GROCERYSHOP 2018 PERSONA LAST MILE DRIVER

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1 GROCERYSHOP 2018 PERSONA As the Last Mile Driver, you want to crack the code in fulfilling the Last Mile delivery challenge while sustaining profitability. This means giving online shoppers the ability to choose their delivery or pickup, while ensuring all orders are 100% fulfilled to customer s specifications, and on time. You want to use supply chain technology to differentiate, provide order visibility and traceability, and gain customer trust. YOU REALIZE: ROADBLOCKS TO TACKLE: There s an opportunity to differentiate and retain your customer base by having an online presence, quick and efficient in-store pickup and home delivery service, especially as online grocery sales grow quickly. Cold chain challenges due to lack of trust that perishables products are stored at the proper temperature during the delivery and/or pickup process. Produce, frozen and refrigerated foods remain low on the list of satisfaction for online grocery shoppers. Online shoppers want full visibility to where their order is at any given point in time: when it was packed, when it was shipped, expected time of delivery. Physical layout of existing stores challenges grocers to reinvent stores to best serve evolving shopper needs. It may mean reconfiguring physical space to support online business offerings (e.g., storage, Customer Service Center for pickup, curbside pickup, drive-through). Home delivery is currently the preferred fulfillment option in the US, with 69% of households saying that it appeals to them (2017 Nielsen and FMI survey). However, the click-and-collect model (pickup from your local store or other location after placing an order online) is one to watch, as millennials prefer click-and-collect over home delivery. Lack of capital expenditure to invest in people and technology to solve the cold chain dilemma and physical store infrastructure. NEED HELP? STOP BY THE CONCIERGE BOOTH #501 ffcinfo@fitforcommerce.com

2 RELATED SESSIONS Date Time Location Type title Oct 29 9:15-9:55AM Track Room 2 Subscriptions, Auto-Replenishment, and More Oct 29 9:15-9:55AM Technologies Powering Cutting-Edge Transportation and Fulfillment Oct 29 5:00-5:40PM Optimizing Product and Packaging for Delivery 8:30-9:10AM Track Room 2 New Store Formats and Footprints 3:30-4:10PM Emerging Grocery Fulfillment Models and Strategies 4:15-4:55PM Exploring New Delivery Options 5:00-5:40PM Track Room 2 Creating Seamless Omnichannel Experiences 5:00-5:40PM Advances in Pickup Options RELATED RESOURCES IN THIS PACKET To help you navigate the expo hall, check out the category map for some of the solutions and technologies that you will want to explore. FitForCommerce has also developed Best Practices Checklist and Key Questions to Ask Providers designed to help you prepare and make the most out of your time at Groceryshop. NEED HELP? STOP BY THE CONCIERGE BOOTH #501 ffcinfo@fitforcommerce.com

3 Logistics: Best Practices A logistics strategy includes all components of the fulfillment process. Provider costs, service levels (product availability, lead time), value-added services (packaging, labeling), returns and flexibility (alter strategy based on customer needs) should all be included. Do not focus on just one of these areas as they all are integrated pieces of the supply chain. 6. Consider using multiple carriers, ship by lowest cost. Many retailers only ship via one carrier as it is easiest. Since each carrier calculates costs differently, using multiple carriers and selecting which carrier and method to use for each order can help them save shipping costs and reduce transit times for customers. Having multiple shippers may help you offer shipping upgrades with little additional cost. 2. Plan for your demand, predict it. Demand forecasting is not an exact science, but it is getting closer. Demand forecasting can be used to understand your future logistics needs and help you plan for them. 7. Workflow planning is key when implementing a Warehouse Management System. Inbound workflows start with receiving the products at the warehouse and how they are put away. Outbound workflows start with the fulfillment of the product when it is picked. The WMS software should be able to be optimized to your current workflow process. 3. A flexible order-sourcing strategy can reduce logistics and distribution costs. Order sourcing is often set up to be fulfilled by the closest geographical location. However, other factors such as lead time, subsequent orders, manufacturing costs, backlogs, availability and reliability of transportation can influence the best source for the order. 4. Understand your order profiles, mix of products, size of orders, and lines per order, when establishing your picking strategy. Since picking product is the most labor-intensive process in the warehouse, optimization based on your order profiles is critical. Often, 80% of the orders are made up of 20% of the SKUs, optimizing the fulfillment process can drastically reduce labor costs. Place more frequently picked products in the easiest to reach locations, lay out pick areas to minimize excess travel, and compromise between manual and automated systems. 5. Control the returns process through returns authorizations. These pre-approved returns will simplify and expedite this process. RA (or RMA return merchandise authorization) labels can be shipped with the order to eliminate the need for a customer to ask for an RMA prior to returning the item. 8. Utilize handheld scanners in the return process with RF screens of RMA#, SKU, quantity and disposition, for optimization. The improvement in labor efficiency will quickly pay for the cost of implementation. 9. RFID technology enables visibility of the movement of goods throughout the supply chain. When an item is used, purchased, or consumed, then triggers initiate the correct and appropriate action from the supplier all the way to the raw goods procurement. Global Data Synchronization Network (GDSN) should be implemented as well, to ensure all trading partners are using common data standards. 10. Companies that ship more than 500 packages a day should consider replacing their manual work processes with an online packaging system. Online packaging systems can reduce space (no need to store packing materials), improve time and save money (by creating operational efficiencies).

