Friday, April 10, 2015 3:45 PM
In Internet Retailer’s April cover story “Diversifying delivery,” editors Paul Demery and Allison Enright explore the world of e-commerce delivery. Given Newgistics’ long history and unique approach to parcel delivery, this is a world we know well and we were glad to see a top trade publication give the issues happening within this space – such as recent rate increases and the shift to dimensional weight pricing (DIMS) – the attention they deserve.
The article centers largely on how these changes are affecting Web and multi-channel merchants, calling out the pain points that are leading these companies to rethink their shipping strategies. As CleanBoutique.com’s co-founder, Amin Harari, is quoted as saying, the national carriers “almost purposely make their rate grids and contracts difficult to understand… Every day there’s a new fee or excuse to upcharge you.”
The article includes a prime example of how much the shift to DIMS pricing can affected a retailer. The changes have nearly doubled shipping prices on one of BabyAge.com’s most popular products – a pregnancy pillow – from its actual 10-pound weight to its new DIMS weight of 18 pounds, based solely on the size of the package.
Chris Halkyard, chief supply chain officer and general manager of distribution services for Gilt Groupe was also interviewed. He discusses how the challenges of the 2013 holiday season left him looking for cheaper shipping options, as well as a way to not have all of Gilt’s eggs in one proverbial basket.
These retailers understood that there had to be a better way.
For some retailers, this means turning to alternatives to the national carriers. Gilt, for example, recently shifted nearly all of its ground shipping business – roughly 20,000 packages a day – to Newgistics. Now, these packages are carried through our ground network and are handed off to the U.S. Postal Service for final delivery. The savings associated with this switch allows Gilt to offer more free shipping promotions and better discounts, a choice Halkyard sees improving Gilt’s customer lifetime value (LTV). Harari and CleanBoutique.com have diversified their shipments as well, sending about half of them through Newgistics now.
You can learn more about what’s driving the changes among carriers and how e-retailers are responding in this month’s cover story Diversifying Delivery, as well as the online article “Gilt diversifies its shipping strategy.”