This commentary was written by Jorge Lopera, vice president and head of industry strategy at FarEye. The views expressed here are solely those of the author and do not necessarily represent the views of Modern Shipper or its affiliates.
Items that years ago were not routinely purchased online are now proving to be some of the highest growing product categories in online retail. The market for physically large items such as furniture, appliances and other large goods (big and bulky) is no exception. The U.S e-commerce furniture and appliance market was worth USD 96.2 billion in 2021 and is expected to grow by 4% annually through 2025.
As online big and bulky sales continue to grow, consumers and retailers alike are realizing the importance of delivery and its impact on purchase decisions. Big and bulky retailers and carriers with faster, cheaper, more flexible and more sustainable shipping have a competitive advantage. Getting this competitive advantage requires a thorough understanding of the unique challenges of big and bulky delivery and the tech-enabled solutions that supply chains can employ to overcome them.
Big and bulky delivery challenges
Here are a few of the top challenges big and bulky shippers and carriers must overcome to get ahead:
Delivery fees. The cost of shipping and delivering bulky items is high because it is resource intensive. There is less space available per truck, two delivery personnel may be needed, and installation may be required. These additional costs are oftentimes passed on to and shouldered by the consumer as cash-strapped retailers may not have a choice.
On-site delivery experience. The problem for many big and bulky retailers is that they outsource delivery to third parties to gain more flexibility and capacity. This comes at a cost – losing control of the delivery experience. Outsourced delivery personnel may not be dressed appropriately, represent the brand as the retailer would like, or have extensive knowledge about the products that they are delivering. Many outsourced delivery drivers are not equipped with the right tools to complete the job, such as the right sized truck, tools to move large items or the ability to install complex deliveries.
Long delivery windows. Delivery windows for larger, heavier items are typically longer than delivery windows for smaller items. Upon checkout, consumers may be faced with estimated delivery dates ranging from days to weeks in length. Many furniture and appliance retailers do not show consumers a delivery window before checking out, giving them only a deliver-by date. Making matters worse, if the delivery requires delivery personnel to enter a consumer’s home, long delivery windows can be tremendously inconvenient as consumers may need to spend an entire day at home waiting for the delivery to arrive.
Delivery visibility. Once a delivery window is set, estimating the exact time within that window that the order will arrive can be as equally challenging as setting the delivery window. Estimating delivery times for big and bulky items can be tricky. When consumers place an order, retailers may not have the large item in stock at a nearby store due to the high inventory costs of large items. Delivery orders may originate from retailer warehouses or even manufacturer factories, far away from the consumer. Delivery speed aside, consumers want to know the status of their order, especially big and bulky orders which are generally more expensive.
Partial delivery. A common practice with big and bulky delivery is partial delivery. Different parts of the set may be coming from different fulfillment channels, different manufacturers or, perhaps more times than retailers may want to admit, some parts of the whole order may be broken or defective. This requires flexibility and the ability to orchestrate additional moving parts to ensure that large, multi-piece orders arrive at or around the same time. Waiting an extra week to complete a furniture set may be inconvenient for some consumers.
Returns. A crucial area where online shipping falls short is the ability for consumers to see, feel, and temporarily experience many of the goods they purchase. Consumer satisfaction is thus compromised when a washing machine purchased online fails to meet expectations. Thankfully for consumers, most retailers offer online returns policies. And consumers are using them. This is causing major headaches for retailers and their logistics partners, as returns are costly and difficult to orchestrate, especially when returned items are on the larger size.
Sustainability. Increased global focus on sustainability has created incentives for retailers to brand their products and delivery services as having a minimal impact on the environment. Retailers must create more efficient delivery methods that reduce their use of fossil fuels and orchestrate the movement of products from fulfillment center to consumer doorstep with minimal carbon footprint. Electric vehicles, autonomous vehicles and efficient route planning can help to achieve this.
With the right technology platforms, tools and partnerships in place, here are a few things big and bulky retailers and shippers can unlock to get their deliveries right, gain competitive advantages and bring in new and repeat consumers:
Supply chain visibility. End-to-end supply chain visibility that can provide real-time ETA updates to all stakeholders, including supply chain managers making decisions, drivers completing routes and consumers waiting for their orders, enabling supply chains to become more adaptable, flexible and proactive.
Omnichannel fulfillment and final-mile delivery. Precise, omnichannel fulfillment execution improves delivery speed and increases flexibility. Retailers can unlock and manage non-traditional fulfillment types such as drop-shipping with ease and increase efficiency in the final mile with intelligent routing and final-mile orchestration.
The future of big and bulky omnichannel fulfillment lies in developing micro-fulfillment centers. By developing dedicated big and bulky micro-fulfillment centers, retailers can not only cut costs by reducing fuel expenses and mileage, they can also reach widespread markets swiftly while bringing down carbon emissions.
Consumer control and flexibility. Give end consumers greater control with more shipping options, lower costs and delivery windows. Provide accurate order tracking, product availability and instant service. The crowdsourcing model can enable retailers to provide instant service while ensuring reduced operational costs.
By crowdsourcing deliveries and using technology solutions to centrally monitor those deliveries, retailers get real-time visibility into their operations and can enhance customer experience by proactively informing end consumers about the status of their delivery. The consumers can be updated about any delays against the promised ETA and they can also be given the flexibility to choose delivery time as per their convenience.
Enhanced network management. Whether managing an in-house fleet or outsourcing deliveries to third parties, shippers and carriers can optimize their networks through route orchestration and ensure drivers are representing the retailer brand, have the tools they need and enhance the consumer delivery experience.
An Unrealized Opportunity These recent advancements in supply chain technology can help big and bulky retailers to successfully meet increasing consumer delivery demands. But are they taking advantage of them? Perhaps not. 46% of furniture industry executives say that their delivery technology either needs improvement or needs immediate and significant improvement. With online competition for big and bulky items heating up, a tech-enabled delivery experience that is faster, cheaper, more flexible and more sustainable can make the difference between a sale won and a sale lost.
About the author
Jorge Lopera is vice president and head of industry strategy at FarEye, an intelligent delivery management platform.