Vince Atkin, Overstock’s vice president of supply chain, stated that a delivery message of 2-day shipping has a 30% higher conversion rate than a 3-day or more delivery message.
Overstock.com knew from the previous year’s data, they would need to improve their delivery times to customers significantly to close sales and compete with other online ordering services during the holiday season. To do so, they would need products warehoused closer to the customer.
This only made sense though for the highly impacted holiday season. “It would be foolish to build a network that could handle Cyber 5 volume and let it sit there for the other 51 weeks of the year,” Atkin says about shipping carriers handling increased volume.
So Overstock.com staged its promotional products at its third-party logistic warehouses so it could ship products to customers faster.
This is from a very brief article from Digital Commerce 360.
It’s a very quick read. It also highlights the importance of decipherable data for Overstock.com to arrive at the important insights regarding customers’ sale conversions and customer retention.
Overstock also uses a machine-learning model to forecast fulfillment that factors in historic carrier performance. It builds rules into its reporting to flag issues. For example, if an order hasn’t moved in a couple days, there is likely a problem. Overstock will reach out to its carrier if an order hasn’t moved within 48 hours to proactively deal with any issues, instead of waiting for the carrier or a customer to flag an issue.
(read entire article – 1 minute)