How to Outsource Retail Logistics


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SHOPPING FOR SOLUTIONS


Retailers are well attuned to the changing dynamics of consumer buying habits and the strategies necessary to ensure their supply chain can match inventory to demand. But ensuring product is staged in the right places at the right times is only part of the challenge; engaging the eye of the captive shopper with strategically placed product displays and storefronts keeps inventory moving and business growing.

Retailers intent on maintaining or gaining competitive market share are constantly looking for ideal locations to open new store fronts as well as remodeling existing locations with new fixtures and display cabinets, fitting rooms, and service areas. They might also introduce revised branding schemes through updated floor coverings, wall dÈcor, and signage. The retail outlet is a revolving door spinning to the whim of customer preference and convenience.

But managing retail fixture movement presents an entirely different supply fulfillment paradigm—one that doesn’t necessarily integrate with general merchandise flow because of greater variability and the special care required in delivering, then setting up fixtures and displays.


Businesses typically include fixtures in their interior store designs, which are drafted by store planners, designers, or architects. These blueprints may then be shared among numerous parties (real estate, construction, consultants, public relations, and advertising) in addition to the vendors and transportation providers charged with managing the delivery.

With so many non-transportation vendors involved in the process, the number of variables increases dramatically as retailers consider necessary due diligence for moving forward with a retail logistics project: "What carrier/provider do I use?"; "What market rates for capacity are available?"; and "How do I handle fixture inventory from production to installation?"

Getting a new retail outlet up and running requires a collaborative effort that often leaves retailers outsourcing project management to third-party intermediaries. From providing "pop-up" warehouse space to locating carrier capacity, outsourcing retail logistics can be a big sell for growing businesses.


SHOPPING FOR SOLUTIONS

Core carrier programs and routing guides are typically the culmination of a joint effort between a retailer and a carrier to analyze historical shipping patterns and lanes, forecast future volume based on that analysis, and agree to mutual capacity and price commitments for a specified period of time. Many retailers use these programs on freight with “predictable” characteristics: order quantity, equipment requirements or restrictions, and origin points based on manufacturing or inventory location as related to customer demand. The characteristics of “retail logistics” specific to new store openings, re-branding, and remodels are usually project-, geography­, and time-specific. As such, they are not necessarily predictable based on history and, to some extent, must consider the fickle consumer’s expectations.

The project-based activities inherent to retail logistics have extreme cost and time constraints that require service providers who can provide extraordinary service:night and weekend deliveries, specialized equipment, and “high-touch” product handling. As a result, retail companies may have to source providers from a completely different pool than their general merchandise freight.

Retail logistics projects also have unique warehousing and staging requirements. Fixtures are often made in a JIT or near-JIT environment, moved from vendor production floor to a cross-dock or warehouse space, then finally staged for store delivery based on a construction or remodel schedule.

Retail companies may choose not to route “fixture” freight through general merchandise channels, instead relying upon the expertise of service providers who can contract short-term warehouse space, assign dedicated resources for tracking and tracing, and select qualified carriers based on each project’s unique requirements.

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