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    Tuesday
    Jan172017

    Neiman Marcus Has Quarter Loses Due to Distribution Challenges

    When a luxury retail department store leader like Neiman Marcus makes tech adjustments in its' distribution system, it is clear that traditional warehousing is not what will succeed any longer. Distribution has moved to a more sophisticated approach to managing inventory and shipping, especially when faced with robust Amazon. The e-retail giant has mastered distribution and used Same-Day Delivery to revolutionize how we ship.

    Yet, Neiman Marcus recent announcement shows that the retailer has some improvements to be made. Internet Retailer discussed in an article how thre retailers has had first fiscal quarter losses for 2017 due to the distribution problems that it is facing. Neiman Marcus had challenges implementing a new cross-channel merchandising system, which costs Neiman Marcus up to $35 million during its fiscal first quarter. This impacts sales revenue from the holiday season. Neiman Marcus reported online sales accounted for 29.2% of overall sales in the first quarter, which ended October 29th, at $315.1 million. This number is slightly down from $315.7 million from the previous year.

    Neiman Marcus stated, “These issues primarily related to the processing of inventory receipts at our distribution centers, the transfers of inventories to our stores and the presentation of inventories on our websites. These issues prevented us from fulfilling certain customer demand in both our stores and websites that we estimate resulted in approximately $30 to $35 million of unrealized revenue.” Efficient distribution matters not only for physical stores, but also with online business. Without having the product in stores, it can effect sales, and without correct inventory to fulfill online orders, it effects on-time shipping. This then creates the inability to keep up with demand on both fronts.

    In a filing with the U.S. Securities and Exchange Commission, Neiman Marcus revealed problems that related to the implementation of NMG One, its new cross-channel merchandising and distribution system. It resulted in a negative impact on online and offline sales. More specific numbers mentioned in the report were Neiman Marcus' earnings, which included:

    • A year-over-year total comparable sales decline of 8.0%, compared to a 5.6% decline last year.
    • Net revenue of $1.079 billion, down 7.4% from $1.165 billion.
    • A net loss of $23.5 million, compared to a net loss of $10.5 million.

    One way to improve omnichannels to facilitate online and offline sales is same-day delivery, which is what companies like Best Buy, PetSmart, Toys-R-Us, and others are doing. One prime example is Macy's, which uses its' physical store locations as close proximity warehousing and get product to shoppers fast. Macy's offers same-day delivery in San Francisco, Los Angeles, Seattle, Houston, Chicago, New Jersey, Washington DC, and more. With over 880 store locations, Macy's can fulfill online orders on a national scale, alleviating some of the pressure on its' distribution centers.

    Neiman Marcus can do likewise, partnering with a Same-Day Courier like A-1 Express to develop a same-day solution to move inventory between stores, as well as fulfill online orders to customers. The Orlando Courier also has a nationwide footprint and can handle the volume Neiman Marcus needs. Like Macy's and Amazon, Neiman Marcus can generate sales growth with same-day delivery, turning more inventory and order fulfillment to their stores.

    Reference: 12.15.16, www.internetretailer, Matt Lindern, Distribution problems cost Neiman Marcus during its first quarter

    Tuesday
    Jan102017

    Amazon's Prime Air Same-Day Delivery Via Drone Is Done

    There isn't a retailer in the country that is in front of Amazon, especially with its' latest announcement of its first successful drone flight for Same-Day Delivery. It isn't something that CEO Jeff Bezos just had for an idea in 2013. It is now a reality.

    Fox News has reported that Amazon has officially launched its' Amazon Prime Air via drone in Cambridge, England. This first drone delivery was actually performed on December 7th last week. The drone completed the delivery in a matter of 13 minutes, which even Amazon mentioned in the article that none of them will take no more than 30 minutes. For this level of fast delivery, drone use can revolutionize the way same-day services are used to expand online retail globally.

    The article stated that the drone delivered an Amazon Fire TV and some popcorn, which weighed less than 5 pounds. Guided by GPS, the drone is unmanned and able to be loaded with the purchased items, then flies direct to its destination. Amazon's drone flew no higher than 400 feet, as well as drones have to occupy separate air spaces to avoid planes. When Amazon first began to test drone use, there were several FAA regulations Amazon had to contend with, but Amazon Prime Air is proving to be able to literally take off.

    Amazon does only have a few customers in the UK that is privy to using drones. However, the e-retail giant has hopes to expand it to a larger demographic. The article also mentioned how Amazon is careful not to use the drones in rain, snow, ice, or other types of inclement weather. The weather can definitely impede drones flight patterns, and most importantly, harm the drones themselves.

    "One day, seeing Prime Air vehicles will be as normal as seeing mail trucks on the road," Amazon says. This means that we could potentially find drones flying in various parts of the country at one time making deliveries. Shoppers will be able to have their online items delivered right to their front door within 30 minutes. Drone delivery will be satisfying for the customers, however, it may have an adverse affect mall traffic and other physical store retailers without a heavy focus on e-commerce.

