There are many strategies to expedite or improve service to the customer while also trying to minimize logistics costs. A recent DC Velocity article, "E-commerce Driving Regionalization of Distribution Networks" by Mark B. Solomon, cites studies that have found: (1) 3/4 consumers will abandon online shopping carts if free shipping is not offered (2) inability to return merchandise impedes online shopping for most consumers.
To overcome these barriers and still cost effectively service the customer, Mark suggests that many retailers will regionalize their distribution networks. While this can have great advantages in reducing time in transit and shipping costs of orders, it may also drive up other logistics costs related to inventory allocation, storage, and transportation.
What have you found to be the most viable option for providing free shipping while reducing time in transit? Please post your thoughts here or email me at kmelendez@mkm-logistics.com. I look forward to hearing from you!
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