Shipping is a growing operational pain point for retailers, as consumer expectations for speedy, traceable — and free — deliveries pose significant challenges in terms of cost and logistics.
Particularly complex is the “last mile” — the final leg of an online order’s journey from the store or distribution centre to the customer’s home. It may sound simple, but it actually requires meticulous inventory management to track down products and an efficient and cost-effective way to deliver them to customers, all while providing customer service that is as easy and as frictionless as possible.
Founded in 2010, ShopRunner is a membership service that connects customers with retailers through the offer of free two-day shipping and returns. Retailers who are partnered with ShopRunner get access to the platform’s logistics network, consumer insights and software ecosystem.
Following its acquisition by Fedex in 2020, ShopRunner is now part of FedEx Dataworks, covering orders at more than 90 retailers including Neiman Marcus, Burberry and Farfetch. The deal makes possible FedEx Dataworks’ long-term strategy, as it intends to utilise ShopRunner’s effective feedback loops that will benefit from its own data, derived from the mobilisation of between 15 to 80 million packages per day around the world. The company will then supplement this with external weather and traffic data, applying predictive analytics to gain insight and optimise how goods progress throughout its physical network.
“It’s becoming increasingly difficult to separate shopping and shipping when it comes to consumers’ brand experience,” said Sriram Krishnasamy, president and CEO of FedEx Dataworks. “The supply chain is now a boardroom conversation — it’s an incredibly important strategic differentiator.”
At VOICES 2022, BoF’s annual event where global changemakers gather to inspire innovation and reimagine the future of the fashion industry, Krishnasamy discussed how retailers can bring logistics in line with brand experience, as well as streamline these processes to operate more responsibly.
Now, BoF shares key insights from the event.
Managing Escalation in Consumer Expectations
SK: Consumer expectation today is to receive products as quickly as they possibly can, which places a lot of strain on the supply chain in addition to increased cost for brands. Having said that, it is an opportunity to optimise the supply chain, from procurement to manufacturing to storage to distribution to the last mile.
Leveraging FedEx’s insights and intelligence on supply chain distribution, brands can achieve a certain speed of delivery — whether that is same-day, next day or 2 to 3 days — while learning which is their optimal distribution system. We help brands meet consumer demand at the right cost while creating visibility around the impact of the choices they make.
The second aspect of it is environmental accountability. When we place an order and opt to receive it in two days, we lack clear information on carbon emissions and the impact of that order on the environment. At FedEx Dataworks, we built a sustainability insights engine that not only calculates the impact on the environment, but also indicates where brands can expose customers on their direct-to-consumer channel to the impact of their choices on speed of shipping. Today, that data is not immediate, so that is one of the capabilities we are building on the ShopRunner platform.
Digitising Backend Processes
SK: It is becoming increasingly difficult to separate shopping and shipping when it comes to consumers’ brand experience. The supply chain is now a boardroom conversation — it’s an incredibly important strategic differentiator. Brands invest years developing the best versions of their products, so they must consider the best way for that product to go from the manufacturer to the consumer.
Brands invest years developing the best versions of their products, so they must consider the best way for that product to go from the manufacturer to the consumer.
ShopRunner is a shopping platform serving millions of consumers, and our strategy in acquiring it was to make the pre-purchase, purchase and post-purchase experience as seamless as we possibly can. We bring intelligence and insight that we have generated over 50 years of running one of the largest physical networks on the face of the planet for brands to connect with their consumers. We play a role all the way from generation to the post-purchase experience. That is the synergy between FedEx and ShopRunner.
One of the biggest reasons for the disruption during the pandemic was the lack of an overarching data ecosystem. If the data was in a collective ecosystem, matching supply with demand would have been far more possible.
Tapping Into a Responsible Shipping Network
SK: The way I see it, the future is more collaborative data ecosystems. Today, information is sitting in silos, locked within separate data systems of different players across fashion’s supply chain. We need a collaborative, joint data platform where there is a place for everyone to compete while optimising operations, delivering the best consumer experiences and making environmentally responsible choices.
Today, information is sitting in silos, locked within separate data systems of different players […] the future is collaborative data ecosystems.
We evaluate how to make our network an extension of your products through data insights and the physical infrastructure, and we want to change the way consumers access their favourite brands through their direct-to-consumer channels — but in a responsible manner, with consideration for the environment and the planet.
This is a sponsored feature paid for by ShopRunner as part of a BoF partnership.