    Until Prime Air expands, even into using them in the US, Amazon will continue to utilize its' current same-day delivery option--Amazon Prime. The fast delivery service is working, not to mention Prime members have it as a free service in a total of 27 major US cities. These cities include San Francisco Bay Area, San Diego, Seattle-Tacoma, Dallas-Fort Worth, Boston, New York, Chicago, Indianapolis, Baltimore, Washington DC, Nashville, Raleigh, Richmond, Tucson, Orlando, Tampa, and Atlanta. Amazon has free same-day delivery in Toronto and Vancouver as well. The inevitable is that Amazon will be using drones in every major city nationwide.

    There is no telling where drone delivery is going to catapult e-commerce to. What retailers can currently do to compete is to partner with a Same-Day Courier like A-1 Express to shift their e-commerce into more of a core competency to generate sales. The Boston Courier has the courier expertise to create the level of same-day logistics needed to attractive customers and compete online, especially as Amazon continues to spearhead e-commerce innovation.

    Reference: 12.14.16, Fox News, Lulu Chang, From high-flying dream to reality: Amazon fulfills its first order using a drone

    Thursday
    Jan052017

    Sales Down For China Malls, Could Turn to Same-Day Delivery

    When you think of e-commerce, the US has always been the primary country that is spearheading online growth. Not anymore. China's e-commerce is thriving, even to the point that mall stores are seeing the effects of it.

    Mall and restaurant traffic is seeing a decline in China reported the Internet Retailer via Bloomberg News. Traffic decreased in November, which is not a good sign as the holiday shopping season begins that month. The article stated it is due to a surge of online shopping activity, according to Baidu, operator of China’s dominant search engine, and JD.com. China's wealthy shoppers are opting to go online to buy more pricier items. Less traffic translates into less sales. This is the time that retailers look forward to, even to where this season helps to compensate for any revenue losses during the course of the year.

    Online retail is expected to grow to $500 billion by 2018 and China's leading retailer Alibaba is the front runner there, which also offer Same-Day Delivery in several big cities. The online retailer is the Amazon of China, even generated $18 billion in sales in one day during November. The numbers attest to the lower traffic in malls, as more and more shoppers are comfortable with buying online there. It is convenient, easy and saves our most valued commodity--time.

    “China’s two-speed scenario is having a major impact on the country’s retail industry,” said Jason Yu, general manager for China at consumer research firm Kantar Worldpanel. He went on to say, “This massive explosion of online sales growth is being fueled by increasing diversification in the categories purchased online, as well as huge gains in imported products and consumers taking advantage of promotions.” One of the major attractions to online retail is that consumers have access right in the palm of their hands to real-time holiday discounts. With their mobile device, a shopper can look for online deals and instantly take advantage of them.

    The question is then how will malls be able to match the surge of online growth, which shows no signs of slowing down? One strategy US department store leaders Macy's took in the US was to create the omnichannels necessary to bridge their online store with its' physical ones via same-day delivery. Macy's partnered with start-up delivery company Deliv and launched same-day delivery in multiple major US cities last year. Deliv uses a crowd-sourcing approach and delivers in-store products from Macy mall locations to online shoppers.

    Macy's started its' same-day delivery program in San Francisco, Los Angeles, San Jose, Seattle, Houston, Chicago, New Jersey, and Washington DC. Its' sister company Bloomingdale's rolled out the service in San Francisco, Los Angeles, San Jose, and Chicago as well. With at least 885 mall locations, Macy's has been able to use its' store volume to its' advantage, utilizing them essentially as warehouses to fulfill online orders from. Nordstrom's has engaged in some same-day delivery also.

    Like Macy's, it makes sense for mall retailers to turn to same-day delivery to improve sales. Malls can shift with the trend of getting product to the customer, versus the customer coming to the mall when they don't have to. A retailer can partner with a Same-Day Courier like A-1 Express to pick up from mall locations and then deliver to the shopper. The Washington DC Courier has a national footprint and can assist malls in regaining their shoppers back.

    Reference: 12.12.16, www.internetretailer.com, Bloomberg News, China’s e-commerce boom shrinks mall shopping traffic

    Tuesday
    Dec272016

    Sales Down For China Malls, Could Turn to Same-Day Delivery

    When you think of e-commerce, the US has always been the primary country that is spearheading online growth. Not anymore. China's e-commerce is thriving, even to the point that mall stores are seeing the effects of it.

    Mall and restaurant traffic is seeing a decline in China reported the Internet Retailer via Bloomberg News. Traffic decreased in November, which is not a good sign as the holiday shopping season begins that month. The article stated it is due to a surge of online shopping activity, according to Baidu, operator of China’s dominant search engine, and JD.com. China's wealthy shoppers are opting to go online to buy more pricier items. Less traffic translates into less sales. This is the time that retailers look forward to, even to where this season helps to compensate for any revenue losses during the course of the year.

