The New Era of E-Commerce Logistics

This shift in the market, including longer lead time, is something companies need to start preparing for now.

Stock Mall

The industry has experienced an acceleration toward an e-commerce boom that has transpired over the past 10 years. Global e-commerce retail sales rose 209% during the month of April, as consumers moved in-store activity to online and mobile channels due to the COVID-19 pandemic, as stated by an ACI Worldwide study.

How COVID-19 is the final death of the mall

Consumers have been exclusively turning toward their digital shopping options over the past couple of months and this change in behavior will have a long-term impact. E-commerce will start to leapfrog within the next couple of years, potentially the next couple of months. As the world economy continues to open back up, consumers will continue to use alternative online ways to fulfill their shopping requirements. The brick-and-mortar store as we know them will suffer the most from this downsizing of the economy.

E-commerce in all sectors, including fashion and electronics, will continue to thrive in this new world we are living in. That is a clear trend that will most likely never cease. We are already seeing non-traditional e-commerce industries shift their focus to online, as portrayed by stores only being able to open up for curbside delivery as outlined by some regions step by step process of reopening after the pandemic. 

As social distancing guidelines continue to loosen up and stores are opening their doors again, companies are utilizing e-commerce as a way to supplement their offline sales much more frequently. Multichannel integration used to be just a buzzword before, but now companies are really doing it. For example, many consumers aren’t physically going into stores to do their shopping anymore. They have the option to purchase the items online from the comfort of their home. Then they have the option to scan the bar code given to them on their cell phones when picking up the item at the drive through at the store or simply have the purchased items delivered. 

As retail stores are now offering many multichannel shopping solutions, depending on how each individual consumer is comfortable shopping, supply chain and logistics companies need to adapt to the fulfilment needs of the retailers. By investing in emerging technologies at facilities, these companies are able to cut costs while adding flexibility, to ensure customer satisfaction. This will allow brands to enhance visibility, increase efficiencies, reduce complexity and expand their business.  

Companies shipping to retailers through a healthy transportation management system (TMS) will be able to manage B2C and B2B processes through a single inventory integrated into the warehouse management system (WMS). A good TMS and WMS helps 3PLs achieve their main fulfillment objectives. By having a strong systems setup, including a sophisticated business solution and reporting capabilities, these companies are able to provide retailers with a sense of visibility and predictability into their supply chains. 

Having predictable software makes it much easier for logistics operations to align consumer expectations and omnichannel distribution centers. Software enables the supply chain to easily adapt to changes in demand, changing market conditions or changes in strategy that reduce disruptions and downtime. The smoother things run, the more supply chain and logistics companies have time to focus on business capabilities and increase customer satisfaction. 

Supply chain visibility and making information accessible to all stakeholders

By using technology to achieve good visibility and keep on top of all the inventory options require, companies are able to precisely track the supplier network. The more transparent the supply chain is, with an effective flow of data, the easier it is to exceed the ever-increasing customer demand and provide them clear expectations of the deliveries.

Another thing to keep an eye on, is that capacities in the market have seemingly disappeared, especially in airfreight. This may only be in the short run, due to the current pandemic situation. By managing the customers’ expectations on when they receive their products, that will provide them a much-needed level of customer satisfaction. It will be interesting to see how the market will overall react to potential shortages and if it has an adverse effect on the supply chain for the long run. 

From a transportation perspective, a lot of cargo is traveling with passenger planes, and the market recently broke down by around 97%. People will be reluctant to fly anywhere for a while, anywhere unless they have to. As business is starting to increase, there is a good chance that air travel may not increase at the same rate, especially internationally. The capacity deficit will be seen especially high-value goods such as industrial parts and electronics often transported in the storage above the undercarriage of passenger planes. 

By watching all this closely, industry marketing teams will be able to plan ahead for peak season rushes. This shift in the market, including longer lead time, is something companies need to start preparing for now. As long as we are all prepared, we will come out of this stronger than ever.