The U.S. economy faces potential contraction instead of obvious growth, and it’s easy to see the chaos this is causing in logistics. Large players like Amazon are dominating the news with plans to abandon dozens of facilities, while newer entrants into the market are slowing their scale or reducing headcounts. But if your fulfillment partner pulls back when markets slow down, they put your current sales and future profitability at risk.
Red Stag Fulfillment is maintaining our growth plan and improving client support even as the U.S. faces an uncertain year-end and 2023. This push comes from our existing commitments to expansion and the philosophy that leaders can find opportunities in any climate.
3 at-a-glance takeaways
- Retail leaders that invest during downturns protect their sales for the following year.
- Red Stag is still investing in team sizes and physical warehouse space to support growth.
- Aligning with a growth-focused 3PL makes it easier for you to invest in core business functions and products. You still get the benefit of fulfillment investments and improvements that enhance your competitiveness in market downturns and upswings.
Lessons from retail giants
ECommerce brands are at an interesting intersection compared to major retailers. Typically, individual brands can be nimbler to market fluctuations. But the industry as a whole can lag behind some smarter fiscal and expansion practices. That may include investment during a downturn, according to one recent report. It notes that big brands like Best Buy, Walmart, Lowe’s, and Home Depot prioritize their investments and even increase spending when things seem bleak.
Market analysts say these growth investments will position retailers to take customers from rivals in 2023 when strength is projected to return to the economy.
After the 2007-2009 downturn, 60 companies Gartner classified as ‘efficient growth companies’ that invested through the crisis saw earnings double between 2009 and 2015, while other companies’ profits barely changed — CNBC Report
On the other side of the coin, FedEx made it into the news by withdrawing prior financial guidance for its fiscal year. This move was ahead of reporting its fiscal Q1 2023 results. It let investors know it would come in $800 million under earnings forecast. In response to this challenge, FedEx is slowing hiring at more than 90 locations. And it will further reduce FedEx Ground Sunday deliveries in unspecified locations.
The combination of lower earnings from FedEx Ground, low shipping volumes due to pandemic lockdowns, and geopolitical uncertainty also weigh on the company. While the company is taking a hit on Wall Street, it is also saying current spending will help it improve efficiency and network operations going forward. That focus and its significant price increase set for 2023 demonstrate a forward-looking plan that will likely keep the worst impacts of any recession or downturn off FedEx’s doorstep.
Remember, a bad quarter doesn’t make a bad company, whether they’re a shipping behemoth or your eCommerce brand.
Red Stag’s current growth plan
So, investment during times of slowdown can help you protect current revenue streams and make it easier for you to beat out competitors in the following years when sales and economies pick back up. Growth must remain a top priority, and achieving it requires bold steps backed by the reality of current funding and a clear understanding of economic trends.
Outperforming executives break the powerful force of inertia by prioritizing growth, a choice that shapes behavior, mindset, risk appetite, and investment decisions across the organization. – McKinsey, How U.S. companies can build resilience, survive a downturn, and thrive in the next cycle
That’s why Red Stag Fulfillment is moving full steam ahead with our expansion. Our two strategic locations can reach more than 96% of the U.S. in two days. We’re working to ensure that stays true even as our partners reach record sales volumes. That means more warehouse space and larger teams, despite what you’ve seen Amazon and other companies do.
Right now, Red Stag has more than 743,000 square feet of warehouse space. Our new facility in Sweetwater, Tennessee, will add millions of additional square feet when it fully opens. The commitment to growth means we’re bringing buildings online as construction finishes, and the first 700,000 square feet will be available this fall. Success requires continued investment in our people, space, and technology. You’ll find that’s the core of our roadmap in 2023 and beyond.
As your company invests in its growth, partnering with us means you’ll have the warehouse space to expand SKUs and inventory levels while keeping our order accuracy, processing time, and inventory security guarantees.
That’s our commitment to results at scale. Ask us more about it, and ask your other partners and vendors, too. Just be ready when we ask about your investment plan so we can grow together.
What’s your elevator pitch for growth?
The economy is contracting, and consumers are changing how they shop. ECommerce is becoming the home of established brands, common staples, and the necessities of our daily lives. That means there are opportunities for core growth across a wide range of industries and product categories. Brands can and are stepping up to fill the gap, so eCommerce’s market share stays high even as overall spending may slow.
What’s your plan to capitalize on that opportunity? Where are you investing to secure your position today and gain more customers in 2023?
We want to hear your plan for growth and scale and demonstrate why many brands turn to Red Stag Fulfillment as a competitive advantage to keep customers happy and ready to buy again. That work starts with you telling us a little more about your company, your philosophy, and where you’re headed next. Our team can’t wait to hear from you and partner with you to help you achieve those goals.