    Online retail is expected to grow to $500 billion by 2018 and China's leading retailer Alibaba is the front runner there, which also offer Same-Day Delivery in several big cities. The online retailer is the Amazon of China, even generated $18 billion in sales in one day during November. The numbers attest to the lower traffic in malls, as more and more shoppers are comfortable with buying online there. It is convenient, easy and saves our most valued commodity--time.

    “China’s two-speed scenario is having a major impact on the country’s retail industry,” said Jason Yu, general manager for China at consumer research firm Kantar Worldpanel. He went on to say, “This massive explosion of online sales growth is being fueled by increasing diversification in the categories purchased online, as well as huge gains in imported products and consumers taking advantage of promotions.” One of the major attractions to online retail is that consumers have access right in the palm of their hands to real-time holiday discounts. With their mobile device, a shopper can look for online deals and instantly take advantage of them.

    The question is then how will malls be able to match the surge of online growth, which shows no signs of slowing down? One strategy US department store leaders Macy's took in the US was to create the omnichannels necessary to bridge their online store with its' physical ones via same-day delivery. Macy's partnered with start-up delivery company Deliv and launched same-day delivery in multiple major US cities last year. Deliv uses a crowd-sourcing approach and delivers in-store products from Macy mall locations to online shoppers.

    Macy's started its same-day delivery program in San Francisco, Los Angeles, San Jose, Seattle, Houston, Chicago, New Jersey, and Washington DC. Its sister company Bloomingdale's rolled out the service in San Francisco, Los Angeles, San Jose, and Chicago as well. With at least 885 mall locations, Macy's has been able to use its' store volume to its' advantage, utilizing them essentially as warehouses to fulfill online orders from. Nordstrom's has engaged in some same-day delivery also.

    Like Macy's, it makes sense for mall retailers to turn to same-day delivery to improve sales. Malls can shift with the trend of getting product to the customer, versus the customer coming to the mall when they don't have to. A retailer can partner with a Same-Day Courier like A-1 Express to pick up from mall locations and then deliver to the shopper. The Washington DC Courier has a national footprint and can assist malls in regaining their shoppers back.

    Reference: 12.12.16, www.internetretailer.com, Bloomberg News, China’s e-commerce boom shrinks mall shopping traffic

    Friday
    Dec232016

    Volkswagen Talks Pros and Cons of Same-Day Parts Delivery

    It's not just retailers that have dived into Same-Day Delivery. Big name automakers have also begun to implement same-day delivery of parts to strengthen service efficiencies. So far for Toyota, for example, getting parts to dealerships the same day is working. The bottom line is that the service has moved beyond just being a trend for any company, even car manufacturers. However, one of them is not ready yet to say whether same-day delivery is the positive turn that the industry needs to improve dealership part inventory and operations.

    Auto News recently discussed in an article about Volkswagen not in favor of pursuing same-day delivery for its' business model yet. VW has a greater focus on developing a supply chain process that helps dealers actually change what they are stocking. The part inventory itself will result in dealerships having the parts for operation efficiency. Service repair is one of the areas of a dealerships that customers complain about the most. It is imperative that the lead time to receive parts it minimized to improve repair times. This in turn, creates less miscellaneous costs to take care of the customer to make up for a lack of on-time repairs.

    Anu Goel, Vice President of Parts and Logistics at Volkswagen Group of America, commented in the article about same-day delivery, questioning its' ability to be a viable solution. He stated in the article, "If you've got dealers stocking the right parts in the first place, why do you need same-day service?" The key for Volkswagen that would make same-day part delivery work is its' distribution system, which currently would have to expand to be successful at this type of program. The pros is that it works; however, the con specifically for Volkswagen is the automaker has seven distribution centers and would have to add more to establish a close-proximity system. This ultimately means a huge level of costs that VW isn't ready to provide.

    Volkswagen currently does offer next-day delivery, which is productive and the company appears to be satisfied with it. Goel said, "We are good for now. With a 1 p.m. cutoff [for parts orders], we can make 7 a.m. to 8 a.m. delivery the next day. Seven buildings around the country allow us to meet that commitment." On the other hand, other big name car manufacturers are seeing same-day delivery aid in part inventory and service success. Toyota, which implemented same-day parts availability to their dealerships this past August, has seen a difference in real time repairs and customer service. BMW and Fait Chrysler US have also launched same-day part deliveries.

    There are pros and cons to same-day parts delivery, yet it is all contingent upon the automaker's current distribution model, and how much would it take to shift from traditional warehousing to fast deliveries. A Same-Day Courier like A-1 Express is a viable option for care manufacturers to partner with to have parts delivered. The Los Angeles Courier has a national footprint, enabling it to pick up and delivery parts to dealership locations across the US. It does take delivery expertise and a large driver fleet to get parts from one dealership to another. A-1 Express could be just what other automakers need to compete and increase their service repair efficiencies.

    Reference: 11.21.16, www.autonews.com, Jim Henry, VW's Goel: Same-day delivery? Not yet