Jun 21, 2021 | Blog, The Packet
Front and Center
The Future of Luxury E-commerce
In a joint press release on Wednesday, two mega corporations from distinctly seperate industries announced a first-of-its-kind strategic partnership that may define the future of luxury e-commerce.
French luxury goods giant, LVMH, has entered into a 5-year deal with Google Cloud to leverage artificial intelligence and machine learning technologies to sell products for their elite brands like Louis Vitton, Christian Dior, Tiffany, Marc Jacobs, and top-shelf alcohol brands like Moët and Hennessy.
Will this make it more affordable?
HAHAHAHA. HAHAHA. LOL. Good one, no. But the AI will be used to collect customer data and deliver personalized experiences to their high-end customers when they shop online. Not only that, the technology will also be used to update their IT infrastructure, improve their demand forecasting, and optimize their inventory management across stores.
Take a page out of their golden book.
This partnership brings new-age data analytics capabilities to a historically white-glove, high-touch market. The pandemic-fueled lockdowns have accelerated the need for luxury brands to execute their e-commerce shopping model and help their consumers adapt to changes; for instance, not being able to touch and see their high-priced items before they buy.
LVMH Managing Director Anonio Belloni said, “The last 18 months have been transformational,” and made clear the “need to leverage data.” The goal is to make a customer’s experience “more fluid.”
Without this sort of in-person interaction and added customer service, luxury brands must compensate with a smooth and considerate online retail experience. This includes making sure the logistics and supply chain consistently and reliably pulls through on delivery.
Back of the Packet
Freedom!
This week, both the Senate and the House passed a bill that would make Juneteenth (AKA Freadom Day) a national holiday, and now just needs one more signature from the President. This holiday commemorates the day in 1865 when slavery officially ended in the US, and would be the first federal holiday added to the US calendar since 1983. Many organizations like Mastercard, the NFL, and others have embraced the holiday by giving employees the day off.
A Peloton of Creepers
On Wednesdaya, McAfee warned that the Peloton Bike+, along with other public bikes in gyms and hotels, could be compromised with a USB to allow hackers access to forward-facing cameras. All hackers need is physical access to the bike to install fake Netflix or Spotify apps. Peloton then issued a software update and press release to prevent this type of unauthorized access, but if anyone wants to actually watch me sweat/cry/spin to Adele, I’ll allow it.
Generally Electric Motors
General Motors announced increases to its electric and autonomous spending to $35B by 2025, a 30% increase from targets announced last November.
ShipHero News
Convenience Vs. Carbon
Expedited shipping and last mile delivery grew with the pandemic-led convenience craze. Now that consumers are returning their focus to sustainability, brands and 3PLs must balance convenience vs. carbon footprint. But how? The answer… read our latest blog to discover why carbon-neutral shipping is changing the e-commerce industry, and how your brand can offer it today.
How E-Commerce Brands Thrive In the Chinese Market
Despite China’s developing economy and huge population, their market is notoriously difficult for foreign businesses to survive, particularly those with a physical presence. Popular companies like Walmart, Home Depot, and Mattel have tried and failed to create a steady business in China, due to conflicts with the government, failing to understand their customers, or just bad luck. With 48% of foreign businesses failing in China within their first two years, these tips might save your business when entering the Far East markets.
Jun 17, 2021 | Blog, Case Study
You may have a fully stocked makeup bag with brushes, powders, glues, creams, pencils, primers, and more, but still struggle to get the LATAM look. That’s why ShipHero customer, ILOVEPINCH.com, solves your cosmetic challenges with their 9-step, 10-minute makeup routine for the perfect look, every time.
When their breakthrough cosmetic line and application system first came to market, the ILOVEPINCH.com team struggled to keep up with initial demand. They could only pick, pack and ship 100 orders per day, and the costs from mis-picked products and supply chain errors were adding up. After a trip to a fully functioning fulfillment center, they knew it was time to give their fulfillment operations a complete makeover.
“With ShipHero, we now have a replicable ecommerce fulfillment model that allowed us to grow 3X (300%) during the pandemic, and base our whole business model on an e-commerce distribution channel. Nowadays, it is easy for us to expand our operations, faster and with less investment, to other cities and allow our ecommerce to grow exponentially.” — Alfonso Atencio, CEO and Co-founder of ILOVEPINCH.com
With the pandemic-led boom in e-commerce, especially for beauty and cosmetics brands, we had to sit down with ILOVEPINCH.com CEO and Co-founder, Alfonso Atencio and learn more about his business and supply chain operations. Read more about our journey together in this case study.
Alfonso, please introduce us to yourself and your business.
