Retail businesses encounter several challenges, regardless of size and niche. Logistics and freight forwarding are among the most underrated ones. While logistics ensures the seamless movement of goods across the supply chain, their costs can eat deeply into a retailer’s profits.
In 2020, the year of the pandemic, global logistics costs reached $9.1 trillion, and they continue to rise. For retailers, this translates to a staggering 13-15% of a product’s value consumed by logistics alone. Such challenges aren’t exclusive to small businesses; even retail giants face the same crunch. The recent pandemic further spotlighted the fragility of our supply chains, urging retailers everywhere to reevaluate the importance of efficient logistics.
Environmental concerns in logistics transportation have also emerged as a factor retail businesses must consider, as younger consumers in particular prefer purchasing from companies with sustainable practices.
Therefore, the retail sector requires innovative, sustainable solutions to maintain efficiency, cost-effectiveness, and eco-friendliness. Digital freight forwarding is one area pushing the industry forward in this regard. Let us explain how it works and how it can drive success for retailers.
Understanding Digital Freight Forwarding
According to McKinsey, tech transformation is imperative in retail operating models. Unless you adopt technology, you cannot stay relevant and competitive in the current landscape. Like all other business operations, freight forwarding requires innovation.
Digital freight forwarding entails the use of digital platforms to automate and streamline the freight forwarding process. Here, a single platform integrates various logistics processes to simplify supply chains for retailers. Think of such processes as booking, tracking, payment options, and customs clearance.
Apart from making things easier for businesses, digital freight forwarding also minimizes complex paperwork and saves time by eliminating most of the manual tasks from the process. These, and many more, are some of the benefits you can enjoy with digital freight forwarding over traditional systems.
Now, it’s clear why the system is gaining such massive growth globally. It is estimated to reach $22.92 billion in 2030, which is almost ten times the value of $2.92 billion in 2020.
How Digital Freight Forwarding Can Drive Success for Your Retail Business
As a small or mid-sized retail business owner, you may have valid concerns regarding investing in high-end technologies. But when it comes to digital freight forwarding, SMBs in particular can gain immense value, opening up growth prospects for your business.
Here are some ways digital freight forwarding can drive success for retail organizations:
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Streamlining Supply Chain Operations
Automating supply chain processes with a digital platform does more than free up your team from repetitive and complex tasks. It enhances overall efficiency and reduces manual errors. Additionally, real-time visibility into shipments enables better planning and resource allocation for retailers.
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Improving Customer Experience
In the competitive retail space, you cannot thrive without excellence in customer experience. Digital freight forwarding helps ensure timely and accurate deliveries, enhancing customer satisfaction. It also facilitates precise delivery estimates, real-time tracking, and responsive customer support. Together, these factors foster a positive customer experience and brand loyalty.
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Facilitating Cost Savings
Cost savings are another key benefit of going digital with your logistics process. With this technology, you can experience substantial cost savings by eliminating intermediaries, optimizing routes, and reducing paperwork. Also, transparent pricing and instant quotes enable informed decisions and reduce unnecessary expenses.
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Supporting Sustainability
With this, your retail business can promote sustainable practices. For example, by optimizing transportation routes, you can reduce fuel consumption and emissions to lower your carbon footprint. Better inventory management translates into minimal waste and helps you explore eco-friendly packaging options.
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Enabling Scalability and Agility
Scalability and agility are essential in the fast-paced retail industry, and digital freight forwarding helps with both. Digital platforms can help scale operations up or down according to demand.
Steps to Adopt Digital Freight Forwarding
Gartner states that 82% of supply-chain-intensive businesses plan to increase digital investments across their enterprise. The process for adopting digital freight forwarding may vary according to the size and structure of an organization. But here is a checklist of the common steps to digitize your freight and logistics operations:
#1: Assess Current Logistics Processes
Start by digging deep into your existing logistics workflows to find inefficiencies and pain points that keep you from optimizing operations. Also, list your specific requirements and goals to align digital solutions with them.
#2: Research Digital Freight Forwarding Solutions
The good thing is that several options in digital freight forwarding platforms and technologies are available in the market. But too much choice can be overwhelming. Research your options by considering factors such as ease of use, features, pricing, scalability, and customer support.
#3: Choose the Right Technology Partner
After researching your options, you should shortlist, compare, and short. Select a digital freight forwarding provider by checking their industry reputation, track record, and customer reviews. With a trusted partner, you can rest assured about a smooth transition.
#4: Integrate with Existing Systems
Integrating the digital platform with your existing systems is perhaps the most challenging part. You need to ensure that it aligns with your order processing, inventory management, and customer relationship management software solutions for seamless data flow and process automation.
#5: Staff Training and Adoption
Putting a software solution in place is only half the work. You cannot avail of its benefits unless your staff knows how to use the technology. Provide comprehensive training to get them started. Also, ensure that your team understands the benefits, functionalities, and best practices of the solution to prevent resistance and draw buy-in.
#6: Ensure Data Security and Compliance
Digital transformation comes with a fair share of challenges, and privacy risk is one of them. As you opt for digital freight forwarding, prioritize data security and compliance with the retail industry regulations.
Implement robust security measures, data encryption, and compliance protocols. Also, keep a close eye on emerging threats and regularly update security policies to address them.
Final Note
Adopting digital freight forwarding should be a top priority for retail business owners. Besides transforming your logistics operations, it can help you gain a competitive edge in the market by fostering high-quality customer experiences. It is a worthy investment, even for small retail businesses beginning their journey from scratch.