Walmart-owned Flipkart pledges 100% transition to EVs by 2030
With an eye on long-term logistics sustainability, Walmart-owned Flipkart has committed to a phased integration of Electric Vehicles (EVs) into its delivery fleet by 2030.
Flipkart is the first E-commerce company in India to commit to a complete transition to an EV fleet by joining the Climate Group’s global electric mobility initiative, EV100.
EV100 is a global initiative bringing together forward looking companies committed to accelerating the transition to electric vehicles (EVs) and making electric transport the new normal by 2030.
The E-commerce giant plans to incorporate this vision by placing requirements in its service contracts, installing the required charging infrastructure across its 1,400 supply chain premises, conducting awareness programs, and incentivizing delivery executives for using EVs.
In a statement, Kalyan Krishnamurthy, CEO, Flipkart Group, said, “As a homegrown company, we always pride ourselves in making e-commerce more inclusive, progressive and impactful for all our stakeholders, which also includes communities and the planet. We have been applying this ethos to the indigenous market to serve our consumers’ needs responsibly and consciously. Our commitment to the Climate Group’s EV100 initiative ties in with this larger vision of environmental sustainability and allows us to learn from the most forward-thinking global perspectives as part of the EV100 ecosystem. With our scale and scope and intense focus on the Sustainability agenda, we believe we can play a significant role in not just fast tracking the adoption of electric vehicles but also making clean mobility mainstream.”
This move by Flipkart joins the ranks of Cainiao, the logistics arm of China’s E-commerce major Alibaba, which had launched an ambitious green initiative called Alibaba Green Logistics 2020 to improve material recycling, packaging, route planning, and delivery methods in order to move towards a cleaner and greener future.
According to the Charging Ahead on Electric Vehicles:2020 EV100 Progress and Insights Report by The Climate Group, “Corporate and leasing fleet commitments will see the roll-out of more than 2.5 million zero-emission vehicles by 2030 – saving 42 million metric tons CO2e, the annual emissions of 11 coal power plants. Companies are making good progress toward their goals and have already rolled out more than 80,000 EVs and nearly 10,000 charge points for employees and customers.”
Flipkart has already started using EVs in Delhi, Hyderabad, Bhubaneshwar, and Jaipur. The company is expected to deploy EVs in Bengaluru, Kolkata, Lucknow, Mumbai, and Pune. Flipkart has also reduced its single-use plastic in packaging by 25% and has committed to moving towards 100% recycled plastic consumption across its supply chain by March 2021.
Sustainable logistics is the next big thing in the world of logistics and companies across sectors and geographies are already adopting greener practices. Green logistics will increase the use of eco-friendly packaging materials, EVs, vehicles with low carbon emissions, etc.
Route planning and optimization will play a key role in the success of green logistics. It will ensure lesser miles and delivery executives on the road while also increasing customer satisfaction and cost-efficiency.
Locus offers the best logistics optimization solutions to enterprises across sectors. Get in touch with us for a demo.
Walmart posts stellar second-quarter results, E-commerce sales jump by 97%
According to reports, it is the behemoth’s biggest earnings in 31 years. A major reason for this massive growth could be the fact that customers were cashing in on the stimulus checks offered by the US government.
Walmart’s online sales grew by $7.4 billion to $138 billion in the last three months compared to the same period last year. With COVID-19 cases increasing in certain parts of the country, there has been a “return of stock-up behavior”, according to Doug McMillion, CEO, Walmart. Doug also noted that the retailer’s food business had seen a surge because consumers were cooking more at home rather than going out to restaurants. Also, the sale of disinfectants and cleaning supplies had also gone up.
Walmart is planning to further build on these promising signs by adding their Walmart+ membership, but no further details like launch date, perks, etc. were announced during the investor call. Doug said that the potential Amazon Prime competitor program would help speed up deliveries, build trust, and collect data.
Walmart said that customers shopped for a wide array of products right from grocery, fishing poles, bicycles to TVs across both online and physical stores. The other interesting trend was that customers shopped less frequently, but ended up buying more. The average ticket size increased by 27% in Q2 as the number of transactions fell by 14%.
While all seems to be going well for the Bentonville-based retail major, the challenge was managing the supply chain for high-demand products.
On the international front, things are now starting to look up for the company. Government-mandated lockdowns had led to a slight dent in sales.
In India, the lockdown had affected sales in the first half of the second quarter, but thanks to the lifting of restrictions, Walmart-owned Flipkart’s Gross Merchandise Value (GMV) or gross sales has surpassed pre-COVID-19 numbers. Flipkart’s recent shopping festival Big Saving Days was a success.
Walmart isn’t the only company rejoicing. Home improvement retailer Home Depot posted a splendid Q2 result too with a 23% increase in quarterly sales. The retailer saw double-digit growth across important metrics like increase in customer transactions, average ticket size, and sales per retail square foot.
