Warehouse Wisdom. Weekly. 11/17/2023

Happy Friday!

We hope you’ve prepared all of your holiday sales campaigns for launch already, because consumers expect to spend 59% of their budgets on Black Friday and Cyber Monday - which is only a week away!

And don’t underestimate the power of any of your potential customers - even those Gen Zers. Despite their youth, they pack a heck of a punch when it comes to ‘smart’ shopping. 96% of this demographic said they compare prices when purchasing products online, and 95% scour product descriptions and online reviews. Impressive!

So kudos to all of the planners out there that will have most of your shopping done early and will price match for the best deals. It’s a definite inspiration for those of us last minute shoppers scouring the stores for the most expensive deals the last few days before Christmas! This week, we’re covering Amazon’s growing reach, rail service on steroids, near shoring, and more. Let’s dive in!

LOGISTICS VITALS

SHOPPERS ARE TIGHTENING THEIR BELTS AND TRIMMING THE FAT

Hooray for the return of normalcy to Thanksgiving traditions! Demand appears to be strong, and a good signal for holiday shopping amidst our high inflation and challenging economic conditions. But bargain shopping abounds for turkey celebrations in an attempt to trim the fat:

ONLINE MARKETPLACES

AMAZON IS GROWING ITS MARKETING MUSCLES

The big news of the week for online marketplaces comes in the way of Meta and Amazon treating customers to an early Christmas present. The two tech giants finalized a partnership where Facebook and Instagram users can link their social media accounts to Amazon, enabling them to make purchases directly in-platform. But that’s not all, Amazon also finalized a similar deal with Snapchat to do the same.

And Amazon just keeps putting more surprise stuffers in the stockings of Prime members. More specifically, Prime members can view and track all orders in one place on Amazon.com, access customer live chat support on their order detail page, and take advantage of Prime returns with convenient drop-off locations when using Buy with Prime.

With all of the Prime perks, it’s no wonder that merchants are acquiring waves of new customers via the “Buy with Prime” program. In fact, a recent data analysis showed that 3 out of every four Buy with Prime orders are from new shoppers. Now those are some serious muscles! Are you taking advantage of this prime-time opportunity? If not, check out Amazon’s detailed page on how to sign up.

SHIPPING AND FREIGHT

RAIL SERVICE ON STEROIDS

What do you get when you combine trucking and rail behemoths? Apparently, a quantum leap forward in rail delivery times that can lift some serious weight. Historically, rail transportation has been a very cost effective option for inbound shipping – but it’s Achilles heal is that it is slow. If quick deliveries of product are needed, then rail transportation hasn’t been a great option – until now. BNSF Railway and J.B. Hunt are partnering up with their new Quantum Service to beef up rail service by incorporating more sophisticated forecasts, providing priority drayage and rail movement with the promise of more consistent transit times. The pricing will fall somewhere between traditional rail and over-the-road service. If you’re looking for a cost effective inbound freight solution without the long delivery windows of traditional rail, Quantum is worth checking out.

PRODUCT SOURCING

NEAR SHORING IS MAXING ITS LIFTS

Is near shoring production to Mexico on the rise and pumping some serous iron? According to a survey by Capgemini, that’s just the case. A massive 79% of consumer products and retail companies are diversifying their supplier base, with 71% choosing to produce some of their goods in nearby regions. Add to it that Mexico is offering billions in incentives to attract manufacturing operations in its country, and you have a recipe for supply chain production growth. But why the move towards nearshoring and away from overseas production? Apparently, both costs and geo-political concerns are driving the change. And with close proximity to the US, more favorably political relations, and low costs of employment and equipment, Mexico appears prime to capitalize on the opportunity.

WAREHOUSE OPERATIONS & SUSTAINABILITY

RETURNS & PACKAGING ARE GETTING WORKED OUT

Need help avoiding the wave of returns coming for the holiday season? There’s a couple of tools you can add to your workout routine to combat all of the loses, according to Software Advice. Most notably, SMB’s are using third-party experts (3PL companies) to manage returns (49%), as well as refining the triage process to increase the amount of products that can be resold or recycled. If done properly, 35% say they can recoup over half of the cost of a returned product. One last workout tip to use is tapping into the consumer market for recycled and refurbished products, as consumers are becoming increasingly interested in getting a break at the cash register in return for purchasing a refurbished item.

And don’t forget to add sustainability to your workout schedule. It isn’t as complex as it seems. In fact, it could be as simple at ensuring the right fit…of packaging, that is. Using oversized boxes, poorly fitted boxes, or excess filler and waste not only reaps havoc on the environment, but could also be costing your bottom line. Need inspiration on how to tackle this overwhelming challenge? Look to Shopgoodwill.com. By introducing right-sized packaging, production and processing of a broader range of box sizes, and using light weight packaging materials, they surpassed their objectives.

WAREHOUSE AND LOGISTICS JOBS

WAREHOUSE RECRUITING IS ON A LEAN DIET

If you run or operate a warehouse or logistics business, you’ve no doubt experienced the challenges with finding good employees – especially in recent years. It’s been downright tricky finding and keeping good talent - like feeding on a very restrictive diet. In fact, the latest research from the U.S. Bureau of Labor Statisitcs shows another down month in warehouse labor employment statistics in October. And according to the U.S. Chamber of Commerce’s recent survey, there are only .71 workers available for each open logistics job in the first seven months of 2023? Ouch!

But the silver lining for the future comes by way of the 2023 Biannual Young Professional in Supply Chain Report. 96% said they are excited to have a career in supply chain. They also said that LinkedIn and Facbook were the top places they are using in their search. So if you’re running into a brick wall finding the right fit, perhaps targeting some of the recent grads on these social channels will reap a fruitful harvest provide a welcomed cheat day meal! But be sure to address negative perceptions!

WAREHOUSE QUICK DELIVERIES

WAREHOUSE REGULATIONS CAUSING HEARTS TO RACE, AND MORE…

• New Canadian law forces brands, retailers, and importers to take responsibility to identify child and forced labor

• Small businesses may feel the crunch of new warehouse protection legislation aimed at productivity quotas

• USPS posts a massive $6.5 billion loss 

• BigCommerce the latest to implement layoffs, ousting 7% of its global marketplace

• Two charts that show why we’re in a freight recession 

• See the Amazon weightlifting robot that can lift up to 2,500 pounds

• Skyrocketing e-commerce demand is driving increases in cold storage development