Now that the dust is settling on a wild holiday season, I wanted to share some thoughts about this interesting article on holiday shipping trends. For years, logistics and fulfillment headlines have been dominated by faster shipping: 2-day, 1-day, and same day. This makes sense for retailers, but not for brands.
Retailers compete against each other and anyone else who carries their products, so faster shipping allows them to win sales from their ecommerce and brick-and-mortar competitors. The big retailers leverage a multitude of inventory locations to achieve fast, economical shipping: Walmart ships from over 4,000 stores and 42 distribution centers; Target ships from 2,000 stores, 59 distribution centers and uses their own in-house carrier; and Amazon operates over 1,400 various locations to achieve their delivery speeds.
But for most direct-to-consumer brands, splitting products across more than a couple of inventory locations doesn’t make sense from a cost perspective—what you make up in speed, you lose in the cost to splitting, balancing and refilling inventory. This is especially true for brands that are always launching new products and don’t have historical sales statistics on a SKU, since predicting sales volume geographically becomes even harder.
Consumers shop for a particular product, then price, then speed. Or, these days, maybe it’s product, speed, then price. But product is always the most important. If you’re a capital B-brand that sells a differentiated product, then your need to compete on speed is diminished. Consumers are willing to wait a day or two longer for shipping from DTC brands, or from brands that have a very tight list of retailers. To attract customers to buy directly from you, don’t compete on speed. Offer a wider selection, or exclusive products, or a special customer experience.
DTC is where you build your superfan audience. Your job, then, is to focus on an exceptional purchase and post-purchase experience to keep your customers coming back. That is what Outerspace excels at, from quick turnaround personalization like monogramming and granular order tracking to elevated unboxing and easy returns.
The Walmarts, Targets and Amazons of the world have to compete on price and speed. That’s all they have. That’s a different kind of commerce. Leave that to them. You have the most important pieces: product and brand.