Clearly, customers have been busy redoing their homes, building furniture, and painting homes amidst the pandemic.
Managing supply chain and logistics is of utmost importance right now for companies. With customer satisfaction being the ultimate differentiator, brands have to ensure effective route optimization, smart delivery assignment, and territory-based planning, among other requirements, to increase their speed of delivery and efficiency which ultimately results in customer loyalty.
Amazon and mall owner Simon reportedly in talks to convert stores into fulfillment centers
There are recent reports that Simon Property Group Inc., the biggest mall owner in the US, is in touch with Amazon to convert a chunk of its store space into Amazon fulfillment centers. Though Amazon has not confirmed the development, it certainly makes a lot of sense as it brings the E-commerce behemoth closer to its customers thereby ensuring quicker last-mile deliveries. For Simon, wasted mall space can now generate steady revenue from a stable client.
According to reports, the two companies have discussed converting the stores previously occupied by J.C.Penney Co. Inc. and Sears Holdings Corp, into Amazon distribution centers.
While Amazon’s strategy to do quicker deliveries is to open distribution/fulfillment centers closer to customers, others are launching delivery services to do the same. Popular on-demand player DoorDash recently launched DashMart, a digital convenience store channel. The offering is already available in Chicago; Minneapolis; Dallas; Salt Lake City; the greater Phoenix area; Redwood City, California; and Cincinnati and Columbus, Ohio. Customers can get ready-made meals, household essentials, spices, sauces, etc. on this platform that works on a distribution center model. Each DashMart location will have 2000 odd items.
The unique selling point for this service is the lighting fast delivery speed of around 30 minutes. “You’re going to be able to get it in about 30 minutes,” DoorDash CEO Tony Xu told CNBC. “You really don’t have that proposition anywhere else. So from our perspective, there was an opportunity to serve both consumers and merchants toward the goal of making sure that we can get the best of a city to the customers that live there.”
India is not far behind either, food delivery unicorn Swiggy is all prepped up to launch InstaMart, a chain of virtual convenience stores, to deliver grocery and household goods within 45 minutes.
Swiggy is looking to have around 2,500 items in each dark store. These dark stores will give the Bengaluru-based unicorn better control over the customer experience and product range. This new offering will begin its pilot in Gurugram (formerly Gurgaon), followed by Bengaluru, according to reports.
Swiggy’s InstaMart move comes close in the heels of Walmart-owned Flipkart’s offering Flipkart Quick which promises delivery under 90 minutes. Flipkart Quick will provide a wide range of items like mobile phones and accessories, grocery, stationery, dairy, and meat products to customers. These products will be procured from retail stores, warehouses, and neighborhood shops. The service will kick-off in Bengaluru and will soon be launched in other cities.
All these developments clearly point to one direction—speed and proximity to customers like never before. In a cutthroat market, with all the attention on door delivery, the only real difference between competitors is the logistics preparedness. Customers, on the other hand, are now spoilt for choice. The Covid-19 pandemic has given brands the perfect playground to push the innovation envelope.
To ensure super fast and efficient deliveries, logistics Software-as-a-Service (SaaS) technologies will play a key role. Right from effective geocoding, route optimization, smart delivery assignment, to territory-based planning and task allocation, each step will bring in the much-needed efficiency.
Moreover, simulating ‘What-if’ scenarios on a digital twin, which is a digital model of the brand’s on-ground supply chain, will help companies plan better. Right from understanding the fleet mix for various on-ground scenarios to figuring out how many warehouses/dark stores they need to have in a particular geography to satisfy their predefined business needs, these ‘What-if’ simulations can help brands do it all.
India back on the E-commerce Sales Bandwagon
These mega sale events will help a lot of sellers move their inventory that has been locked up due to the pandemic and more importantly get their cash registers ringing. These headline events are expected to kick-off a series of sales events for the remainder of the year.
“Prime Day provides an opportunity for the smallest of businesses to participate, rebound from recent challenges and grow their business,” an Amazon spokesperson told The Economic Times. The spokesperson also added that more than 77% of sellers are participating in Prime Day for the first time and 68% are launching new products
Both Amazon and Flipkart have, over the past few years, introduced a lot of customer-friendly features like no-cost EMIs, exchange offers, and other bundled payment offers. These features will especially push customers to purchase more from online sellers in these times.
These sale events are already popular, but this year, it is expected that these events will push the envelope even further due to the heavy dependence of consumers on online shopping. The pandemic has been a shot in the arm for E-commerce and E-grocery firms as lockdowns were enforced across the country and consumers had to depend on these firms even for their most-essential requirements.
With restrictions being lifted across the country, non-essential deliveries are increasing by the day. Companies in the fashion, furniture, and electronics category will be relying heavily on sales events like these to make some much-needed moolah as this year has so far been slow.