My name is Alfonso Atencio, and I’m the CEO and cofounder of ILOVEPINCH.com. We are a DTC cosmetics e-commerce business aiming to disrupt the LATAM beauty industry by making affordable yet high-quality beauty products for Millennials.
All of this, while committed to being cruelty-free and having a sustainable supply chain. We currently have operations in Colombia, USA, Canada and Puerto Rico, and this year we are expanding our operations and fulfillment centers to Mexico and Perú.
What was your fulfillment model before switching to ShipHero?
Before ShipHero, logistics was a major pain point for our operations. We handled each order informally, and our logistics department generated a considerable amount of back-office and duplicate activities.
On our best day, we could pick and pack at most 100 orders. We also had more than 5% mistakes on product allocation for orders, and this generated an even more cost due to returns.
What was the moment you knew it was time for a switch?
During the pandemic, online purchase behavior skyrocketed, and we were forced to open a new warehouse and fulfillment center in another city in our country, Bogotá.
Besides the growth, just before COVID started taking over in February 2020, we visited one of Amazon’s FBA centers. Instantly we knew we had to take our logistics to the next level.
It was important for us to control operations, mitigate logistics pain points, and reduce overhead costs for the new warehouse. We wanted to implement technology and achieve efficiency for our inventory management, picking, and packing processes. That was when ShipHero came into the picture, and we were able to take our ecommerce to the next level.
It was easy when you started with such a solid foundation. Why did you choose ShipHero? (besides the sweet puns)
Simply put, easy integration with our e-commerce platform, a user-friendly interface, and a complete order and warehouse management system.
What really set ShipHero apart, was the “coolness” and how seamless the tasks looked on the Endeavour App. We knew we had to pick a platform and WMS that understood and could adapt to the new e-commerce trends, integrations, and mechanics.
Also, another key factor was the ability to create specialized rules and interpretations, so that we could make tailored order fulfillment processes that took into account our own conditions and warehouse setup.
What advantages have you seen since switching to ShipHero?
Since integrating with ShipHero, we have boosted our efficiency. We surpassed our previous maximum of at most 100 orders daily, now being able to pick 250-300 orders a day just with one picker.
hipHero allows us to virtually control a new warehouse with a small team in another location, which generates considerable savings by decentralizing our operations and reducing freight costs per order.
From an operations perspective, we also drastically reduced our product allocation mistakes, returns and logistics overcharges.
The operational advantages have been numerous, namely:
- Reduced freight cost due to efficiencies
- Reduced product selection mistakes (AKA mis-picks), therefore fewer returns
- Complete traceability with more automation, by integrating directly with our ecommerce and updating order status. (Before, we had a dedicated person that updated manually each order status).
With ShipHero, we now have a replicable e-commerce fulfillment model, which allowed us to grow 300% during the pandemic and base our whole business model on an e-commerce distribution channel. Nowadays, it is easy for us to expand our operations to other cities faster and with less investment, allowing our e-commerce to scale exponentially.
Follow Alfonso and ILOVEPINCH.com on social media and check out their websites below.
https://shopilovepinch.com/
Want to be featured in our case study?
If you would like to share with us stories about your ecommerce experiences, whether it’s how you started your business, what opinions you have on the stories we share, or if you just feel like venting… we’re here for you.
Shoot us an email and you could be featured on an upcoming Case Study, our critically-acclaimed weekly news segment The Packet, or if you’re lucky, you could be invited to join one of our many Podcast episodes!
Jun 16, 2021 | 3PL Warehouse Management, Blog, Fulfillment, Warehouse Management Software
Despite China’s developing economy and huge population, their market is notoriously difficult for foreign businesses to survive, particularly those with a physical presence. Popular companies like Walmart, Home Depot, and Mattel have tried and failed to create a steady business in China, due to conflicts with the government, failing to understand their customers, or just bad luck.
This is actually pretty common across the board. In fact, 48% of foreign businesses fail in China within their first two years, according to the 2013 Australia-China Business Week conference.
China is a bureaucratic one-party state, which means that the lines separating private and public enterprises are very blurry. For this reason, the government tends to own and heavily support Chinese companies, which is one of the reasons why most foreign businesses fail so quickly. They have to jump through bureaucratic hoops, jockey against local competition for market share, and often compete directly with the Chinese government itself.
Getting Started
Despite the fact that e-commerce is estimated to be a $250 billion market for U.S firms in China, in an unexpected twist, smaller DTC companies have had more success in the Chinese market, compared to the likes of major retail brands such as Walmart.