4 Logistics: Key Questions to Ask Providers Company Features How long have you been in this business? 2. What size or types of clients fall into your sweet spot? What key features are included in your solution? 3. What type of products fall into your sweet spot? 4. What peripheral or supporting services do you offer (e.g., technology, process analysis, transportation)? 5. Who are your current partners? Who have you worked with in the past? What features are currently missing, on your roadmap, does management love? 2. What is your product s competitive advantage over other packages? Why? 3. Do you and how do you support various order sourcing strategies? Drop-ship networks? Splitting of palettes? 4. How do you support fulfillment functionality? 5. How do you support RFID technology? Products / Services What type of training do you provide? 2. What support services are available? Are there human beings I can reach during reasonable hours (chat or phone) or do I have to wait over 24 hours for an response or callback? b. Is your support team located in the US? c. What is your SLA for support issues? 6. Do you and how do you support a third-party model versus a private warehouse model? 7. Do you and how do you support on-line packaging? 8. How does your platform integrate with other Order Management Systems, including back-office systems, other online shopping channels and/or point solutions? 9. Do you have a management console? 3. Do you have a support knowledgebase, community forum, or applications that are shared by customers? c. 4. If you provide fulfillment services, where are your distribution centers? 5. If you provide fulfillment services, are there any types of products that you can t fulfill? 6. Which third party product technology ecommerce platform providers have you worked with in the past? Do you have your own? 7. Which third-party product technology Order Management System platform providers have you worked with in the past? Do you have your own? 8. If you provide Call Center services, what are your minimums? What type of skill sets (up-sell, support, moderation) do your reps have? What can I do with it? Is it web-based, application-based, other? b. Does it include reporting and a dashboard? Please describe your reporting capabilities and provide a list of standard reports. Pricing How do you price your services? Based on Revenue or per activity? 2. What are your specific price drivers? 3. Are there any additional fees (e.g., implementation, transaction costs, revenue sharing)? 4. What s the length of a typical deal/contract? 9. Do you provide customs brokerage, duties, taxes and export management for international shopping? How do you handle this? Is this managed in-house or through a partner?

