Building suppliers home in on delivery gross profit margins; Midsize suppliers upgrade tech stack to outperform large competitors; Returns shrink; Suppliers with pallet scanning skip the delivery line
CAMPBELL, Calif., Dec. 14, 2023 /PRNewswire/ -- As the building supplies industry continues to grapple with rising materials costs and supply chain challenges, DispatchTrack, the global leader in last mile delivery solutions, revealed five trends that building suppliers can expect to see in the coming year.
"There continues to be a lot of market volatility including spikes in materials and operating costs and building suppliers have to find a way to minimize the squeeze. In addition to rising costs, customers are increasing pressure on suppliers to deliver faster and accommodate fluctuating building schedules so they can stay on budget," Satish Natarajan, DispatchTrack co-founder and CEO. "In the year ahead, to better compete with large suppliers, we'll see midsize businesses make strategic technology investments in modern delivery systems to protect cost margins and more efficiently manage their customers' unique needs, such as accommodating short turnarounds, shifting project schedules, site-specific requirements or complex returns – all of which can incur significant added costs for large players still relying on manual systems."
Building supplies trends for 2024 and beyond include:
- Suppliers will look to the supply chain as a way to cut operating costs and gain efficiencies. They will home in on delivery gross profit margins. With the cost of goods rising, building suppliers will leverage technology to maximize last mile efficiencies. More suppliers will offer incentives to customers willing to delay delivery by two or three days in order to consolidate truckloads. Route optimization will be imperative to managing fuel expenses, and reservation systems so customers can secure delivery time slots will become more common to minimize costs and increase profit margins.
- Opportunity will arise for midsize suppliers to outperform large competitors by upgrading tech stacks so they can become more efficient and flexible than bigger players. While many building suppliers, particularly larger players, may continue to stick with manual systems for their delivery solutions, more midsize suppliers recognize an opportunity to level the playing field by upgrading their existing delivery tech stacks with modern cloud-based SaaS solutions. Digitizing the entire delivery lifecycle fundamentally changes the way branches operate on a daily basis by providing suppliers with full visibility from the moment an order is placed to proof of delivery or return. This enables better customer communication and allows suppliers to accommodate growing customer demand for next-day or same-day orders all while reducing stress on staff.
- Returns will shrink. Better customer communications will enable suppliers and customers to reduce returns. More suppliers will implement easy and convenient two-way communications with customers to mitigate over-ordering of products, limit the delivery of wrong products, and prevent return chaos before it happens. When customers are alerted where deliveries are and given an accurate ETA, customers on-site can be prepared to receive orders as needed. Additionally, customers can let suppliers know ahead of time if they won't be on-site to receive the delivery or if the location has changed. Suppliers will also look to implement will calls at branches and customer pickups at site locations.
- Priority will be given to suppliers that offer pallet scanning. Customers, especially large home improvement retailers, will increasingly prioritize delivery trucks that can offload materials the fastest. Tools such as pallet scanning, which allows an entire pallet to be offloaded with a single barcode scan versus scanning individual items, can cut offload time in half. For suppliers, it will reduce wait time and help ensure critical delivery windows aren't missed.
- Suppliers will invest in technology that plays well with their other systems. To save on time and prevent any added drain on resources, more suppliers will look to implement new technologies that can integrate easily and seamlessly with technology solutions they currently have in place, such as order management systems or ERP.
About DispatchTrack
DispatchTrack is the global leader in last mile delivery solutions, helping top brands around the globe power successful deliveries 1 million times a day. Since 2010, DispatchTrack's scalable SaaS platform has made delivery organizations more connected, agile, and intelligent using highly configurable capabilities designed to empower better delivery management from end to end. Our proprietary AI-powered routing algorithm ensures 98% ETA accuracy in last mile deliveries, and we're constantly innovating to improve performance and better serve our 2,500+ global customers, including Walmart, Coca-Cola, Ashley, Ferguson Enterprises, Cargill, McCain Foods, and many others. When businesses make promises to their customers—DispatchTrack makes sure they deliver.