To capture their fair share, international and local companies across industries are partnering up with Chinese e-commerce platforms like JD and TaoBao to create deals that allow the e-commerce platforms to sell their products directly to Chinese consumers. Chinese third-party logistics (3PL) companies are then contracted to help e-commerce companies keep up with their delivery or logistics.
The products are also usually held in Chinese warehouses, waiting for distribution or last-mile delivery from gig workers or delivery companies. In China, order fulfillment must be flexible to keep their customers satisfied. When a customer purchases the product, they only have to use one account due to the e-market’s level of integration, and they typically receive it within just a few hours or days.
Accessibility
With 800 million residents in China using internet services, China is the most connected country in the world. As a result, these users are finding the adaptability and accessibility of DTC businesses to be particularly alluring. These businesses, unlike foreign ones, can distribute their products at a moment’s notice using local resources and marketplaces, which makes them difficult competition for foreign businesses.
Millions of users visit e-commerce sites like Tmall, JD, and TaoBao to do their daily shopping. It’s become a staple of their everyday life. By leveraging these companies’ existing logistics networks, foreign competitors are better equipped make use of China’s regional infrastructure.
A New Strategy
More and more companies prefer to let local Chinese companies sell their products, rather than investing in the treacherous retail markets. If the customer wants to avoid especially crowded commercial districts, online markets are their best alternative. Most e-commerce companies are using customer behavior data to enhance website layout, presentation, and product lines to make their business more appealing to their customers.
E-commerce is the future of shopping in China, and many other countries as well. In 2019, e-commerce sales in China were estimated to be 36.6% of total sales, which is a huge jump from 12.4% in 2014. By 2023, e-commerce is expected to make up over half of all sales, at 64%.
There still exists a rather large demand for foreign products in China, given their elevated status symbol and expectation of high-quality. However, finding these products can be difficult for Chinese consumers because of the consistent failure of foreign businesses to establish their presence in the Chinese market. Using e-commerce and online shopping, customers can get connected to products they want, which is a win-win for the DTC company, the e-commerce site, and the customer.
Read on to learn some important tips from the most successful DTC brands about what makes their businesses so successful.
3 Tips From The Experts on Entering the Chinese Market
1. Utilize Existing Infrastructure
Don’t be afraid to use third-party platforms as opposed to your own. Customers in China prefer shopping through platforms like WeChat and Tmall. There is a surprising amount of freedom for brands to make their own space on these platforms.
When asked by Adweek, Allbirds International president Erick Haskell said “It’s not like being on other third-party platforms where it’s hard to control brand presence and pricing. We can run our own retail, have our own ecommerce site [on Tmall].” His statement reflects how, despite popular western perception, Chinese platforms allow plenty of freedom for brands to experiment and express themselves.
2. Adapt to a Younger Audience
Chinese consumers are 10 to 15 years younger than consumers for the same brands in the west. This has a pronounced effect on not just marketing, but how brands present and behave themselves in general. Christina Fontana, the Head of Fashion and Luxury for Tmall, said this about how Chinese customers differ from westerners, “Consumers are very young and demanding. They want to know about brands and their craft. It’s important to tell that story.”
In general, brands will go to great lengths to demonstrate the quality of their products by including extra information about their manufacturing process, materials, location, and work conditions.
3. Take Feedback From Customers
Chinese consumers can be very vocal about their purchases. In fact, Fontana says that 80% of all customers on the Tmall platform leave feedback. Feedback has become so vital that the platform now includes a feature that lets brands directly take the feedback they receive and use it in their product development.
The takeaway from all of this is that customers want to be engaged directly with the brand from which they are buying. They want to know that they have a voice in how the product is shaped.
Wrap It Up
E-commerce brands that want to grow their global empire should find alternate routes in difficult markets like China. With their accessibility, adaptability, and huge inventory of in-demand products, it’s easy to see why more and more brands want to establish an online presence overseas. The question now becomes, will your brand be next to join the success of these DTC businesses?
Jun 14, 2021 | 3PL Warehouse Management, Blog, Fulfillment, Warehouse Management Software
Fleets of cargo planes grow larger, drones soaring the skies replace bike carriers on the ground, and delivery trucks weave through city streets in hectic routes. Why? All for the sake of convenience and speed of delivery for your e-commerce goods.
Recent estimates indicate that e-commerce sales will rise to $5.4 trillion by 2022. At first glance, the carbon-intensive shipping and delivery associated with e-commerce, especially expedited shipping and last mile delivery methods, may seem to contrast our collective value of environmental sustainability. But that doesn’t have to be the case.
In this post, we’ll explore how shipping companies are pursuing new strategies for carbon-neutral shipping and explore what that may mean for the future.
