6 Questions With … Matt Crawford

The world of e-commerce and last-mile delivery continues to evolve and was a big focus of many panels and show floor discussions at the most recent National Retail Federation Big Show in New York City earlier this month.

Matt Crawford, vice president of business development and general manager of shipping at BigCommerce, is on the front lines of these trends, and spent some time answer our questions for this 6 Questions With … feature.

(Answers have been edited for clarity and length.)

SCMR: What major trends are you seeing in the e-commerce/retail supply chain in 2024?

CRAWFORD: I think first, the supply chain continues to be top of mind, more so than it has been in the past. I think brands are doing this because they need to compete, number one, but two, as the ecosystem has changed, shoppers become more demanding. The supply chain can no longer be an afterthought. So, one, the supply chain’s going to continue to mature to stay competitive. That could be brands being more technology-orientated, making sure they link the promises that they give to shoppers in the checkout to their actual fulfillment capabilities. That could mean selling into new markets in a different way than you have before, or I think even using different technology providers to be more competitive like a 3PL.

If I think more tactically, we’re coming off a very inflationary cost market where brands saw supply chain and inventory costs continue to go through the roof. I see this being the year that brands have choice and more capacity in the freight networks than they’ve had in the past few years. Meaning brands actually can drive cost out of their supply chains this year as opposed to simply taking cost increases. You see more alternative carriers, like a Sendle for example, that brands are going to start to look at.

Then finally on returns, I think returns are one of the most interesting parts of the supply chain. Retailers want returns to go away, but consumers make purchasing decisions based on returns, so it’s a really weird dichotomy. I actually think you’re going to see more brands put returns front and center going into this year around how they use returns as a way to capture new customers.

SCMR: What do you see as the biggest challenges for the retail supply chain in 2024?

CRAWFORD: Remember three years ago when the only thing that you had to do was call your supplier, get [products] on a boat, bring the products into your own warehouse, pick between UPS, FedEx, USPS to deliver, and the customer would deal with it. That’s where we came from and it was in some ways so simple. I think the biggest challenge is you have a more demanding customer, you have more global conflict, you have inflationary costs, and probably more competition. I think brands are forced to make investments here, to link a brand promise. What do they say in the storefront? How do you actually deliver? How do you give shoppers near real-time visibility of everything going on with their order, and then ultimately in an environment where you have to save money? I think the biggest challenge is that you have a more complicated supply chain that’s more distributed or disparate than it has been in the past. You need to manage that complexity to succeed.

SCMR: We can realistically say that every company is a logistics company today. Logistics has become such an important part of the customer journey, how do you see companies/brands addressing this?

CRAWFORD: If I think back to my past life at a big consulting firm, I was the recipient of those million-dollar budgets and we would do long projects to collect a lot of data, build a complicated model, and come up with these recommendations. We’d give the client a deck and say, ‘Go implement.’ Today, you can import all of your data from BigCommerce into one app that’s free in the BigCommerce marketplace and that app will, in almost real-time, tell you where the best facilities are or where the best locations are to minimize transit time and minimize costs.

I think you can get pretty good with five solutions that don’t cost that much money, and it all should be ROI-positive. One is a self-service returns portal on your website that tells a shopper if you buy from me, they have confidence that they can return if it doesn’t work. That should be ROI-positive in terms of higher conversion rates. You need to give accurate delivery dates in checkout to shoppers. Again, I think it should pay for itself in conversion rate. You should be using a multi-carrier shipping app like ShipStation or something similar to pick the cheapest way to deliver each order. The last one, as you get a little bit larger, is one of the management systems—an order management system, a warehouse management, an inventory management system. One of those that helps you solve your level of complexity. You don’t need a lot of money. For brands that deploy all of those, I think they are 90% of the way there of what the biggest companies in the world can offer for just a couple hundred bucks a month.

SCMR: Shippers continue to raise rates, yet customers have come to expect free shipping. How can brands navigate this dynamic without harming their customer retention? Could free shipping become a thing of the past at some point?

