In 2016, online sales reached a staggering 396.4 billion dollars, according to the Department of Commerce. Ecommerce is here to stay, and the prevalence of e-commerce means sales companies who wish to stay competitive need to have an ecommerce presence and need to understand ecommerce supply chain management.
To understand changing ecommerce logistics, it’s a good idea to look at some of the ecommerce logistics trends as established by giants like Walmart, Amazon and Target. Here are some of the trends in ecommerce logistics that these companies are successfully putting into practice.
One of the biggest challenges ecommerce retailers face when it comes to delivering packages fast and on-time is the “last mile” problem — that is, getting a package from the local delivery center to the customer’s door while still staying within the established time frame.
One solution the bigger retailers like Walmart and Amazon have come up with is to cut out that last mile entirely. Options that these companies are using or experimenting with include local personal delivery lockers or kiosks that customers can conveniently drive to in order to pick up their packages and ride-sharing-style services where ordinary drivers can sign up to deliver packages to local recipients in their area.
Fast, Free Shipping
Amazon has been extremely successful with their Amazon Prime program, a membership subscription service that includes, among other things, free two-day shipping. Providing free two-day shipping requires a considerable expansion of warehouse space and supply chain personnel, but the built-in customer loyalty they receive in exchange is worth it.
Third Party Inventory
Companies like Amazon, Target and Walmart don’t necessarily only sell their own inventory online — they may feature smaller businesses as well, taking a portion of the profit for highlighting another business’ products on their site. They save on inventory and warehousing and concentrate on handling the logistics of getting those products to their consumers faster.
As requirements for fast packaging, shipping and delivery increase, the necessity for quality automation increases as well. Many companies will not be able to keep up with the costs and time requirements of human labor. Even if upgrading your automation is costly or time-consuming in the short-term, over time it will be necessary to automate as much as possible in order to compete.
The types of moves that these big-box retailers are making may seem out of reach for smaller businesses, but they don’t have to be. It’s simply a matter of scale. If you make small moves towards matching the new ecommerce logistical model, you should be able to compete in your space and continue to grow.
For companies requiring the safe shipping and transporting of goods in industries like the food, beverage and pharmaceutical sectors, Polymer Solutions International Inc. can help with sustainable plastic pallets and bottled water racks and packaging solutions that are consistent, durable and can fit into virtually any modern logistical plan. Learn more online or by calling 610-325-7500.