A five-hour outage on June 1st that left Visa cardholders across Europe unable to complete transactions caused widespread disruption and frustration, and raised serious questions about a future cashless society. Consumers saw cards being declined as they tried to make purchases at gas stations, restaurants, supermarkets and retail stores. Some reported having to stand in line at checkouts for 20 minutes as cashiers struggled to process transactions, not knowing the system was down. Some drivers couldn’t get gas, which for some created a real problem. Among those affected was a member of the British Parliament, Angela Rayner, who tweeted she was able to fuel up because “my local garage knows me.”
There's no small list of retailers who are struggling to keep up with the Amazon effect, but a closer look at why some fail and others prevail, should give retailers who are willing to embrace change some hope.
Shipping isn’t just about getting a package to a customer’s front steps anymore, and companies are not only investing in their shipping strategy because it saves them money - it goes beyond the box.
POS resellers are essential to a vendor’s strategy to target its products to the right market. Without the benefit of channel partnerships, vendors would be hard-pressed to gain brand mindshare.
Long checkout lanes, disorganized shelves and hard-to-find products lead to frustrated shoppers. And when customers get frustrated, they often give up on a store and walk out, especially if there’s no associate around to help them.
How Amazon continues to build a loyal customer base that keeps them coming back.
Customers are increasing the size of their baskets in order to qualify for free shipping.
Parcel growth will continue to rise at a rate of 17%-28% each year between 2017 and 2021, and by 2020, same-day delivery will drive up logistics costs as a percentage of revenue by 50% (Source: Gartner, October 2017). For most omnichannel businesses, the cost of shipping now exceeds the sum of all other fulfillment costs including direct and indirect payroll, benefits, facilities and utilities, packing supplies, etc. Businesses need every advantage they can get to hopefully evaluate, reduce or control the rate of shipping expense increases.
If there’s any doubt about the impact of cash management solutions on the cost structure of retailers, consider this recent finding by IHL Group: Replacing manual processes with automation technology can save retailers an average of 200 to 500 labor hours monthly per store.
A recent article in the Wall Street Journal revealed that Walmart executives plan to announce a further tightening of their on-time, in-full (OTIF) policy to go into effect in April 2018. Whereas the previous requirement called for larger suppliers to deliver within a one- or two-day window 75% of the time or be assessed a fine of 3% of the cost of the goods in the shipment, the new requirement raises the target to 85%. Smaller suppliers will see their compliance target rise from 33% to 50%. OTIF targets vary by department, and some of AFN’s clients have seen higher OTIF requirements (as high as 95%) go into effect already.
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