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From Pain Points to Sweet Spots

From Pain Points to Sweet Spots. Delivery Visual Search. David Foote, Owner, Vesalius Health. Amy Vener , Head of Retail Strategy, Pinterest. LIVE POLL. What is your biggest pain point that you are looking for technology to solve?. Visual Search Delivery Alternative Payments Voice

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From Pain Points to Sweet Spots

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  1. From Pain Points to Sweet Spots Delivery Visual Search David Foote, Owner, Vesalius Health Amy Vener, Head of Retail Strategy, Pinterest

  2. LIVE POLL What is your biggest pain point that you are looking for technology to solve? • Visual Search • Delivery • Alternative Payments • Voice • Chatbots/Customer Service Text “FFC817” to 22333 to join, then A B C D E to vote Session 7 – From Pain Points to Sweet Spots

  3. Distributor, dealer, retailer of sports, occupational, and physical therapy goods • First sales in 2012 • Previously employed 4 person direct sales team. Purchasing consolidation and ecommerce lead to elimination of their positions • 2300 Active SKU’s • 10,000 listings on seven ecommerce programs • Focus on customer service metrics Based in Indianapolis Session 7 – From Pain Points to Sweet Spots

  4. Focus on Metrics: Reduction in waste: • Labor Costs • Customer Service Expense Increase in: • Margins • Metrics 4

  5. Delivery Pain/Symptoms: • Late arrivals • Non-arrival • Damaged arrivals • Fake non-arrival • Expensive arrival • Returns with NSA • Negative feedback 5

  6. Amazon is already making up most of the US ecommerce sales… Ecommerce Shipping Problem … however they rely heavily on 3rd party sellers… … which experience major pain related to shipping cost & time Amazon is already making up most of the US ecommerce sales… Amazon is already making up most of the US ecommerce sales… Amazon is already making up most of the US ecommerce sales… • Fast shipping is the expectation • Fast shipping is expensive • Sellers often limit fast shipping to very small items or to local addresses, which limits buy box opportunities More than 50% sold by 3rd party sellers Sellers need a solution that can help get their products seen and reduce shipping costs 6

  7. Negative Amazon Feedback To be inserted Thanks Amazon & USPS! 7

  8. Impacts of Delivery Pain: • Negative feedback • Added re-ship expense • Increased staff time from added buyer email • Higher COGS • Decreased margins 8

  9. The 5 WHYs: • A technique originating with W. Edwards Deming in the late ‘40s in post-war Japan • Refined at Toyota Motor, leading to the Toyota Production System- focusing on waste • Repeating WHY five times to a problem peels away the layers of the problem, leading to it’s cause • It works in ecommerce! 9

  10. Solutions to Late Arrivals: • Set selling platform arrival times to meet your order processing, packing, and delivery capabilities • Develop specific tactics to ship orders within one day of order reception • Staffing • Inventory/no drop-ship • Develop relationships with UPS/Fedex/UPS etc • Doing so allowed Vesalius to push back pick-up times to 5PM, allowing for more same-day shipments 10

  11. Solutions to Non-arrivals (INR) • Are they “false complaints?” • If so, file complaint against buyer with Amazon • Develop template response for emails response: • Check with neighbors, roommates, etc. • Describe package (we ship primarily small stuff which often gets buried on desk) • Ask buyer to contact local USPS (we provide local phone number of USPS branch to buyer) • Use signature delivery for expensive items • Ship via UPS/FedEx Ground for expensive items 11

  12. Solutions to Non-arrivals (INR) • Buy insurance for high-value goods • Teach staff to note profile orders: • Hotels in convention cities- call front desk • We have specific products that buyers purchase in USA to avoid import duties • Staff has been trained to review expensive orders to areas/countries experiencing high INR rates 12

  13. Solutions to Damaged Arrivals: • Invest in high-quality poly bags • We found higher cost = less damage in USPS sorting machines • About 1.5 cents higher per bag • Get photos of damaged packaging from customer for USPS Priority Mail, and USPS to file damage claims • Choose what you ship carefully • Chocolate in the summer? • Liquids freeze in the mailbox- and explode 13

  14. Solutions to False INR Claims: • Have strongly worded email template including the phrase “postal inspector” • Ship expensive items with USPS signature/ and or via UPS • File complaint with Amazon against buyer if suspicious 14

  15. Solutions to Negative Delivery Feedback: • Worth repeating- Using the 5-whys will help reduce negative feedback • Improve customer communication skills • Provide clear solutions • Respond quickly and accurately • Do what you promise • Take responsibility • Petition Amazon to remove the feedback Do this to ALL feedback! 15

  16. Solutions to Expensive Arrivals: (Shipping Costs) • Price with knowledge of your fully allocated Costs of Goods Sold • Include shipping, packaging & labor • New marketplace solutions 16

  17. Co-opetition is… the act of cooperation between competing companies with partial congruence of interests to gain advantage by cooperation, generating more value by working together compared to the value created without interaction and thus struggling to achieve competitive advantage 17

  18. Co-opetitionIn Action SCOPE: • UPS picks up a package from the warehouse or distribution center and moves it through the UPS parcel network • UPS delivers package to USPS for the “last mile” delivery to a residential address • UPS and USPS share the revenue 18

  19. Results: • Increased market share and revenue • Lower cost from optimized distribution efficiency • Lower delivery charges for customers • Improved customer service • Sustainability and lower CO2 emissions • But does it meet Delivery Standards (Probably not) 19

  20. POWER OF MANY The Next Evolution in Ecommerce Fulfillment Value Creation in the Networked Economy through Strategic Co-opetition 20

  21. Value Proposition: • Sellers work together to ship orders for one another • The seller closer to any given customer ships to that customer • No compromise to carrier preference or negotiated rates 21

  22. NEW WAYPeer-to-Peer Shipping OLD WAYTraditional Shipping $28.50 $47.46 Avg. cost: $15.82 x 3 packages Avg. cost: $9.50 x 3 packages HOW IT WORKS 40% CHEAPER 2 DAYS FASTER 22

  23. PROFITABLE SHIPPING 40% LESS SHIPPING COSTS TRUSTED SHIPPING NETWORK 2 DAYS FASTER Offer Fast 2-Day Shipping Nationwide at a price lower than Ground SMARTER ROUTING 23

  24. Results: • Gets it there quicker (2 days faster) • Gets it there cheaper (up to 40% less shipping costs) • Less carbon footprint (better for the planet) 24

  25. Future of Delivery: Robots Autonomous Pizza Delivery Vehicle Developed by Dominos (DRU) • Prototype keeps food and drinks at the appropriate temperature • Sensors help it navigate the best travel route for delivery 25

  26. Future of Delivery: Drones Amazon Prime Air (Drone Delivery) • Goal: to safely deliver up to 5-pound packages in less than 30 minutes • Currently working with countries around the globe on aviation safety 26

  27. Reduction in delivery pain points = Summary: • Reduction of waste • Flatten payroll expense • Lower COGS • Improved metrics • Increased sales/Buy Box • Higher margins • Less STRESS! 27

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