When it comes to selling and shipping bulky furniture, your store’s e-commerce side can out-Amazon Amazon.
E-commerce is on the rise – and with nearly eight in 10 Americans now shopping online, this growth shows no signs of stopping. Amazon has set the new standard of delivery, led by its free, two-day shipping that’s completely reset buyers’ expectations. These expectations are even pushing big-box retailers like Walmart and Target to re-examine their shipping methods to compete with the tech giant. This shift in shipping strategy has forced a significant trickle-down effect and, as a result, put immense pressure on smaller e-commerce sellers to follow suit.
There is one area of e-commerce where online sellers can still compete logistically with Amazon and other bigger retailers: the delivery of oversize, bulky items like furniture and mattresses.
Fast-growing retail segment
Currently, Amazon is shifting its focus to prioritize the most profitable business lines. As a result, it is calling it quits on certain items that are difficult to ship and setting new rules and restrictions for the brands that sell them through its marketplace. These items, categorized as CRaP (Can’t Realize a Profit), will still be sold through Amazon’s platform, but the responsibility of warehousing and delivering these items will be in the hands of their respective retailers. This creates the ideal opportunity for smaller retailers to establish themselves as leaders in the space.
Online furniture sales are one of the fastest-growing segments of online retail. According to eMarketer, it’s expected to reach $42 billion in sales in 2019. Buyers are now more comfortable making large purchases online, sight unseen. Millennials tend to be more trusting of online sources and make more digital purchases than other generations.
While most sellers now have parcel deliveries down to a science, large-item logistics remain a black hole for most online merchants – even Amazon. Getting shoes into a mailbox is one thing; getting a 250-pound armoire from depot-to-door is a completely different ballgame. Pickup and delivery schedules, insurance, assembly and bottom-line transport cost are all key factors that impact success in this space.
Until Amazon figures out oversize delivery, the online sellers of big and bulky goods hold an advantage over the competition. They can out-Amazon
Amazon if they focus on three key differentiators when it comes to their delivery options:
While most customers who purchase large goods online understand it takes longer to deliver a sofa than a pair of sneakers, they’re now conditioned to expect the immediate gratification of free two-day shipping (i.e., the Amazon effect), and retailers looking to expedite their delivery process need to focus on the three key factors that dictate speed of delivery: item source, consolidation and mode of transport.
Online marketplaces, especially those that source items from estate sales or direct from consumers, have to consider the extra time it takes to get an item out of a location and headed for a depot or its final destination.
The challenge: It’s not uncommon for a single piece of furniture to be consolidated with other items headed for a similar region and to change hands up to eight times in the process between first mile, long haul and final mile. This can mean six to eight weeks’ delivery time, glacial by today’s new normal.
Some large online sellers such as Wayfair have created proprietary networks that still require three to four touches and several weeks for items to get into buyers’ hands – still falling short of consumer expectations and leaving significant room for improvement. Further, many traditional transport companies, such as less-than-truckload (LTL) carriers, loathe residential pickups and deliveries due to the risk of knocking over mailboxes, knocking down power lines, tearing up lawns and getting stuck in a cul-de-sac.
The solution: The trick is finding a white-glove solution that gets an item from the source, to the road and to its destination with as few “touches” as possible – and this may mean turning to unconventional solutions.
One example of how to do this is to build or find a transporter network of experienced drivers, including those who operate sprinter vans, box trucks, pickups with trailers and traditional tractor-trailers. By utilizing less-traditional carriers, many of whom are small business owners themselves, retailers can leverage untapped truck space to help facilitate large-item deliveries through the network.
To dispel the myth, there is no such thing as “free shipping” – it’s just a matter of who pays. Amazon knows this all too well, as shown in its new logistics strategy that calls on big and bulky retailers to handle the warehousing and delivery of difficult-to-ship products on their own. Amazon’s bottom line is simple: Own the supply chain. Squeeze out all excess cost. Maximize revenue.
The challenge: Unlike Amazon, few online sellers own fleets of planes, trucks, ships and drones. This means merchants must turn to existing logistics networks when shipping furniture and other oversized goods. However, this can come with excess fees, especially when working with LTL carriers, who prefer freight that stacks neatly to maximize capacity. Those extra fees only increase delivery cost or get absorbed by the seller. Neither of those options is great for the bottom line.
The solution: When it comes to cost, it can be challenging for sellers to know a good rate from a bad one – and without volume, it’s often difficult to command competitive rates from carriers. Today, when everyone is surrounded by data, it’s possible to get delivery rates like a stock market report. In other words, big data makes it possible to know how much it costs, within very little margin for error, to get that grandfather clock from Dallas to San Antonio. This means sellers can now access predictable, fixed-price delivery rates that include insurance, and even turn shipping into a profit center by marking up delivery prices.
Trust and transparency
While customers are now conditioned to speed and low-cost delivery, many carriers still work on a “you’ll-get-it-when-you-get-it” timeframe. This not only reflects poorly on the carrier but on the seller. In a hyper-competitive e-commerce market, negative reviews, even if it’s not the seller’s fault, can torpedo online sales.
The challenge: For example, while it’s reported that UPS is looking into a last-mile solution, its drivers won’t carry parcels over 150 pounds into a home. Other traditional trucking companies often leave items on the curb and won’t bring them indoors or perform assembly or installation. FedEx, on the other hand, has implemented new facilities that specifically handle large packages and says it’s running a big-and-bulky pilot program through its FedEx Freight less-than-truckload unit.
Damages are another story. In fact, some sellers face a worst-case trifecta: uninsured deliveries, a high claim rate and unreliable carriers.
The solution: One option is to consider a fixed-price delivery that includes insurance, a network of carriers that meet certain criteria and satisfaction rating, as well as tracking and delivery notifications for added peace of mind. What can bring it all together for online sellers? Technology. When technology is applied, in-home, white-glove delivery costs will drop, transit time will decrease by better utilizing truck space, and feedback ratings will give both buyers and sellers unprecedented transparency.
For online sellers, large-item delivery doesn’t have to remain a head-scratching experience, nor should it be the place where merchants put all their attention. Those who figure out how to maximize speed, minimize cost and establish trust with buyers will be the most competitive.
Look for this area of e-retail to remain a prominent focus for both logistics companies and retailers. Oversize delivery is, quite simply, a market that can no longer be ignored.
With Amazon admitting it can’t get a handle on oversize goods, independent retailers are given the unique opportunity to establish themselves as leaders in the delivery of big and bulky items. The race is on.