The News: FedEx and Microsoft have teamed up on new cross-platform logistics solution for e-commerce. As part of this multiyear collaboration, the two companies will combine FedEx network intelligence capabilities with Microsoft Dynamics 365, intended to give online retailers, merchants and brands a competitive edge. The new offering would help improve customer engagement and provide better shipping options. Read the full announcement from Microsoft here.
FedEx and Microsoft Team Up on New Cross-Platform Logistics Solution for e-Commerce
Analyst Take: FedEx and Microsoft first announced their partnership in 2020 with FedEx Surround, the first customer-facing solution to use analytics to improve supply chain logistics and shipping — an offering very much in demand due in large part to the pandemic. This week, the two companies have announced an expanded partnership that will combine FedEx network intelligence with Microsoft Dynamics 365 to create a Logistics-as-a-Service solution for retailers and brands that will take customer experience to the next level.
U.S. based customers will soon be able to tap into the power of FedEx’s data integration with Dynamics 365 Intelligent Order Management. By using data and AI to create an order management app that can integrate into ERP and CRM systems, retailers will be able to gain better visibility into customers and their orders from various points of sale, while also leveraging data from the FedEx network to improve shipping logistics and shipping options.
Another key value proposition that I see here is the ability for retailers and brands to better deliver on the customer satisfaction front by improving supply chain insights leveraging the power of Microsoft Cloud. At a time when everything runs the danger of being commoditized, being known as a company that delivers best-in-class customer experiences can be a big competitive advantage.
Shipping Demand at an All-Time High
The pandemic dramatically shifted how many of us live, work, and shop. With consumers the world over making pretty much an overnight shift to online shopping, that has brought an inevitable growth in the volume of shipping. FedEx originally estimated that the U.S. package market would hit 100 million packages per day by 2026. That estimate has since changed to 110 million packages per day by this year — four years sooner than expected. Not surprisingly, FedEx also noted that 86% of that growth is coming from e-commerce.
Retailers and brands have been struggling with supply chain issues while attempting to deliver the customer experiences that consumers are expecting. But shipping logistics can cause major headaches and sour the customer experience even if the rest of the shopping experience was outstanding. We’ve all experienced packages getting lost or stuck in the mail and it causes great frustration across the board — from both personal and business standpoints. That’s where I am most excited about this expanded partnership between FedEx and Microsoft. It takes aim at this problem — and at the right time too. Better data means the ability to keep customers happy, even when their packages might be delayed, by way of honest and transparent communications. That lays the foundation for strong, enduring customer/vendor relationships, which is what both brands and customers want.
Logistics-as-a-Service for the Future
Logistics-as-a-Service is, in my opinion, yet another silver lining to come out of the experience of navigating a global pandemic. The FedEx and Microsoft partnership empowers retailers to create new ways to help serve customers while avoiding the logistics issues that have become an all-too-common occurrence with e-commerce. Logistics-as-a-Service is the right service at the right time, and I believe it will continue to help transform business operations and likely deliver a new wave of retail success.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
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A serial entrepreneur with a technology centric focus, Shelly has worked with some of the world’s largest brands to lead them into the digital space, embrace disruption, understand the reality of the connected customer, and help navigate the process of Digital Transformation. Read Full Bio.