Today, the retail businesses have begun to invest in distribution centers and warehouses now more than ever, in order to cope with the surge in demand from the modern e-commerce channels. While such kind of an investment will help augment the design, development & implementation of logistics & supply chain processes, the
E-commerce logistics will continue to transform in order to keep pace with growing consumer expectations. Some of the important trends in the E-Commerce Logistics industry include:
Rising demand for 3PL services
The demand for outsourced
3rd party logistics services will not decrease owing to the growth we are observing in the e-commerce sales industry. Third-Party Logistics services will come up with new offerings in order to render distribution facilities in several locations. They would do this for offering highly efficient order processing as well as fulfillment. We are more likely to witness adoption of several micro warehouses in urban areas that are closer to the consumers. Retailers who operate in more than a single distribution facility will have the ability for managing increasing order volumes, and would have better inventory management as well as achieve shorter delivery times.
ShipBob is a company that renders eCommerce fulfillment services and operates in more than two hundred and twenty countries. It possesses a fulfillment network that is spread across geographies. The platform offered by the company leverages proprietary technology to offer eCommerce businesses with quick, easy & feasible fulfillment solutions.
Direct to Consumer fulfillment
Although there will be a shift towards manufacturers of branded goods marketing as well as selling products to the consumers directly, it renders them access directly to their customer, providing a greater control over branding, reputation as well as customer service for the manufacturers. Gymshark, a fitness apparel producer has built a market of passionate fitness enthusiasts via influencer marketing as well as sales through social media.
“A huge advance in information technology has already taken place in all the industries including changes in the logistics and supply chain. A fast data transfer is a result of information technology in supply chain management resulting in increased cooperation,” says A R Srinivasan, Chief
Information Officer, TVS Electronics.
Reverse logistics
A few years ago returns used to be simpler when brands used to sell products via brick-&-mortar stores. Maximizing reverse logistics is highly crucial, and ecommerce firms should have the ability for handling goods flowing back in as efficiency similar to how it does for goods flowing out. While the cost of a return outweighs the value of the item there should be a process for handling this in order to avoid wasting money.
Optimizing last-mile logistics
The "last mile" is a crucial process in e-commerce logistics since it merges the conclusion of the delivery to the customer. Not just that, it also possesses an important influence on the overall delivery experience as well as customer satisfaction. Since there are several innovations which are aimed at solving the last mile challenge such as drones, autonomous vehicles, light electric vans, and eCargo bikes. One such company that uses drones is Amazon Prime Air. It is leading the way in flying drones, by rendering thirty-minute delivery to a few customers.
While there is huge progress made owing to technology, there is a way to go to enhance the supporting infrastructure as well as decrease the equipment’s high cost. There is significant interest in "last mile as a service" & we can anticipate that a few 3PLs should be trying to focus more on these last-mile opportunities as these can not only render affordable rates by optimizing transport routes but also render live delivery updates to customers. Another example is Starship Technologies, a company that uses small, six-wheeled drones for moving goods within a small radius, & has completed 2 million deliveries.
Growing focus on sustainability
Sustainability in the logistics sector continues to be an important factor in businesses today. E-commerce firms which have defined a sustainability strategy as well as managed to implement it are witnessing a major competitive advantage in the marketplace. Today people prefer a brand which is making sustainability efforts actively for becoming greener, as per a recent survey by McKinsey and over seventy percent of customers today will be paying a five percent price premium for products of equivalent quality that is manufactured by more sustainable means.
Any organization can decrease its carbon footprint via the better use of fuel-efficient vehicles. Micro warehouses can also contribute to minimizing carbon emissions as well as improving the speed of delivery. Recyclable and efficient packaging is now an expectation by customers - it is both eco-friendly and reduces shipping costs. Collaborating with suppliers on sustainability initiatives promotes innovation, customer loyalty, saves on input costs and limits supply chain risk.
The road ahead
As technology continues to be the enabler, cloud-based solutions which render access to real-time as well as reliable information will be crucial for making informed decisions as well as decreasing inefficiencies. Real-time tracking as well as location systems will be applied in transport logistics in order to ensure the safety & security of cargo & drivers while the automation of processes in logistics is predicted to continue.
The most important factor that would lead to the success of e-commerce will be through manufacturers & retailers who are coordinating with logistics partners for driving continuous improvement & technology tools will further help by rendering the necessary transparency as well as visibility.
