The logistics industry hasn’t historically been known for its flexibility. While it’s true that the process of getting products from one place to another will always be somewhat analogue, there is a wealth of data inherent to logistics that has the potential to strategically influence business decisions. Our space is the natural integration point between OMS, WMS, and TMS systems, which provides rich data sets that can and should be aggregated and analyzed with machine learning to mine out some really valuable information for merchants. There are five major ways that analyzing logistics data with machine learning will benefit merchants.
- Choosing warehouse placement according to geoproximity to largest customer bases, warehouse capacity, and required warehousing or transportation capabilities.
- Determining how much inventory merchants should be carrying and how it should be distributed.
- Optimizing sku profiles by calling out highest and lowest performers based on profitability, rather than just sales velocity.
- Determining when and how much product to reorder for optimal inventory carry costs and supplier bulk order discounts.
- Forecasting demand based on historical sales and patterns of seasonality.
At first glance these solutions may look like bottom-line revenue solutions, and on one hand they are. However, at Ware2Go we’ve seen first-hand that these solutions are also top-line revenue drivers. The problem of demand generation is one that marketers have long been trying to solve from the top-down, but the real secret to demand generation is having the right products in the right place at the right time. When you’ve solved that problem, all you have to do is let your customers know that the products they want can be on their doorstep in 1 to 2 days, and the demand will come.
Saying Aloha to a New Sales Channel
Our client Aloha, a plant-based protein brand, leveraged our AI-powered tool, NetworkVu, to build their distributed network before they ramped up their direct-to-consumer sales channel. They knew that the expectation across the board for ecommerce fulfillment is 1 to 2-day delivery. They chose to create demand from the bottom-up by building a network that could deliver on that expectation before they ramped up their marketing efforts. The insights generated by NetworkVU showed them where their largest pockets of demand were located and where they needed to stock their inventory to best serve their customers, allowing them to offer 2-day delivery to 98% of their customers.
Aloha launched into their D2C marketing efforts with the confidence that they had their inventory in the right place to serve their customers at just the right time. As a result, they saw a tremendous ROI on the work they put into revamping and marketing their ecommerce website. In the year following their network optimization, they grew their D2C sales channel by 250%. This is how businesses of all sizes can scale quickly and really expand their market share.
Data Is the Future
Network optimization is just the beginning for Ware2Go as we reimagine the traditional 3PL model and find more meaningful ways to partner with our merchants. We’ve seen how digital sales channels have evolved to be fully flexible and scalable, able to be turned on or off at a moment’s notice and integrated with marketing and CRM functions. We’re here to create the same experience as a fulfillment partner. The only way forward is more flexibility and more options, and the only way to get there is data.