5 Shipping: Best Practices Shipping options, cost, and timing should be shown in the cart. Customers expect to see the shipping charges (and taxes) in the cart as early on in the transaction process as possible, so there are no surprises. Understanding shipping rates and seeing threshold shipping promotions in the cart will entice customers to either add items to get free shipping or add them now instead of ordering again later. 6. Exceed expectations when shipping. Notify customers of the worst case shipment dates (you can do this yourself if you manage shipping, or if you integrate with a carrier, choose the last possible date) but try to process orders as soon as possible. Strive for same or next-day shipping, as this is becoming standard. Orders that are shipped after the expected ship date will cause customer dissatisfaction. 2. Keep shipping rates simple. Customer sensitivity to expensive shipping only compounds customers pain with assessing complex shipping rate calculations on your site. To keep it simple, try using tiers for shipping pricing, calculating rates by order value, or add a custom price. If you need to add an oversize charge if items warrant it, then showcase it next to the base shipping price. Ensure this information is super clear in your checkout process. 7. Immediately and post tracking in their order history. shipping notifications should include links to the shipping details page the carrier s site, where the tracking information can be viewed immediately. Order history that links to tracking information encourages creation of an account and return visits. 3. Do not try to profit from shipping High shipping cost is one of the biggest reasons for cart abandonment. Customers purchase more often from web sites with economical shipping rates. If you cannot charge by tiers since the cost to ship some products if very high, consider charging the actual shipping rates generated from your carriers (charge cost). Avoid additional handling charges as customers think they are being over-charged. 4. Consider free shipping promotions above your average order value to increase your conversion rate. Free shipping is almost standard these days, and customers have come to expect it. If your AOV is great than $70, put in a shipping promotion at $100, and then show threshold messaging in the cart to show them that they only need to purchase another $30 to get free shipping. Message the user continuously throughout their shopping experience about free shipping and what qualifies them for the promotion. 5. Clearly explain your shipping policies. Putting shipping rates, countries you ship to, shipping promotions and delivery time estimates on the product page, in the cart, or in static page popup, help inform the customer of the total cost of a purchase. In the cart, shipping methods and delivery dates should be clearly explained. You should also have a detailed Terms or FAQ page that outlines your shipping policies for legal reasons. 8. Audit your shipping costs. Evaluate if you should charge shipping if the fees are more than ten percent of the cost of the item. Another alternative would be to bundle these types of items with other items. 9. Use branded packaging to build brand awareness and reduce the rate of unclaimed packages. After the shipment was received, the box may still be in the recycle bin, promoting your website; brand your boxes. Also, people who accept your shipments like to know who it is from before accepting. 10. A/B testing can determine shipping costs and promotions effects on customer acquisition and AOV. If shipping promotions don t increase conversions, stop leaving money on the table. 1 Consider using multiple carriers, ship by lowest cost. Many retailers only ship via one carrier as it is easiest. Since each carrier calculates costs differently, using multiple carriers and selecting which carrier and method to use for each order can help you save shipping costs and reduce transit times for customers. Multiple shippers may help you offer shipping upgrades with little additional cost. 12. Develop a shipping methodology appropriate for your products. Different calculation methods are better for different products. If actual shipping rate calculation is not possible, developing a fair shipping methodology, and communicating it, will also reduce customers concerns about being charged too much.

6 Shipping: Key Questions to Ask Providers Company How long have you been in this business? 2. How many clients have you sold? Lost? Why? 3. What size or types of clients fall into your sweet spot? 4. What peripheral or supporting services do you offer (e.g., technology, fulfillment, packaging, reporting)? 3. If you do provide tracking information, how soon is it available? What is the process for the customer to review the tracking information? 4. Does it provide updates to shipping times via the integration? What else does the integration provide me? 5. Do you have multiple delivery times for your overnight or 2-day services? If so, what are the price differences? 6. What is your cut-off time for your overnight services? How do holidays affect this schedule? Products / Services 7. Please describe your invoice auditing process? 8. How does a customer inquire about their order? What information do you need from my company to implement your solution? 2. What optional services do you provide as part of your solution? 3. How long to integrate to your solution? What skills does my organization (or hired third party) need to integrate this solution into our business? 4. What is your process for working with a third-party technology ecommerce provider? 5. What is the process of getting our products from our distribution centers to your shipping facilities? 6. Is there a minimum amount of items needed to schedule multiple pick-ups at our distribution facilities? 7. Do you offer any type of packaging services? 8. Are there any types of products that you will not ship? 9. Do you offer any type of services to optimize the shipping process? To minimize the shipping costs? 10. What type of reporting do you have in place to monitor my shipping process? 1 Do you have any type of analytic reporting? Pricing What is the pricing model for your solution? Do you offer any type of flat-fee pricing? 2. Do you offer consolidated package pricing for same day/location shipments? 3. Are there volume discounts for your shipping fees? Are there ways to reduce the costs of shipping? Features What is the process if there is a lost shipment? For tracking it? Who is ultimately responsible? Do you have a solution that I can integrate with my ecommerce site to calculate shipping? What information and data is needed? Does it calculate real-time shipping? 4. Are there any additional fees (e.g., implementation, transaction costs, handling)? 2. What type of tracking information do you provide as part of your service?