What are retail big and bulky challenges & how to overcome them
By FarEye | October 13, 2022
As is true across many retail categories, online sales of furniture, appliances and other large equipment (collectively known as Big & Bulky) are growing strongly. Over 35% of furniture sales worldwide are expected to be made online by 2025. “Today’s consumers are just as comfortable purchasing a television or sofa online as they are groceries or books,” says Brie Carere, FedEx executive vice president and chief marketing and communications officer.
With larger items like furniture and appliances, however, delivery is a bit trickier and Big & Bulky retailers and shippers have added challenges to overcome. Special equipment like larger trucks, lift gates and dollies may be required. Two-man delivery crews may be needed and oftentimes may need to enter the home to deliver and install purchased items. Failing to overcome these challenges and ignoring the profitability of Big & Bulky delivery is handing business and competitive advantages to competitors.
Here are a few global Big & Bulky shippers and carriers that are tackling the challenges of Big & Bulky delivery head on:
Leading Big & Bulky Companies Taking Action
FedEx Freight Direct
Historically, FedEx and UPS have discouraged the shipping of Big & Bulky items due to the additional resources needed to complete such deliveries. But they may have been leaving dollars on the table in doing so. John Haber, CEO of logistics consultancy Spend Management Experts, says that Big & Bulky delivery is simply too big and fast-growing to ignore, adding that the pandemic had given a sharp boost to the segment’s growth, as consumers ordered home office and exercise equipment and spent more on home improvement. Because of this elevated demand for Big & Bulky shipments, FedEx Freight Direct has recently expanded its coverage to 90% of the United States. Consumers are able to select from flexible morning and evening 2-hour delivery windows and receive real-time notifications of delivery status.
FedEx is able to make this possible through its forward-thinking technology processes that enable real-time, package tracking capabilities and the exploration of blockchain and robotics in logistics. FedEx continues to transform consumer experiences - giving them added visibility and control - and gain a clear competitive advantage in the Big & Bulky delivery market.
However, shipping Big & Bulky items with FedEx Freight Direct does have some limitations as they do not handle installations, haul-aways, or individual packages over 300 pounds, and assembled or pre-built furniture requires prior written approval from FedEx Freight before tendering for FedEx Freight Direct services. Opportunities for improvement, perhaps?
Big & Bulky items such as furniture and appliances are oftentimes delivered not by the selling retailer but by third party logistics companies. The goods are bulky, heavy and prone to damage and require specialized equipment that many retailers do not have or want to invest in. Using these third party delivery companies comes at a cost, however, as retailers give up control of the delivery, the consumer experience and their brand image upon delivery.
Wayfair, a prominent global retailer of furniture and other large home goods, decided to keep deliveries in-house, as 90% of online orders are moved through Wayfair’s controlled transportation network and 70% are delivered through their own last-mile facilities. In doing so, Wayfair is able to retain control and flexibility of nearly all of its deliveries from order to in-home installation. Wayfair acknowledges that delivery drivers aren’t simply delivery drivers, but brand ambassadors that are trained to deliver a positive consumer delivery experience and create trust between Wayfair and its consumers.
Wayfair also recognizes the need for speed when it comes to Big & Bulky delivery and offers 2-day delivery on most of its items. Retailers that can offer faster delivery times are more likely to lock in the sale. How do they do this? Through innovative delivery methods enabled by technology, including delivery to parcel lockers and to consumers’ neighbors if they are not home. Machine learning applications allow Wayfair to predict when parcels will arrive and intelligent routing software allows for integrated, ad hoc returns to be picked up on the fly. These tech-enabled capabilities allow Wayfair to think ahead of its supply chain and be proactive when the delivery environment changes, leading ultimately to faster, cheaper and more flexible deliveries.
Offering 2-day delivery isn’t just about the last mile. The products need to be available for fast delivery to work. This requires optimized orchestration across the supply chain, from Wayfair’s 11,000 suppliers right to the consumer’s doorstep. The technology platforms that make this possible aren’t costs - they are investments. Getting the delivery experience right will keep consumers coming back for more.
IKEA, a premiere global furniture retailer founded in Sweden and headquartered in the Netherlands, has been the world’s largest furniture retailer since 2008 and is no stranger to Big & Bulky delivery. In fact, the company has been making home deliveries since it was founded as a mail-order sales business in 1943. That is a lot of experience.
Back in those days, however, the demand for 2-day delivery and free shipping were not as strong and supply chains were less complex. In today’s day and age, the need for speed, reduced costs and flexibility are loud and clear, and supply chains have grown larger and more complex. IKEA now operates globally with robust omnichannel delivery offerings. Consumers are able to shop in-store, pick up from the store, have items delivered to their homes and even pick up orders from … the gas station, just to name a few.
IKEA has recently partnered with GS Caltex, a South Korean oil refinery, to provide a hybrid service in which consumers can choose to pick up delivered IKEA products at a gas station in southern Seoul. This strategic move comes amid consumers increasingly purchasing IKEA products online, causing surges in demand for home delivery. This innovative solution allows IKEA to easily deliver products to a central location within an urban area, while allowing consumers to pick up their orders from a location that they may frequently drive to regardless. Consumers gain greater flexibility and control as they can select desired dates and times for pickup. IKEA and GS Caltex plan to roll out this offering in more cities this year. “Gas stations are great in terms of load space but also for logistics vehicles to enter. They are everywhere around the country, making them a good fit for a logistics hub,” one official at GS Caltex said.
This is just one example of an innovative solution to IKEA’s goal of delivering Big & Bulky products anytime, anywhere and at a lower cost - even in dense and difficult to navigate urban areas. The possibilities of omnichannel delivery are truly endless.
Technology Solves the Problem
Recent advancements in supply chain technology can help Big & Bulky retailers to successfully meet increasing consumer delivery demands and overcome supply chain challenges. But are they taking advantage of this? Perhaps not. 46% of furniture industry executives say that their delivery technology either needs improvement or needs immediate and significant improvement. Fast, free, flexible and sustainable shipping is possible for Big & Bulky items and is enabled by technology-driven platforms. Route optimization can lead to delivery efficiencies. Digital scheduling and capacity planning tools can allow shippers and carriers to achieve greater fleet utilization. Demand and capacity forecasting allows retailers to ensure they have the people and resources at the right place at the right time. Crowdsourced gig-fleets can give retailers greater flexibility in delivery and extra capacity when they need it. Supply chain visibility is the bow that ties each of these together, giving not only consumers visibility into the status of their delivery, but supply chain managers visibility into the entire delivery process from manufacturer right into consumers’ homes.