Internet commerce is a very promising and rapidly developing market. According to various estimates, the market for sales through online stores is growing in all countries along with the development of information technology. Forecasts show that by 2023, the share of e-commerce in total retail sales will be almost 25%.
At the same time, not all online stores can meet customer expectations due to incorrect or ineffectively built logistics and costs of transport operations. Too little attention is paid to this in the initial stages of business development. And therefore, during a direct encounter with a problem, much more funds and resources are required than would have been spent in the case of a timely organization of the issue.
How to make logistics meet the needs of modern e-commerce? Let's figure it out.
Delivery System: DIY or Outsource?
Building your own logistics system is not always the best option, especially when it comes to medium-sized or small businesses. It is always very troublesome and costly, plus it is impossible to do absolutely in all settlements. Each link in the logistics chain must be carefully calculated according to the following criteria:
- economic – costs;
- qualitative – the level of service;
- quantitative – delivery speed and order processing time.
The cost of a mistake is very high: when faced with problems, the client will simply give preference to another store. Unless, of course, you are the only seller of exclusive products that are the subject of the desire of millions of people.
Now logistics is almost entirely based on the support of information technologies, which are constantly evolving. If you are not tech-savvy, you run the risk of purchasing hardware and software that will become obsolete in a month without the possibility of updating. This way you lose money, time, and competitiveness.
Do you know about the return rate? The percentage of returned purchases in the online space reaches 40%, because, unlike offline, the product cannot be touched, measured, and checked in advance. You can imagine the additional burden on your delivery system that the need to coordinate returns will bring!
However, providing return logistics is essential. This is a sign of store reliability, an indicator of authority, and openness to dialogue with the customer. Its correct organization will become a huge advantage of the store and will favorably distinguish it from competitors.
Before deciding whether to engage in logistics independently or to outsource it, it is necessary to carefully calculate supply chains, evaluate cross-functional interactions, and compare approximate cost levels. Combining both options is not worth it: the more heterogeneous links in the supply chain, the more complex the system, the lower its reliability, worse quality of work, and higher logistics costs per unit of goods.
There are excellent services that allow you to calculate the cost of different types of international shipments by air, sea, or land. This is a great way to get instant pricing information based on your terms and dates. For example, SeaRates offers not only to consider prices but also to arrange transportation and provide insurance. A modern solution to modern problems.
Key E-Commerce & Logistics Trends: Tuned For Growth
We put both of these concepts side by side since logistics will provide online stores with key competitive advantages: product delivery within a few hours from the moment of ordering, flexible shipping and return times, special rates for the last mail delivery, and more.
Customers will receive their orders even faster than they do today, and express shipments will take less than a day and will be measured in minutes. Logical transformation in favor of an even greater digitalization of commerce is quite possible: selling goods online with consulting support from three-dimensional avatars. To protect manufacturers from counterfeiting, logistics companies will offer secure supply channels.
What we are seeing now is a focus on the personalization of offers and an individual approach to the client. New technologies make it possible to define the customer profile much more accurately than before, and this trend will only intensify in the future.
Due to in-depth analytics of the personal profile, hobbies, habits, lifestyle, and occupation of people, rather accurate individualized proposals will be formed. Also, information on new products and product range will be delivered to customers through all existing channels, taking into account their requests. In this way, retailers will be able to optimize their interactions with customers and minimize the amount of information unwanted for prospects.
As a result, advertising and marketing activities will become more effective and customer satisfaction will increase. The trend of personalization will inevitably affect the requirements for logistics: for example, the choice of delivery method will also be offered to take into account the individual needs of the client.
If we try to systematize other major trends by category, we get something like the following list:
1. The concept of everywhere commerce. Trading through social networks and messengers is gaining momentum, and some businesses sell their products exclusively in this way. Together with other options such as voice assistants, chatbots, and augmented reality, they have shaped the trend of barrier-free trading. If it is possible to use a messenger to get information about a product, almost all customers would go for this option. And the smartphone turns out to be useful even when the buyer is inside a physical store: it can be used to quickly study competitors' offers, find analogs, and so on. The logistics system is formed even before the full range of goods is presented, and is thoroughly tested before the first order is received.
2. “Every minute counts” express delivery. This primarily applies to the delivery of products ordered online. The trend to reduce delivery time has been outlined for a long time: some delivery services claim that it will take less than 15 minutes for the order to arrive. This was achieved by increasing the number of distribution warehouses and linking to specific areas. To ensure profitability, business owners will have to work hard to ensure high density and uniformity of orders.
3. Distribution of parcel terminals. Surprisingly, fast and free shipping is slowly becoming obsolete. The future belongs to automated home delivery, BOPIS (buy online, pickup in-store), and other omnichannel options that allow fulfilling orders much faster. The convenience of the parcel terminals is undeniable: the work schedule up to round-the-clock, convenient and accessible locations, no need to choose a time to meet the courier, and so on. This format has all the prerequisites for further modifications, for example, small parcel terminals in the halls of apartment buildings or weather-protected options for placing directly on the streets.
4. An increase in the share of delivery outsourcing. While many large sites continue to maintain their logistics and delivery systems, most middle-sized and small businesses choose to outsource their shipping. These outsourcing services do their job perfectly, being at the point when the leader has not been determined yet and anyone can take over the sweet spot.
5. The use of artificial intelligence. The power of artificial intelligence is mainly used to perform complex calculations: predicting long-distance delivery times, calculating loads and routes, using machine learning elements in automatic sorting machines, warehouse management, customer interaction, video recognition of actions, and people.
These are far from all the trends that are becoming more tangible in the light of the ultra-fast development of e-commerce. But these specific scenarios are already firmly rooted in the e-commerce industry and will show consistent results in the near future.
Wrapping Up
Nothing stands still. The increasing demand for customization requires a quick response from businesses that don't want to be left on the sidelines. That is why they resort to modern logistics solutions that allow them to meet customers’ expectations without breaking the bank.
