considering the available options, count several factors such as pricing and expectations of delivery speed. To thoroughly plan your shipment, find out more about the best solutions for retail transportation.
Less than truckload shipping mode is probably the best way to move the goods in terms of retail trade. LTL shipping mode allows to transport up to 20,000 lbs or 1 to 6 pallets of goods. With LTL, you will be using a part of the trailer’s space instead of booking the whole truck. Thus, even if your cargo is of moderate size and weight, it is possible to deliver it cost-effectively. Due to sharing the truck’s space with other shippers, the delivery dates of LTL are typically extended and include the chance of delays as the driver makes multiple stops in the process.
Full truckload mode is suitable for moving larger items or bigger quantities of goods. With FTL shipping service, you’ll receive the whole trailer meant to condense your products only and move it straight to the destination with no extra stops. FTL mode works best in cases when you have to deliver the cargo within certain deadlines. Also, full truckload shipments implement higher levels of cargo safety, so you can be sure goods do not get damaged during transportation.
Reefer shipping is the best option for delivering consumer packaged goods (CPG), which consist of a huge part of the retail supply chains. Besides all the products of everyday use, CPG include foods that have a short shelf-life and need to be transported in trucks with thermal control systems. Designed to maintain the required temperatures, refrigerated shipping allows keeping your items fresh to the very moment of receiving.
As a wholesale shipper, you must have been facing the common challenges of the wholesale distribution industry. On the one hand, the competition among manufacturers and suppliers is getting stronger. To stay in the game, they want to bypass various distribution mediators and try to optimize the wholesale delivery so that they reach the customer faster.
Along with expanded product offerings, there is a tendency for tightening delivery terms. All these reasons put pressure on wholesale shippers and make them search for advanced types of transportation. The full truckload shipping mode is the key as it reduces the risk of delays or cargo loss. By choosing FTL for wholesale shipments, you will deliver the items unharmed and upgrade the customer experience.
The cost of retail logistics operations is based on the different conditions you want to hold your shipment on. First, you need to learn what distance your cargo is supposed to cover and what is the approximate mileage of the road. The distance length may vary depending on whether you are going to ship supplies directly from the manufacturers, or from the warehouse that you have the products stored in. That is why it is so important to choose the warehouse location strategically, knowing it can significantly shorten the route and save much time.
Second, you have to decide on a suitable shipping service: full truckload is better for fast transportation of big amounts of goods, while less than truckload works perfectly for smaller shipments and remains cost-efficient. The choice of the shipping mode is directed by the general volume and weight of the products, so do not forget to evaluate these characteristics.
Third, consider the best options for packaging your goods. Nowadays, there are tons of packaging offers so you will surely find the right one. The main thing to remember is package efficiency, which means its capacity to protect the goods during transportation.
Also, the cost of retail logistics may be influenced by the seasonality factor. There are several periods during the year when retail businesses are working to the fullest because of enormous customer demand, for example, the winter holiday season, Black Friday, sale season, etc. In terms of these, logistics operations can be way tougher than usual due to large traffic jams and longer delays. However, even these risks can be minimized by proper planning and preparation.
With a network of over 45, 000 carriers, all of whom have been pre-vetted to deliver the safest journey for your freight, GoShip gives shippers a wide variety of choices through our Get a Quote tool. Shippers just need to enter basic information about their freight and, within seconds, they’ll receive a free range of quotes from which to choose.