PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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That's important for a web retailer like Gilt that sells sofas that cost $2,000 or more and require more than the standard delivery offered by the big national carriers, UPS or FedEx. Among the delivery services Gilt employs is HomeDirect USA, a specialized carrier that covers most of the nation, Goldberger says. With a delivery charge that can approach $200, according to Gilt's listed prices, the sofa would likely get HomeDirect's gold treatment, which includes unpacking, setup and removal of packing materials. Less expensive outdoor furniture, by comparison, would likely get the shipping level that includes only the carrying of items into a customer's house or apartment. In all instances, HomeDirect contacts the customer and books a four-hour delivery window.
The level of delivery isn't the only consideration for such orders, though. Customers spending that much money want to be able to follow the progress of the order. That's why Gilt integrates its order management technology with that of HomeDirect's in such a way that a customer can track the order via Gilt's site—instead of having to go through the carrier's web site. Making that information available on Gilt.com is important, Goldberger says. "Our members are heavy Internet users, and they'd rather not call," he says.
While HomeDirect has a national reach, Goldberger says he would like to see more specialized carriers that can cover the entire country—a point made by other e-retailers, who say UPS and FedEx have yet to master deliveries of specialized items to residential locations (UPS and FedEx did not respond to requests for comment). As it stands, retailers often must evaluate a long list of potential carriers to find the most attractive ones.
In some cases, the decision is made easier thanks to the carrier's specialization. For example, The Messengers International, in Canada, had experience working with wine shipments, says Janke—and the service was able to offer competitive rates, too.
Cost will always remain among the main considerations for retailers needing specialized carriers, especially for smaller retailers who subsidize shipping costs and strive to keep up with larger operations such as Amazon. But deciding upon the carrier that can properly handle special deliveries involves more than a price quote, says Klaristenfeld, of Dazadi.
When Dazadi evaluates carriers it weighs whether they can handle heavy recreational goods such as pool tables and shuffleboard tables, which can't always be broken down, and must ship whole. When Dazadi finds a promising carrier, it will throw perhaps five to 10 shipments its way—giving the customers free delivery in exchange for their comments—to see how it performs.
Technology also comes into play. Many regional carriers were around long before the birth of e-commerce, and not all are adept at providing retailers with the data they need. Key is the ability to get tracking numbers to customers as efficiently as possible, Klaristenfeld says. Retrieving up-to-date shipping information might require creating a data link with the carrier, he adds. But he has seen progress. "In general, there's a better awareness [among carriers] of technology now than there was five years ago," Klaristenfeld says.
Among the fulfillment and logistics providers keeping pace with the technology demands of e-commerce is Moulton Logistics Management. Developed in-house over three years and launched about a year ago, its Smart Shipping software uses such variables as rules, rates, delivery times, costs and surcharges from multiple carriers to determine the best shipping choice for retailer clients, says Patrick Moulton, director of new business development.
When it comes to special deliveries, retailers shipping bulky and heavy products generally have a greater chance to wring discounts from carriers than retailers shipping lighter, lower-margin products, he adds. But a low-cost service does not always deliver the best service. "The company that has the lowest line-item cost will likely be a very basic warehouse that can pull an order and ship it, but does not have the reporting, technology and management ability to optimize the decisions made from manufacturing to delivery," he says.
Retailers have their work cut out for them when deciding how to handle these types of special deliveries. But the decision is crucial. "It doesn't matter if you are offering a wider variety of products than your competitors if you are also not providing that high level of service," Klaristenfeld says. "It's a way to differentiate yourself."
Making deliveries special
Consider these factors when shopping for a specialty carrier:
Cost: How willing to negotiate price is the carrier?
Capability: Will the carrier provide adequate service upon delivery? For instance, will it provide a two-man crew for bulky products or try to get by with a single person?
Technology: How quickly and easily will your customers be able to track their orders? And will they be able to do it through your site?
Personalization: Will your carrier help you give these deliveries some extra—and memorable—oomph that'll make consumers remember their shopping experience with you?