What Is Carbon-Neutral Shipping?
In recent years, terms like “carbon-neutral” and “carbon footprint” have become part of our common vocabulary. But what do they mean? What is carbon-neutral shipping, and why do you need it?
The Definition of Carbon-Neutral
“Carbon” is shorthand for the greenhouse gases associated with climate change; namely, carbon dioxide and methane. A company’s “carbon footprint” refers to the amount of greenhouse gases it puts into the atmosphere. Recent green initiatives have prompted many corporations to reduce their carbon footprint by mitigating their emissions.
Carbon-neutral shipping is an essential strategy for reducing a company’s carbon footprint. On one hand, it’s impossible to eliminate all carbon emissions from the shipping process. But companies can pursue carbon neutrality through various methods.
Why Consider Carbon-Neutral Shipping
Carbon-neutral policies protect the environment, but they also offer some immediate, practical benefits to companies who pursue an eco-friendly business strategy. First, many customers prefer to rely on a company that embraces sustainable business practices. That is especially true of millennials and young adults. By some estimates, 87% of customers prefer a company with sustainable business practices.
Additionally, the same sustainable practices that reduce your carbon footprint also work to eliminate waste. So while carbon neutrality may seem like a heavy commitment, it can ultimately help you cut costs while maintaining an eco-conscious customer base.
How to Achieve Carbon-Neutral Shipping
Currently, it’s simply not feasible to completely eliminate all greenhouse gases that your shipping method produces. But that doesn’t mean it’s hopeless. There are several steps that you can take toward carbon neutrality.
Step 1: Determine Your Emissions
First, you need to determine the impact your company is already having on the environment. The Carbon Fund provides a helpful Business Emissions Calculator that you can use to determine your company’s carbon footprint. You can also break down your carbon footprint by category, which may help you pinpoint the impact your shipping process has on your company as a whole.
Step 2: Re-evaluate Your Packaging
Shipping supplies are essential for protecting e-commerce products during transport. But some of these products do little more than make waste. Did you know that between 1950 and 2015, less than 10% of the world’s plastic was recycled? The rest still clogs our landfills.
Consider investing in recyclable and biodegradable materials, such as the following:
- Custom-made shipping boxes to eliminate wasted packaging
- Biodegradable air pillows
- Sealed-air packing peanuts instead of Styrofoam
- Reusable refrigerant gel packs instead of dry ice
These materials may be an initial financial investment for a shipping company or 3PL, but over time may prove to be more cost-effective than the products you’re currently using.
Step 3: Redesign Shipping Routes
Many logistics companies can help you analyze your shipping routes and find ways to optimize your efficiency. You may even be able to consolidate your shipping needs with third-party LTL carriers.
Step 4: Purchase Carbon Offsets
A carbon offset is any financial contribution to environmental projects and funds. These “carbon credits” can be used to offset the impact of your shipping process. However, this practice is often criticized as merely a financial escape hatch for a company that doesn’t want to make other changes toward sustainability.
Companies that Advertise Carbon-Neutral Shipping
Many e-commerce companies and 3PLs already advertise carbon-neutral shipping and delivery, but several notable shipping companies are committed to reducing emissions and pursuing sustainable shipping models.
UPS
When you use UPS, you have the option of purchasing carbon offsets to mitigate the environmental impact of the emissions used during the transport. The carbon-neutral option used by UPS is verified by SGS, an inspection, and a verification company, offering one of the most reliable systems for carbon offsets.
FedEx
FedEx is making a host of changes in the hopes of becoming fully carbon-neutral by 2040. Currently, the company offers carbon-neutral shipping envelopes, and their plans involve electric vehicles, energy-efficient aircraft, and other innovations to achieve sustainability.
ShipHero
ShipHero understands the fast-paced needs of the shipping industry, which is why we provide two-day ground shipping supported by advanced logistics tools powered by AI. Rather than rely on centralized hubs, ShipHero brings products directly to customers’ doorsteps in a shipping method known as distributed fulfillment, which is a proven strategy for minimizing emissions and reducing costs.
The Future of Eco-Friendly Logistics
Moving forward, we can expect several innovations in emerging technology to lead the way in the first half of the 21st century.
Electric Vehicles
Electric vehicles have already become standard fixtures on America’s highways, and we can imagine that soon these cars will be utilized as an efficient means of shipping. That will drastically reduce, if not eliminate, the carbon released into the atmosphere from combustion engines.
Advanced AI for Logistics
Logistics software will soon govern every company’s delivery route, providing real-time optimization based on traffic patterns, weather conditions, and other considerations relevant to the delivery route.
