Small and medium-sized businesses (SMBs) operating in today’s increasingly digital world can no longer afford to ignore the power of data. A new report from McKinsey shows that data-driven organizations are 23 times more likely to acquire new customers, six times as likely to retain them and 19 times more likely to be profitable. Data holds the key to uncovering invaluable insights into customer behavior, market trends and operational efficiency, enabling SMBs to make informed decisions and gain a competitive edge. With limited resources and small teams wearing multiple hats, however, effectively harnessing the power of data may seem out of reach for many SMBs.
Fortunately, there are a few accessible strategies SMBs can employ to unlock data’s potential, even without the luxury of a data scientist on staff. From leveraging historical data, diversifying shipping carriers, tapping into sales projections and optimizing eCommerce packaging, data helps pave the way to success in the modern business world.
Leverage Historical Data to Drive Future Results
By analyzing past customer behavior, SMBs can gain a deeper understanding of what drives their customers’ purchasing decisions and how these decisions impact supply chain expense. Patterns and trends within the data reveal valuable information about customer preferences, including their preferred products and channels. Armed with this knowledge, SMBs can make data-driven adjustments to their offerings that align more effectively with customer expectations.
Diving into historical data also enables SMBs to evaluate the effectiveness of their initiatives and campaigns and identify which strategies and tactics were successful, as well as what areas require improvement. This iterative process of learning from historical data empowers SMBs to continuously refine their approaches, ensuring they make data-backed decisions that drive better results.
Diversify Carriers for a Stronger Shipping Network
The parcel market is expected to reach 28 billion in volume by 2028. In order to navigate rising consumer demand at minimal added cost, SMB shippers must be more open to diversifying their shipping network, including working with regional and other alternative carriers where it makes sense.
By utilizing data to analyze shipping patterns, SMBs can identify bottlenecks, unearth opportunities for carrier diversification and mitigate risks associated with relying on a single carrier, like capacity constraints, service interruptions or other unforeseen circumstances. Partnering with a diverse set of carriers enables SMB shippers to run smoother operations and better meet customer expectations while upholding their reputation for reliable and timely deliveries.
With data-driven insights, SMBs can select the most efficient and cost-effective shipping options, optimize transportation routes and minimize delays for their customers.
Tap into Sales Projections to Negotiate Better Pricing
In the past, smaller shippers with limited volumes had fewer options to secure lower shipping rates. Today, the landscape has evolved, presenting new opportunities for SMBs.
Both UPS and FedEx have publicly stated their focus on the SMB sector during recent earnings calls, making them more competitive in the small shipper environment. In an increasingly competitive market, SMBs have various options to strike a deal. To effectively manage inventory and negotiate better pricing, however, SMBs must come to the table armed with accurate sales projections.
By analyzing historical order and cost data, market trends and customer demand patterns, SMBs can make informed predictions about future sales volumes and enter pricing negotiations on a stronger footing.
With market volatility in play, the pendulum is currently swinging between competitive pricing for “good” freight to price increases for large, remote “ugly” freight. Now is the time for SMBs to take advantage of the carrier competitive market to lock in the best rates possible for the coming year and beyond.
Optimize eCommerce Packaging
In the fast-paced world of eCommerce, packaging can significantly impact operations as well as customer satisfaction. In fact, a 2022 Ipsos survey found that nearly three-fourths (72%) of American consumers say packaging influences their purchasing decisions, underscoring just how important this piece is for SMBs.
With the eCommerce boom of the last few years, many small and mid-sized retailers have been eager to get their products out and capitalize on emerging opportunities. However, rushing this process can lead to inefficiencies and additional packaging surcharges and fees. Through careful analysis of shipping weights and dimensions, SMBs can optimize packaging sizes to better match product dimensions, eliminate excess space, mitigate split orders and reduce dimensional weight charges imposed by carriers. Additionally, the use of appropriate packaging materials ensures products remain secure during transit, minimizing the risk of damage and costly returns.
Analyzing customer feedback also plays a pivotal role in optimizing packaging, providing valuable insights that help businesses refine their packaging strategies and ensure products arrive at customers’ doorsteps in pristine condition, enhancing customer satisfaction and fostering repeat business.
With the strategies outlined above, SMBs can harness the power of data to unlock cost savings, enhance operational efficiency and achieve greater success in their fulfillment processes, all without the help of a dedicated data scientist.