Home Furnishings Business recently wrote a fantastic article on home delivery. We highly recommend reading it in it's entirety but if you only have a few minutes you should at least read the section below-
To Outsource or Not?
In today’s fast-paced world, consumers are eager for product as soon as they make the transaction. They’ve likely put the purchase off for sometime, and most are ready to have it in their home immediately.
The hurry-up model set by Amazon and other retailers have set the standard for same-day delivery relatively high. In some markets, some products can be delivered within a few hours. Now, furniture is a bit different due to size and other features, but the expectation is there for immediate gratification.
Many retailers in the industry offer same-day delivery on purchases made before a certain time and sometimes there are limitations on product offered for the service. Of course, special orders are off the table.
Whatever the delivery time frame offered, managing the logistics of delivery can become overwhelming. Hence, some retailers opt to outsource the service to a third-party supplier like Cory 1st Choice Home Delivery, Zenith Global or Diakon Logistics. A number of vendors operate within the home furnishings industry, but the key for retailers is finding the right partner for your operation.
Rob Davis, vice president of client solutions for Diakon Logistics, said its imperative for retailers to partner with a delivery company who shares a similar culture and approach to customer service. Otherwise, the partnership isn’t likely to last.
“We like to work with retailers that have a similar way of working,” Davis said. “The partnership has to be a good match for them and for us. A lot of that comes down to understanding their processes before we ever take over. We have to have a good grasp of how they do things so that we can build on their successes and improve on their shortfalls.”
By understanding a retailer’s culture and customer service approach, a third-party company’s team can meld more seamlessly into the delivery operation and work hand in hand to service the consumer.
Davis said many furniture retailers started in the business with a passion for the industry and have included delivery as part of that service to their customers. Most of today’s larger furniture retailers outsource the delivery function, he said.
The economies of scale can help determine whether outsourcing is practical. Davis said a good rule of thumb is that if a retailer is running less than three trucks in its delivery fleet, it makes the most sense for them to continue the management of the process.
“Once they get into three to five trucks, there becomes a break even point when it makes sense for them to outsource the process,” Davis said. “A lot of retailers love selling furniture and building those customer relationships. Managing the back shop becomes a necessary evil. That’s when we see retailers consider outsourcing. Once they’re above five trucks, a dealer will see a big difference from outsourcing.”
Davis said Diakon Logistics works really hard to retain the hometown, local feel when they begin working with a retail partner, noting that trucks can be branded with the store logo and drivers and delivery personnel can wear branded uniforms.
“It really goes back to understanding the store’s culture,” he said, adding that often Diakon will take over a retailer’s existing delivery team. “We become a seamless extension of the retail brand.”
Outsourcing takes the burden of staying abreast of the rules and regulations (See companion story) governing drivers away from the retailer and places it on the logistics company. Hours on the road and other rules tend to change frequently, as do the requirements for background checks in hiring.
The finding and hiring of drivers can be a long, drawn-out process. Davis said finding quality, delivery teams can be challenging.
“We’re looking for an interesting group of people,” he said. “We want them to have customer service skills; we want them to look good; we want them to be kind; and we want them to be creative problem solvers. They have to be willing to move furniture, have a clean background check, be really strong, pass a drug screen and have a clean driving record. That can be tricky.”
Davis said consumers are welcoming a delivery team into their homes, and that’s a big deal.
“We’re usually met by a female who either bought the item or picked it out,” he said. “We don’t know anything else about her. Don’t know if there’s been a life changes, like a divorce or whatever. This is the only time we’re walking into her personal space, and spending a good deal of time in her home. We have to get it right and she has to feel at ease. It’s completely different than someone coming into a showroom.”