Digital Isolation
Digital Isolation - CPG Perishable & Hard-To-Ship Products Can Participate Profitably In E-Commerce
How do CPG manufacturers sell direct-to-consumer (D2C) profitably if they sell perishable, heavy and generally hard & expensive to courier products to consumers? Here we will detail 10 things to consider in order to be D2C profitable if you have expensive and perishable products to ship via courier. There is a solution, but it isn’t D2C in the traditional sense.
Again, perishable and heavy/low value products face unique challenges in D2C e-commerce due to high shipping costs and the need for rapid, reliable delivery. However, there are 10 strategies that can be used to participate profitably in this channel. However, the path to profitability involves omnichannel retailers, conversion data, search and social advertising and Ghost Tree Sales support.
1. Optimized Packaging
Lightweight Materials: Use lightweight but sturdy packaging materials to minimize shipping weight.
Temperature-Controlled Packaging: For perishables, invest in efficient, insulated packaging solutions to ensure products stay fresh longer, reducing the need for expedited shipping (not, you will need to increase your retail price here).
Size Optimization: Design packaging to fit the product snugly, reducing dimensional weight and unnecessary space.
2. Strategic Shipping Partnerships
Bulk Shipping Discounts: Negotiate bulk shipping rates with couriers.
Regional Warehousing: Establish warehouses or fulfillment centers closer to key markets to reduce last-mile delivery costs.
Third-Party Logistics (3PL): Partner with 3PL providers who can offer better rates and efficient logistics solutions.
3. Innovative Delivery Models
Local Delivery Services: Utilize local couriers or gig economy services for last-mile delivery, which can be more cost-effective for nearby customers.
Scheduled Deliveries: Offer scheduled delivery windows to consolidate shipments and optimize delivery routes.
4. Subscription Services
Regular Deliveries: Encourage customers to sign up for subscription services, ensuring regular, predictable shipments that can be optimized for cost and efficiency.
Incentives for Subscriptions: Provide discounts or perks for subscribing, which can offset the shipping costs.
5. Dynamic Pricing Strategies
Variable Shipping Costs: Adjust shipping charges based on the customer’s location, order size, and delivery speed.
Free Shipping Thresholds: Offer free shipping on orders above a certain value to encourage larger purchases, which can help absorb shipping costs.
6. Efficient Inventory Management
Demand Forecasting: Use advanced analytics to predict demand and optimize inventory levels, reducing waste and unnecessary shipping.
Inventory Distribution: Place inventory in locations that are geographically strategic to minimize shipping distances and costs.
7. Marketing and Customer Education
Transparent Costs: Educate customers about the reasons behind shipping costs, particularly for heavy and perishable items.
Value Proposition: Emphasize the quality, freshness, and exclusivity of the products to justify the shipping costs.
Loyalty Programs: Develop loyalty programs that offer shipping discounts or benefits to repeat customers.
8. Sustainability Initiatives
Eco-Friendly Packaging: Highlight the use of sustainable packaging to attract eco-conscious consumers who may be willing to pay a premium.
Carbon Offset Programs: Implement carbon offset programs and communicate these efforts to customers, adding perceived value to the purchase.
9. Technology and Automation
Route Optimization Software: Use technology to optimize delivery routes, reducing time and fuel costs.
Automated Warehouses: Invest in automated warehousing solutions to increase efficiency and reduce handling costs (obviously for large brands).
10. Leverage Omnichannel Retailers to Fulfill Consumer Orders
Digital Brick & Mortar Advantages: Use technology and omnichannel retailers with physical locations close to consumers' homes to make D2C profitable. Let your conventional retailers fulfil orders to consumers leveraging their brick & mortar locations. You continue to ship by pallet, LTL or truckload to your distributors or brick & mortar retailers while they leverage their physical locations to allow consumers to order online and pick up curbside or in-store. Some may even ship D2C for you. You can then focus on driving velocity by using CONVERSION DATA and search and social algorithms + efficient/effective advertising to drive more and more high purchase intent consumers to your omnichannel retailer's e-commerce platforms. Hence, you operate like a data smart D2C without losing money shipping perishable/heavy/hard-to-ship products like a D2C manufacturer. Ghost Tree Sales can help you fatten margins and e-commerce volume if you have hard to courier consumer goods. Don't be digitally isolated and unprofitable.
By implementing these strategies, businesses dealing with perishable and heavy products can mitigate the impact of high courier costs and maintain profitability in the D2C e-commerce space. The first step is to accept you can't ship your products profitably D2C. The next step is action…contact Ghost Tree Sales.
