If you’re an e-commerce logistics and fulfillment partner, you have to be more than a tech layer to succeed. Similarly, if you’re an e-commerce brand, you need more than software from logistics partners.
In other logistical settings, tech-forward solutions are easily onboarded and serve as low-risk value-adds, but that’s not the case for e-commerce operations.
Logistics tech layers that are asset-light and services-avoidant do not get the job done for brands.
In the e-commerce space, logistics partners need to couple tech and services if they want to survive, let alone thrive, over the next five years. This means uniting data and insights (tech and software’s strengths) with concrete actions. Brands that can leverage tech and services will not only see rapid growth, but will also experience sustainable acceleration.
The shortcomings of tech without services
In keeping with the Software-as-a-Service (SaaS) mentality, most investors may advise that you avoid services to protect your multiples. In most cases, they’d have a point. However, in e-commerce (and especially e-commerce logistics), relying on tech alone comes at a steep disadvantage for both providers and the brands that work with them.
In the last decade, tech investors and e-commerce brands have sought out asset-light companies that maintain decentralized networks to tackle the third-party logistics space. These companies are solely tech layers rather than on-the-ground operators.
Companies like these promise to put your inventory in warehouses, but they do not control the operations of these warehouses or oversee shipping. Inventory is haphazardly distributed across dozens of small mom-and-pop fulfillment centers of varying performance and with varied packaging. This makes for a poor and uneven customer experience.
Imagine that you decide to entrust your brand’s inventory to one of these asset-light companies. This company may be able to provide information about where your inventory is and how much of it is in certain locations. But when you need to get someone to physically move the inventory, this tech-only company would have no control.
Without on-the-ground operators, this company is unable to guarantee that your inventory will get where it needs to be let alone respond dynamically. And this isn’t the case for just one small fulfillment center, but for all in the company’s network. Rather than streamlining your brand’s logistics, more obstacles to fulfillment inevitably arise.
Unless you find an additional partner to fill in with human-powered services, your brand will lose agility. Beyond providing information about your inventory, e-commerce logistics partners need to be able to act.
Logistics entails bridging data and insights with actions
Like everything fundamental to e-commerce, succeeding in e-commerce logistics means uniting data and insights (tech’s and software’s strengths) with actions.
The difficult — yet crucial — task of drawing insights from data relies on tech and software. Tech and software, along with human business intelligence, can best identify the issues and solutions surrounding carriers, brokerages, operations, and people that move inventory.
But, brands and logistics partners — more than identifying what and who can get your product from warehouses to customers — have to act on tech-powered solutions. Simply put, it’s not good to know something you can’t do anything about. So, it’s those brands and partners that can execute on data and insights that gain a competitive edge in logistics.
E-commerce brands need logistics partners that are not only able to identify problems with fulfillment but can actually act on these issues with robust, human-powered services. Partners that can both build excellent software solutions and physically move your products will add enormous value to e-commerce brands.
Uniting tech with services unlocks accelerated, durable growth
No matter how predominant new technologies — like those built on artificial intelligence — become, brands cannot rely solely on tech solutions to move products from Point A to Point B, let alone to succeed in e-commerce.
There will always be pieces to the fulfillment equation that cannot be fully automated. Brands may be able to get by with tech alone, but they want more. They want their tech to be world-class, yes, but they also want and need the people offering that tech to be human enough to understand the nuances of brand acceleration.
As a result, providers that combine tech with services will experience rapid and sustainable growth, and the brands that work with those partners, will benefit from the edge to accelerate their e-commerce around the world and across dozens of digital channels.
