TAKEAWAYS Shaping the Future of the Global Supply Chain
LAND OF THE LOST AND OTHER PEAK SEASON CHALLENGES A whopping 92% of merchants surveyed by UPS Capital report costly impacts to their business as a result of lost, stolen, or damaged shipments. Half of merchants say they lost $50,000+ in the past year. As peak season arrives, and more packages hit the road, businesses and carriers are becoming more aware of shipping mishaps in the delivery experience—and for good reason. These incidents range from traditional hiccups, such as late, lost, and damaged deliveries, to emerging threats like porch piracy, fraud, and climate-related issues. Among UPS Capital’s key findings on these emerging threats: • 61% of shoppers say they won’t order from a small or mid-sized business anymore after two or three delivery issues—meaning shipping incidents are not only damaging to a merchant’s reputation, but also damaging to the bottom line. • 75% of merchants experienced an increase in damaged, expired, or lost packages due to climate change over the past 12 months. • 37% of merchants report credit card fraud is a growing risk to their business, while 31% say that return shipment fraud—such as missing merchandise and altered labels and return addresses—significantly impacts profitability.
How Macy’s Avoids Inventory Glut Retailers across the country are struggling with inventory pileup due to 2021’s massive supply chain delays. Unloading these previous-season goods has become a top priority for the upcoming holiday and winter season. But Macy’s is singing a different tune: the retailer managed to avoid most of this inventory glut, and reported to the Wall Street Journal that more than half of its offerings for the holiday season will be new. Macy’s inventory was up just 7% at the end of its most-recent quarter compared with a year earlier. Counterparts are not faring as well— inventory jumped 48% at Kohl’s, 44% at Nike, and 37% at Gap Inc. How did Macy’s do it? Analyzing credit-card data earlier this year, the company noticed changing trends in spending patterns and, in response, cut orders and shifted inventory. Execs from finance, supply chain, merchandise, and planning departments decided together to move away from the pandemic big-sellers like comfy clothes and home décor items and instead increased orders of dresses, suits, and shoes for a return to office and formal wear. Also helping Macy’s is the fact that it does not rely as much as other retailers on private-label goods. This makes it easier to adjust inventory nimbly. Also in store: Macy’s is building its first automated fulfillment center. Located in China Grove, North Carolina, the 1.4m-sq.-ft. fulfillment center will account for nearly 30% of Macy’s digital supply chain capacity and serve customers nationwide. The facility will be equipped with automation technology to increase capacity and productivity to help drive digital sales growth.
18 Inbound Logistics • November 2022
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