The Importance of Logistics in the Retail Industry
Retail is a fast moving, constantly evolving industry. Gone are the days of solely making purchases in-person on the high street. The age of e-commerce is here – and it’s worth trillions for the global economy. It’s not enough for retail businesses to line the shelves in shops, now they must order, find, package, and ship hundreds – if not thousands – of products a day to fulfil orders.
Retailers can no longer rely on personal connections in stores; logistics is how retail brands are presented to customers and must be appropriately positive to create long lasting brand loyalty. Whether customers experience brands through click and collect, next day delivery, or in-store shopping, customers expect retailers to be consistently and constantly stocked and prepared.
With customers spread across the globe and e-commerce only continuing to grow, the importance of logistics has never been more pertinent in the retail industry. Retail businesses must streamline their supply chain, perfect shipping methods, and ensure speedy delivery. Only with effective logistics and supply chain management can a retail business continue to thrive in 2021 and beyond, in-store and online.
As specialist e-commerce fulfilment experts with extensive experience in traditional logistics and warehousing, our experts at Allegro Logistics are all too familiar with just how instrumental effective logistics is to retailers. See the benefits our retail customers experience from Allegro Logistics’ efficient, modern e-commerce logistics services below.
What is Retail Logistics?
The terms ‘logistics’ and ‘supply chain’ are often used interchangeably but logistics is a part of the supply chain. Logistics encompasses the movement of goods from Point A to B, including transit and storage, as well as inventory management and customer communication.
In regard to retail, logistics may be the movement of goods from the manufacturer to shops, to warehouses for distribution, or direct to the customer. As the retail landscape expands digitally, beyond the traditional brick-and-mortar store, logistics becomes even more integral. Aside from keeping a shop or suppliers stocked, contemporary retail logistics ensure customers around the globe receive the right product at the right time in the right condition for the right price.
Read more: Order Fulfilment – How to Improve Your Business’ Order Fulfilment Process
For any business with products, suppliers, and customers, logistics is important; without logistics there are no transactions and, therefore, no profit. For retail businesses, effective logistics can define the success and customer loyalty of a brand and is thus critical.
How the Retail Industry Benefits from Logistics
Without logistics, the retail industry would be at a standstill. No products would make it to shops, and customers would be left empty handed. Obviously, logistics is critical to the retail industry, but effective logistics can provide numerous benefits too.
Streamlined Supply Chain Management
Logistics is just a part of whole supply chain management, which encompasses the involvement of numerous businesses and players in the creation, supply, and transport of products from start to finish. Logistically, the whole supply chain must be managed carefully and to precise timeframes to ensure that orders are met, customers are happy, and that any perishable products are not rotten upon arrival!
At every stage of the product journey, from transport and warehousing to delivery or in-store selling, retailers must optimise and streamline processes for the fastest, cheapest, best solution for products. Failure to properly manage a supply line could lead to disaster for a retail business – whether that means empty shelves, long delivery delays or price hikes.
Find out about the benefits of storing stock in logistics warehouses with our blog.
Speedy Delivery
By applying strategy to product transportation and researching best available couriers and routes, retailers can ensure faster, more direct delivery. Properly planned logistics can reduce transit times, from supplier to store, and from seller to customer.
The Importance of Efficient Delivery Management for Ecommerce Businesses and Online Retailers >
Next day delivery is not just an attractive promise, it’s an incredibly possible offering that boosts sales and flaunts a retail business’ comprehensive, efficient logistics. In a 2020 report, it was found that 41% of consumers questions cite long delivery times as a reason to abandon their online cart – therefore e-commerce retailers especially must consider the impact of logistics on delivery.
Innovative Technology
The technology used for both retail and logistics is ever changing and ever improving, and now even integrates the two on one unified platform. Here at Allegro Logistics we use Mintsoft, an industry leading software solution encompassing all key areas of retail logistics; order management, inventory management, warehouse management, transportation management, and forecasting.
