Wayfair delivery methods have been adjusted, and small packages are being handled by a third-party carrier
Wayfair now uses a third-party carrier to handle small packages due to adjusted delivery methods
According to Retail Dive, Wayfair is adjusting its logistics and transportation policies by using data analysis tools to categorize packages by size and assigning them to different carriers. In addition, Wayfair will adjust search result rankings to prioritize products from sellers with lower damage rates.
Wayfair announced these changes during its May 4 earnings call. Specifically, Wayfair will categorize items into two types: small and large packages. Small packages with an average weight of 30 pounds will be delivered by third-party carriers such as FedEx. More expensive large packages will be delivered using Wayfair’s own freight trucks.
This new delivery method will help Wayfair save on last-mile delivery costs and find the most efficient and cost-effective way to deliver packages that cross over between small and large package categories.
These changes are part of Wayfair’s $500 million cost-cutting plan as net income, active customers, and order deliveries have decreased. Wayfair announced in January that it expects to achieve these cost savings by the end of 2023.
Wayfair CEO Shah said, “These are persistent, process-driven cost reductions that we expect to create economic benefits and efficiency improvements on every order, and we believe they will deliver even greater savings as sales volumes recover.”
Shah also stated that reducing damage rates can also help reduce high logistics costs. Wayfair is currently working with platform suppliers to identify weak points in products and improve packaging to more effectively prevent damage.
Furthermore, Wayfair also adjusted the ranking of search results based on damage rate data, prioritizing products with lower damage rates. This helped Wayfair reduce its overall damage rate in logistics transportation by more than 15%.
Through these measures, Wayfair will further reduce logistics transportation costs, provide customers with more attractive prices, and create a better customer experience by allowing customers to buy products with lower damage rates. The positive cycle generated by these measures will also be passed on to platform sellers.
Editor ✎ Ashley/BusinessDialogue
Disclaimer: This article is owned by BusinessDialogue and may not be reproduced without permission.