Emphasis on Warehousing Facilities
While many innovations will focus on the trucks and routes themselves, there will be an increased emphasis on the carbon emissions and environmental impact of warehousing facilities. We might even expect federal regulations to stipulate the kinds of packaging and waste produced by shipping facilities, prompting managers and others to pursue sustainable practices at every level of the shipping process.
Wrap It Up: A Sustainable Now, a Better Tomorrow
These innovations may seem like significant investments, but these carbon-neutral strategies are essential for maintaining our environment for future generations. By embracing change today, we leave our children a brighter tomorrow. Cue the American flag… and scene.
Jun 14, 2021 | Blog, The Packet
Front and Center
How the internet got broked :-P~
If you were to be perusing the interwebs early Tuesday morning, you would have immediately noticed something awry. Websites like Amazon, Reddit, Spotify, eBay, Twitch, Pinterest, many news sites, and even government service pages were showing Error: 503 messages, which typically appear when a website is under maintenance. Many took to message boards to find the cause, and even though service was restored before people started hoarding toilet paper again, it wasn’t until 24 hours later that a root cause was identified — and it turns out that it was a single, Fastly customer… imagine being that person.
No. What’s Fastly?
Fastly is a San Francisco-based cloud computing service provider that effectively makes loading times faster for websites (ah, Fastly, got it.) Yeah, it also optimizes images, videos and other large content to show up quickly when you load a web page. It does this by storing some website data from international websites in local data servers, instead of having to fetch them from faraway host servers every time. This “edge computing” method, which can be thought of as distributed fulfillment but for information, also performs various cybersecurity functions.
So who fudged up? I want names.
Okay psycho. Fastly sits between back-end web servers and the front-facing internet that we see, so any error in their system can cause entire websites to be unavailable.
On June 8, one UNNAMED customer (but pictured at the end) accidentally triggered a bug during a “valid configuration change”, which caused 85% of the company’s network to display errors. Within 60 seconds, the Fastly team identified and disabled the configuration, and within 49 minutes, 95% of the network was operating as normal. Quick work.
Could it happen again?
Fastly announced that it will be taking several steps to avoid outages in the future, including root-cause analyses and a complete evaluation of their bug-fix and deployment processes.
If you feel stressed by more and more companies falling victim to ransomware attacks and now the internet is going down, it may help to step away and take a breather this summer.
Want a free getaway?
Use code SHIPHERO123 at your front door to walk outside and enjoy the roses. Check out this botanical garden directory for roses near you, and tell them ShipHero sent you if you want to confuse the staff.
Back of the Packet
????Heard it Through Pipeline????
On Monday, the Justice Department announced that federal officials had recovered most of the Bitcoin ransom paid out for the recent Colonial Pipeline ransomware attack. While they did not specify how exactly they were able to track down the funds, feds said that they had recouped 63.7 of the 75 bitcoins ($2.3 million of the $4.3 million), exposing a common misconception that Bitcoin payments cannot be traced.
Ready Player 2
Meet Matt Furlong and George Sherman, Gamestop’s new CEO and CFO respectively, and they’re both Amazon-executive alumni. This move continues to signify the Reddit-obsessed gaming company’s efforts to completely level up their e-commerce business.
Amazon’s Privacy Fine
The Luxembourg data protection commission, the CNPD, has proposed a fine of more than $425 million against Amazon.com for violations against the General Data Protection Regulation (GDPR), which allows these privacy regulators to fine company’s up to 4% of a company’s annual revenue. This fine in particular would represent roughly 2% of Amazon’s reported net income ($21.3 billion), due to the violation being administrative in nature.
The Bezos Bros
TO THE MOON!???? (we’ll stop using this one day)
ShipHero News
Relaaaax
Shipping CBD products is now legal across all 50 states, but beware! Companies that want their share of this growing $2.8 billion market must comply with the FDA’s shipping regulations. That’s why we grind up the industry’s best practice and FDA guidance and roll it into this latest how-to guide to grow your CBD business!
Take a ride on the information superhighway!
Did you know: KPIs allow you to organize your company’s data and set specific and actionable goals against them. From social media to shipping logistics, you can use this information to track marketing trends, warehouse inventory, and customer service interactions. Dive into our latest blog for 16 must-track KPIs in 2021!
Best Print-on-Demand Companies of 2021
Whether you hope to make a business out of print-on-demand, want to sell merchandise to spread brand awareness, or think it’d be cool to sell your self-designed “Pfizer Gang” shirts, you must pick the print-on-demand company that’s right for you. In this blog, we explain print-on-demand and identify the top five print-on-demand services as of 2021.