Software solutions offer more than stock tracking, and help to create metrics to measure and adjust the entire order fulfilment for optimisation. Beyond physical products, retail logistics software facilitates the management of sales and compilation of consumer and trends data. In the 21st century, retail logistics is driven by data, speeding up processes, driving change, and aiding big business decisions.
Read more: How Has Technology Transformed the Logistics Industry?
Inventory Management
Following on from the above, with effective organisation and tracking of stock through logistics management software, retailers know where their stock is at all times and, importantly, how much is left. With effective logistics management, the guesswork is taken out of shop stocking and order fulfilment.
Inventory Management – The Importance of Effective Inventory Management >
What once meant grabbing a clipboard and pen, and spending hours laboriously counting stock by hand, has now been transformed into automated reports, informative graphs, and instant data, viewable with the click of a button. Now, retailers can update their website when products are running low, alert their supplier if they need more stock, or adjust marketing efforts to boost sales of certain products.
Cost Effectiveness
The more effective the processes of a retail business, the most cost-effective the logistics are as a whole. Whether retailers outsource to a third-party logistics provider (3PL) or streamline process in-house, there are no doubt cost benefits.
Why hire warehouse staff, rent storage space, and invest in innovative solutions when a third-party can do it all with all? And for a small fee in comparison! 3PLs help retailers focus on the smooth running and future of their business without compromising on great delivery or customer service.
Begin outsourcing your logistics with trusted e-commerce fulfilment partner, Allegro Logistics.
Outsourcing retail logistics can result in stabilised delivery prices or stock transport costs, reflected in the final product prices for customers – who no doubt appreciate the bargain! Additionally, when outsourcing logistics, 3PLs use software to track clients and warehouse management, which retailers can leverage to ascertain insights that lead to smarter, fiscally driven, business decisions.
Additionally, retailers that do have their own warehouse and staff can utilise inventory technology to optimise the pick and pack process, speeding up fulfilment and allowing more orders to be completed each day.
Pick and Pack – What is Pick and Pack Fulfilment? >
Easy Returns
Everyone has done it. Bought shoes in the wrong size, had a product arrive damaged, or decided a new fashion trend doesn’t suit. When a product is simple to return, we as customers are happy.
Retailers with dedicated logistics facilities that receive returns and clear-cut returns processes are sure to delight customers. Also, with expert logistics processes, it’s more likely the right products will be sent to the right people in the right condition, reducing the need for returns. View our returns service to find out more.
Reduce Risk
Where a disorganised retail business may fret over holiday sales spikes or low profit months, businesses with well planned, prepared, and bolstered logistics and supply chain management will take it in their stride. Retailers with tried and tested logistics systems can produce an assured fail safe against risk and safeguard their bottom line.
Retail logistics, when done right, reduces any worry about whether the wrong products will be shipped, if shipments will arrive in time for a rush, or what inventory levels are. Planning puts the risk at bay and allows retailers to be confident in their ability to please customers – even in the face of unprecedented occasions, as the pandemic showed (read how covid-19 impacted shipping costs and reliability).
Improved Customer Experience
Ultimately customers are what retailers care about. Customers don’t know or even particularly care about the logistics side of retail; they care about the product, the price, and the speedy delivery. Successful logistics means that retailers can achieve low prices, quick delivery, and much more, all to please the customer. The better the logistics, the happier the customers are. The happier the customers are, the more sales and brand loyalty created.
Effective E-Commerce Fulfilment for Retail with Allegro Logistics
At Allegro Logistics we help retail businesses gain a competitive edge with our comprehensive, innovative e-commerce fulfilment service. Using integrated software and relying on our many years of experience in logistics, we facilitate the growth and success of retail businesses.
If you are looking for a 3PL to support your growing business, let us know your requirements and we can provide a quote!
Whether you need support with international shipping, bespoke packaging projects, or short-term storage for your business, our friendly team can help. Get in touch to find out more about our extensive fulfilment, warehouse, and transport solutions.