CRAWFORD: Let me give you an example. I bought a pair of glasses from Warby Parker this week. Warby Parker says, ‘We’ll mail you six pairs of glasses. You try them all on, send them right back.’ Because I don’t have a location nearby, their brand promise is predicated on not only the outbound shipping being free but the return shipping. If I find something online and shipping’s not what I’m happy with, I’ll go search for the same item on Amazon or a marketplace, and most likely I’ll find the same or something similar that I’ll buy instead. So, I don’t think free shipping can ever go away.

We’ve done some research at BigCommerce around the number of shoppers who still look at free shipping as a requirement and how free shipping in the cart continues to drive conversion rates higher. Our research continues to point to higher conversion rates with free shipping and shoppers turning away from sites that don’t offer free shipping. So the question is, what does a brand do?

I think the biggest thing is, and this varies based on the business. If you’re a furniture business, the way you think about free shipping is different than if you’re an apparel business that’s struggling with inventory and wants returns so they can resell them, or someone selling final sales or collectibles that doesn’t want them back. It really depends on what type of retailer, but I think across the board is one, giving consumers the chance to qualify for free shipping based on loyalty programs, membership programs, and higher order values. Two, giving consumers the chance to pay for faster shipping. I think balancing the delivery promise with price and speed, and for brands to find out what’s their promise and how shipping fits into that.

SCMR: What level of carrier diversification is the appropriate level, how do shippers manage this diverse network, and what impact does diversification have on shipping cost?

CRAWFORD: Diversification is an interesting one because at the simplest level, the carriers—UPS or FedEx—want all your volume and they’ll use aggressive pricing strategies to get the extra volume. So that way, even if you can save 10% on your overnight shipments by switching or you save 20% by moving to ground with USPS, the pricing that UPS and FedEx use isn’t prohibitive of trying different things. The trick is, and what I encourage all brands to do, is first, when you think of diversification, don’t go to the regionals yet. Think about having your primary carrier and who’s your secondary. You never want to have all your eggs in one basket, not only for price, but also for performance. I always think 20% is a good starting point. Some brands will go higher or lower, but I always think 20% with your non-primary.

Today, for every one of the brands we work with, the first step is to use a multi-carrier shipping app or an OMS that connects to multiple carriers. The trick should be when you print out a label, it should be just as easy to send it to Sendle, Amazon, UPS, USPS or OnTrac. Operationally, it’s much simpler than it ever has been in the past.

SCMR: Returns and reverse logistics have become critical to shippers’ bottom lines. Is there a prevailing thought among BigCommerce customers on how returns should be handled?

CRAWFORD: We talk about returns as the buzzword, but it’s really what’s your disposition strategy as a brand, which could be returned for resale. It could be reused. It could be return-and-refurbish like you see in furniture. It could be don’t return and get the refund. I think the general piece of this question is how brands are thinking holistically about reverse logistics, which is different than just returns.

If I go back a year or two during COVID, inventory was being sold above list price, or prices were inflationary, and so you wanted to sell. You were happy to take something back because you knew you were going to able to sell it. When a brand’s sitting on lots of inventory now and they’re having to discount like we saw a little bit this last holiday season, a brand’s less likely to want to resell. So I think that the biggest thing I’m seeing with brands is, depending on the vertical, there are slightly different things happening. I’m seeing the circular economy—they refurbish a couch and resell it. I’m seeing that pop up a little bit.

For most brands today, what I’m seeing is how do you make returns easier or more operationally palatable, so you don’t have to call a call center to process a return. I’m seeing them take the first steps in self-service returns, categorizing the reason for the returns, and making it as cheap as possible to accept the returns. It sounds silly, but what I’m seeing more of is just the basics of how you bring returns more upfront in the customer journey to increase conversion rates. I think that’s the first step, and I think on the more advanced side, we get into the disposition strategies that I talked about. Overall, I think it’s using returns to drive conversion as the major trend that I’m seeing.

SCMR: Thank you Matt.

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