Dynamic Reservations vs Static Time Slot Bookings
Optimising the in-store experience is no longer the primary concern for retailers when considering customer satisfaction. The surge in online retailing means home delivery services have now been placed at the forefront of customer facing business decisions. The challenge is how to provide customers with choices on how and when they want to receive the product they have ordered. Giving the customer freedom to choose what meets their commitments during the purchase process creates a greater bond and lock-in to the purchase from the outset. Doing this in a way, which guides them tactfully to choose the options which the retailer knows they can commit to and execute successfully while maintaining margins is a win-win result. Setting and managing expectations from the outset is the key to meeting them and delivering the experience that promotes consumer loyalty.
Most retailers have deployed a traditional time slot booking online delivery service. This rigid, static method is rigorously constructed around capacity, historical averages of delivery time and post codes, and tends to align with fast moving consumer goods. Online grocers are a prime example of fast cycle retailers who rely on time slot booking to deliver perishables.
Static time slot bookings pose many challenges for retailers. Not only are these reservations particularly limiting, a missed delivery may result in multiple attempts to re-deliver, creating more transport costs and a decrease in customer satisfaction. Additionally, there is a risk of underutilising capacity through transporting low cost orders to many places in the same area. In most cases retailers have over capacity in the delivery transportation to be sure to meet customer commitments. How often do you see a supermarket delivery van parked up killing time or two vans’ paths cross to make deliveries in the same area? In today’s customer-facing supply chain, the traditional concept of time slot bookings based on a historical matrix of delivery windows proves both inefficient for businesses and is, quite simply, outdated.
In contrast, dynamic reservations provides both end user and retailer with a model for effective delivery. It allows retailers to maximise profitability through continuous optimisation of the delivery process. From the retailer’s perspective, delivery route planning is considered at the point of sale, which in turn ensures reliable delivery slots to maximise efficiencies. What this means is that an optimisation call is made to the routing system at the point of order. That call considers business defined parameters, delivery assets and existing routes to dynamically present delivery options that make sense for the business. Delivery fees can be based upon these routes, and customers may be offered a number of costed delivery choices at the point of sale to meet preferred delivery time. By calculating the logistics cost for each reservation, retailers can maximise route efficiencies, save valuable time, improve customer satisfaction and increase profit accordingly. While the actual route and vehicle the delivery will be made on may change as new orders enter the system and get optimised to drive density, that customer’s time window selection is committed.
A positive delivery experience will drive buyer behaviour and the main benefit of dynamic reservations is an improved customer experience. This includes creating a mobile tracking system which notifies the customer when their delivery is at different stages of transit. Ensuring that customers have access to real time information online will provide a point of reference, which may limit the volume of customer query calls that the retailer may receive, saving further time.
To guarantee delivery best practice, dynamic reservations enhances the experience of the end user through the most profitable method to the retailer. Retailers responding to the influx in online purchasing must do so competitively, establishing a process which benefits both parties to ensure a smooth transaction, a process which dynamic reservations can complete. Ultimately, it is crucial to put the customer’s needs at the centre of delivery optimisation to ensure that every minute of the buying and home delivery process is a positive and memorable experience.
Descartes is the global leader in logistics technology. Descartes meets the need of international trade and transportation organisations that want to differentiate their businesses through effective logistics strategies and processes, or need to improve existing logistics processes to compete in a variety of markets.
Descartes’ Logistics Technology Platform uniquely combines the power of the Global Logistics Network, the world’s most extensive multi-modal network, with the industry’s broadest array of modular and interoperable web and wireless logistics applications. Descartes’ comprehensive suite of solutions include: routing, mobile & telematics, transportation management, customs and regulatory compliance, global logistics network services, broker & forwarder enterprise systems.
Descartes provide solutions to help the world’s largest and most connected logistics community to quickly reduce costs, improve service and comply with customs and transportation regulations. Descartes customers include an estimated 1,600 ground carriers and more than 90 airlines, 30 ocean carriers, 900 freight forwarders and third-party providers of logistics services, and hundreds of manufacturers, retailers, distributors, private fleet owners and regulatory agencies.
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EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”