If you think eCommerce logistics trends are all about warehouse automation and last-mile delivery drones, it’s time to revise your views. The coming years are sure to surprise us…
– Let’s just charter a ship! – joked Sarah, Transportation VP at Home Depot, one of the largest DYI chains in the United States.
However, as she later admitted in an interview with the Walstreet Journal, the remark, made during a heated discussion about product availability, became the foundation for a new strategy of direct importing of high-margin products.
If the trend in logistics of traditional retail chains may become the rental of container ships, what awaits us in terms of eCommerce logistics trends?
eCommerce logistics trends
A year ago, when writing about trends in logistics for small & medium business, I mentioned three areas:
- outsourcing of operations
- diversification of supplies
- use of systems ‘as a service’
In hindsight I maintain my expectations. However, I will add one more meta-trend – polarization in the way supply chains are organized. I notice two seemingly contradictory actions undertaken by various companies.
On the one hand, more and more eCommerce sellers are vertically integrating their supply chain. They are investing both in operations with their suppliers and their existing contractors in the so-called last mile. All of this is done in order to increasingly control the availability of goods and the customer’s shopping experience.
CNBC has prepared an interesting piece on this subject. For those patient enough, you can watch the entire video at the end of this post.
On the other hand to increase the pace of their development more and more new eCommerce leaders decide to build their logistics based solely on a network of partners. An example of this type of organization is Emma. The Sleep Company, about which I will write in the article – When to use the services of 3PL?
Which direction is better? Is it worth paying attention to anything else besides integration, outsourcing, and the obvious automation of warehouse operations?
When asking important questions it is worth confronting your knowledge with the perspective of others. That is why I asked several experts for their opinions. Below are trends in eCommerce logistics according to eObuwie, RELEX, Gorrilas, Westwing, Shippeo, OEX24, and SmartStock.
Logistics Director, eObuwie
The growth of eCommerce depends on transportation capacity. Companies that can deliver same day or next day win. However, to optimize delivery time to the customer you need to look at the entire process from Line Haul to Last Mile and this task gets more complicated when scaling to foreign markets. Therefore, in the next years the trends in eCommerce logistics will oscillate around machine learning tools used to analyze customer behavior, optimize the distribution of goods, determine the location of warehouses and their capacity. Many startups already offer such services. However, they have nothing to work on if they don’t have the data. Tracking the goods, the process and the shipment at every stage – with the number of delivery methods, the number of markets and the level of platform complexity, these are the current challenges of the industry.
Presales Principal EE, RELEX
Over the past 2 years, there has been a rapid shift towards online shopping. qCommerce players are challenging traditional grocery stores by offering ultra-fast delivery. Successful retailers understand that they need to plan all their resources in an integrated and unified way to remain competitive. To deliver the right products in the right quantity through the right sales channels, make full efficient use of warehouse space and match workload and staff availability. This is why trends in eCommerce logistics are moving towards the increasing use of systems for end-to-end supply chain planning.
Global SCO Director, GORILLAS
eCommerce is gradually evolving into qCommerce. The battle for customers will be through 10-20 minute delivery offerings. Also in categories not associated today with food delivery start-ups. However, companies operating in the qCommerce channel will have to prove that such a business model can be profitable. In the next few years, we will see a series of acquisitions and consolidations, expansion of the assortment, as well as discussions on how to employ couriers. Adjustment of the network of distribution centers and optimization of Last Mile are great challenges from the point of view of availability of appropriate warehouse space, employees and cost control. Therefore, the overriding trend will be to design supply chains more and more audaciously.
Head of Logistics, Westwing
There are many components to growing an eCommerce business. The idea of acquiring new customers. But also a way to keep him, which increasingly depends not on how easy to place an order but on the possibility of a simple and quick return of ordered goods. Customers like and want to have choice at home. This is why returns, although they generate more costs than profits, are growing in importance and need to be optimized. The trend in eCommerce logistics is therefore becoming selective return processing based on economic analysis and autonomous machine learning algorithms.
Chief Strategy Officer, OEX24
New technologies in eCommerce dedicated logistics are a must. Not only for in-house logistics but also for logistics operators. The costs of automation of many processes are already equal to the expenditures that have to be made in the perspective of 2-3 years on human labor. Therefore, packaging and palletizing equipment, autonomous carts and sorters will play an increasingly important role in the logistics of new product categories. All this is accompanied by the development of IT systems. Only in this way designed logistics can be a competitive advantage of a company and in my opinion is the future of eCommerce.
Account Executive, Shippeo
The B2B sector today needs the same quality of service that is available in B2C channels. It is a paradox that when ordering a meal or a low-value item, the recipient knows where their order is and when exactly it will arrive. In comparison, B2B customers might expect a delivery worth tens of thousands of euros not to have such precise information. To optimize their operations and increase customer satisfaction, more organizations, therefore, require carriers to provide them with real-time tracking. Such trends in eCommerce logistics in the B2B sector are becoming more and more visible – we use platforms that give visibility within the supply chain.
Chief Executive Officer, SmartStock
The eCommerce industry is experiencing record growth. But at the same time, it is struggling with rising costs and delivery delays. Especially for products imported from Asia. This results in availability problems and the need for multi-criteria optimization. Today, it is not enough to find the optimum between availability and stock holding costs. It is also necessary to consider the economics of bulk orders, taking into account the rising costs of sea freight and its limited availability. A clear trend in eCommerce logistics is the extension of planning to include factors that were previously associated with supply chains in the manufacturing industry.
Advisory Board Member
Trends in eCommerce logistics include both automation and advance preparation of the delivery process at every possible stage. For today’s consumer, convenience and security are key. The eConsumer wants more and more right now and in the place of their choice. However, in order to remain profitable and at the same time provide the level of service that qCommerce companies already offer, you need not only to predict what the customer wants but also where and when. Therefore, the use of so-called Big Data in eCommerce logistics is growing.
Doing business my way
So how do you tackle eCommerce logistics in 2022 and the certainly interesting years ahead? I am of the opinion that it is worth considering the approach of one of the most original entrepreneurs of the 20th century.
When it comes to business (and everything else) just have the best time you can. Even if that means breaking commonly accepted rules.– Sir Richards Branson
The development of technology is a difficult thing to predict. So are consumer expectations. Not to mention “black swans” like the Covid-19 pandemic. But hopefully the perspectives gathered in this article will help you look at planning your logistics operations in a slightly different way.
Beyond the vertical integration of the supply chain of major corporations, only one thing is certain “software is eating the world”. This includes corashing the world of logistics faster which can be seen in the statements of most of the invited experts. The mentioned trends in eCommerce logistics largely concern the use of systems and tools to increase the efficiency of operations.
This year I will certainly write more on this topic. Meanwhile I encourage you to sign up for the newsletter. This way you will be up to date with the logistics concepts that will allow you to better manage your supply chain.
See you for the next article!
PS. Here’s the promised piece on integration to overcome chaos.