The Friday Report: December 27th, 2019

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

Amazon Improves on Sustainability and Stretches Free Return Policy

Recent research conducted by Oracle Retail indicates that 77% of shoppers plan to return holiday gifts this season.  Typically between 30 and 50% of those who received gifts return them due to wrong size, fit or color, according to a report from Navar.

Retailers are continually focused on improving the customer experience and are especially interested in turning returns into sales.  To this end, Amazon has already implemented free returns at Kohl’s and nationwide and recently announced label-free and box-free returns for selected purchases at over 5,800 locations.  By eliminating labels and boxes, Amazon will be improving on its record of sustainability.  This will reduce packaging waste and pickups for drivers.

E-Commerce Order Fulfillment Continues to Improve

According to a Cyber Monday test of 137 retailers conducted by Kurt Salmon of Accenture Strategy, the average shipping time for the top 10 retailers improved 18% over last year.  Accenture Strategy measured order accuracy, delivery costs and shipping speed for retailers including:

  • Amazon (through Prime subscribership)
  • Office Depot
  • Best Buy
  • Cabelas
  • CVS

The study reported that 64% of retailers delivered an entire order within one week, a major improvement of 50% in 2017.  Online order with store pickup transactions were measured at 88% processed on time, a 16% increase over 2018 transaction processing. 

Here are some other insights from the report:

  • Average order processing time was 2.5 hours, a considerable drop from 3.6 hours in 2018.
  • 85% of orders were fulfilled without issues, a 20% improvement over 2018
  • Average in-store wait time for order pickup was 4 minutes.
  • Customers who enter the store to pickup online orders are more likely to make additional purchases during their visit.

China Lowers Tariffs on Selected Products

According to a release from the Chinese Ministry of Finance on December 23rd, the country will reduce tariffs on over 850 products as of January 1, 2020 from all trading partners, including the U.S.  Here are some of the most notable items: 

  • Frozen pork
  • Frozen avocados
  • Non-frozen orange juice
  • Wood and paper products
  • Selected components of high-tech electronics

In addition, China will zero out tariffs on selected pharmaceutical products related to diabetes and asthma specifically to help decrease medication costs and help promote new medication production.

China has pledged that it will increase imports from the U.S. over $200 billion over the next two years, including in agricultural products

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