Today, consumer expectations are higher than ever. In assessing 2024 trends, McKinsey & Company urged companies to “cultivate a detailed, up-to-date understanding of today’s and tomorrow’s consumers—who they are, what they want, and where and how they shop.” And what is a key component that will enable small businesses to compete? Speed. E-commerce giants, such as Amazon, set the bar by offering next-day delivery, which has quickly become the standard expectation among shoppers.
For small businesses, which comprise 99.9% of all U.S. businesses according to the U.S. Small Business Administration, meeting this demand can seem daunting. However, with the right strategies and tools, small businesses can not only meet these expectations but successfully compete with larger brands.
If 2023 is any indication, sales will surge again this winter. In the U.S. alone, retail sales in December surged by 5.6% year-over-year, reaching $709.9 billion, which marked a 10-month high and demonstrated robust consumer spending. Ahead of a high-demand final quarter, this article explores actionable strategies that small businesses can implement to optimize their supply chain, streamline operations, and leverage technology to achieve next-day delivery, thereby enhancing customer satisfaction and fueling growth.
Building a Responsive and Agile Supply Chain
A resilient and flexible supply chain is the backbone of any successful retail strategy. Small businesses must prioritize vetting and establishing strong relationships with reliable suppliers to ensure the timely availability of materials and products.
One effective approach is diversifying your supplier base. Relying on a single supplier can be risky, as disruptions or quality issues can halt your operations and leave you without inventory, which could be detrimental during peak sales seasons. By partnering with multiple suppliers, you can mitigate these risks and ensure a stocked storefront that’s ready to meet consumer demand. For example, a small clothing retailer could work with several fabric suppliers across different regions to avoid potential bottlenecks caused by regional disruptions. This last spring, companies had to work rapidly to diversify their supply as cocoa shortages surged and even considered innovating recipes that called for less cocoa as reported by J.P. Morgan.
Optimizing Warehouse Operations
Efficient warehouse management is also crucial for meeting the tight timelines required for next-day delivery. Small businesses should focus on organizing their storage spaces to facilitate quick and accurate order fulfillment.
Analyze your inventory to identify high-demand items and position them in easily accessible locations within the warehouse. This reduces the time needed to pack orders and accelerates the fulfillment process. Utilizing storage systems such as pallet racking or shelving units can help maximize space and improve organization.
Implementing standardized processes for picking, packing, and shipping is essential. Train your staff in these procedures to ensure consistency and reduce errors. For instance, using a “zone picking” method similar to lean manufacturing best practices, where warehouse pickers are assigned specific areas within the warehouse, can streamline operations and increase productivity.
Taking Inventory Management to the Next Level
Effective inventory management combined with advanced technology is crucial for meeting next-day delivery demands and enhancing customer satisfaction. Cloud-based inventory systems provide real-time visibility into stock levels, order status, and supplier information, enabling swift and informed decision-making. By integrating automation tools like barcode scanners and RFID systems, businesses can streamline inventory tracking, reduce human errors, and maintain up-to-date records, ensuring timely order processing.
Implementing strategies such as just-in-time (JIT) inventory helps optimize stock levels, reduce holding costs, and minimize waste by receiving goods exactly when needed for production or sales. Additionally, maintaining safety stock levels provides a buffer against unexpected demand spikes or supply chain disruptions, preventing stockouts and lost sales.
Advanced analytics tools are also essential for forecasting demand and planning inventory effectively. According to a 2024 eCommerce Performance Report on Shopify merchants, 98% of respondents faced challenges in aligning inventory with changing consumer demand, underscoring the importance of accurate forecasting tools. Regularly reviewing and adjusting inventory levels based on real-time data ensures that your stock aligns with current market trends, allowing for agile and efficient operations. Inventory Planning and Forecasting (PAF) solutions are optimizing the landscape for SMBs with data-driven forecasting capabilities to always meet customer demand.
Partnering with Reliable Logistics Providers
Selecting the right logistics partners is critical for achieving next-day delivery. Small businesses should evaluate carriers based on their delivery speed, reliability, coverage areas, and costs.
Offering customers multiple delivery options at checkout, including expedited shipping, can improve satisfaction and increase conversion rates. Providing real-time tracking information keeps customers informed and reduces inquiries about order status. Also, building strong relationships with your logistics providers can lead to better service and more favorable terms. Regularly reviewing carrier performance through metrics such as on-time delivery rates allow you to address issues proactively and maintain high delivery standards.
Monitoring Performance for Continuous Improvement
Continuous monitoring and analysis of key performance indicators (KPIs) are essential for identifying areas of improvement and ensuring the effectiveness of your delivery strategies.
At a minimum, small businesses should track metrics such as order fulfillment time, delivery accuracy, inventory turnover, and customer satisfaction rates. Utilizing dashboards and reports from your inventory and order management systems can provide valuable insights into your operational performance.
Planning for Peak Sales Seasons to Ensure YoY Success
Achieving next-day delivery is a challenging endeavor for small businesses, but it’s far from impossible. By building a responsive supply chain, optimizing warehouse operations, embracing technology, managing inventory effectively, streamlining order fulfillment, partnering with reliable logistics providers, and continuously monitoring performance, small businesses can meet and even exceed customer expectations ahead of an upcoming high-demand season.
In an era where speed and efficiency are critical, these strategies empower small businesses to level the playing field and compete effectively with larger brands. Embracing these practices not only enhances customer satisfaction, but also drives growth and long-term success.
Kristjan Vilosius is the Founder and CEO of Katana Cloud Inventory. Katana is a cloud-based software helping thousands of businesses manage their inventory, production, accounting, and reporting in real time — giving businesses everything they need to get their products to customers as soon as possible. Since 2017 and led by Kristjan, Katana’s founding team has raised over $51 million in funding and scaled its team of 6 to over 150 employees across Europe, North America, Asia, and Oceania.
Ready to transform your small business operations and master next-day delivery? Discover how Katana’s cloud-based inventory management solutions can help you streamline your processes, improve efficiency, and stay ahead of the competition.
Next day delivery stock image by SkazovD/Shutterstock