While India is back on the sale bandwagon, Amazon Prime Day in the US has been postponed and the Seattle-based behemoth has not announced a date yet for the much-awaited sale.
World over, even the naysayers have been forced to rely on E-commerce due to the pandemic. E-commerce firms have also streamlined their supply chains to cater to the increased demand and have now earned more loyal customers.
According to an eMarketer forecast report, US E-commerce sales will jump by 18% this year to reach $709.78 billion this year, representing 14.5% of total US retail sales, due to the COVID-19 impact.
E-commerce firms have increasingly been relying on better logistics operations to be the differentiator in these times. With a not-seen-before surge in demand, initially, these firms struggled to meet customer expectations. Effective logistics has ensured that these firms can now even do same-day and express deliveries. Even effective parcel sorting in the warehouse ensures quick delivery to customers.
With more such sales events in the year, logistics will play a key role in determining the customer experience.
Amazon Fresh to widen its reach in the UK
Amazon Fresh, which is currently available in about 300 postcodes in and around London, will expand to cover more areas by the year-end. According to the Guardian, Prime members in Birmingham, Manchester, and Edinburgh will be among the first to benefit from a wider rollout.
From July 28, grocery orders above £40 requiring two-hour delivery will be free, but if a customer wants a one-hour slot, they will have to pay £3.99. Orders under £40 will cost £3.99 for two-hour delivery and £6.99 for one hour. The minimum order value has also been reduced from £40 to £15.
Until recently, grocery purchases needed a monthly add-on fee or a delivery fee of £3.99 or £2.99, respectively. This was apart from the annual Prime subscription fee (£79). According to BBC News, Amazon Fresh has about 10,000 products including fresh, chilled, and frozen food products.
This aggressive push from Amazon might mean increased pressure on other online players and offline supermarkets. With its huge war chest, Amazon can afford to give meaningful discounts and do free delivery.
Some of Amazon Fresh’s rivals in the UK include Waitrose Rapid, Sainsbury’s Chop Chop, and Ocado Zoom.
“Prime members love the convenience of grocery delivery at home, which is why we’ve made Amazon Fresh a free benefit of Prime,” said Russell Jones, country manager, Amazon Fresh UK. “Grocery delivery is one of the fastest-growing businesses at Amazon … We will keep improving the grocery shopping experience so by the end of the year, millions of Prime members across the UK will have access to fast, free delivery of groceries.” Russell Jones was quoted in The Guardian’s article.
E-grocery has seen a huge uptick across the globe due to the coronavirus. Online players like US-based Walmart, India-based Flipkart, among others, have been catering to increased grocery demands since the beginning of the pandemic.
In fact, multiple reports have said that Walmart will soon release a subscription service called Walmart+, and grocery is expected to be a crucial benefit of the subscription.
The pandemic might just have been the push that E-grocery players needed to firmly entrench themselves in the minds of the customers.
Seamless logistics will play a key role in enabling express and same-day deliveries. Logistics tech platforms that help with route planning and optimization, assigning on-demand orders, and visibility of on-ground executives will play a crucial role in determining the success of the E-grocery business.
Locus offers smart logistics solutions to companies in the E-grocery space. Get in touch with us for a demo.
Amazon Prime Day Delayed in the US
“Over the last five years, Prime Day has become a special celebration and time for Prime members to shop incredible deals for themselves and for friends and family — and it’s something we look forward to every year,” an Amazon spokesperson said in a statement. “This year we’ll be holding Prime Day later than usual, while ensuring the safety of our employees and supporting our customers and selling partners.”
Amazon has been focussing on the delivery of essential products since the start of the Covid-19 pandemic. While initially, it had a few supply chain issues, which led to delays and non-availability of products, the company’s operations have steadied over the past few months.
If and when the Prime Day does happen, the pandemic might very well throw cold water over the usual ‘festive’ feel of the shopping bonanza.
Meanwhile, Amazon has confirmed that it will hold the Prime Day Sale in India from August 6-7. The sale might very well be the much-needed panacea for sellers whose sales have seen a sharp fall since the onset of the coronavirus pandemic, which led to lockdowns across the country.
"Now in its fourth year in India, Prime Day starts at midnight on Thursday, Aug. 6 and will run for 48 hours, offering members two full days of the best in shopping, savings and blockbuster entertainment from the comfort and safety of their homes," Amazon India said in a statement.
World over, E-commerce has seen a huge uptick since the start of the pandemic. Customers were forced to depend on online services for their essentials. Even the naysayers have now tried E-commerce for various requirements. According to an eMarketer forecast report, US E-commerce sales will jump by 18% this year to reach $709.78 billion this year, representing 14.5% of total US retail sales, due to the Covid-19 impact.
With such intense competition, big players are now pushing the bracket even further. There were recent news reports that Bentonville-based Walmart will soon come out with Walmart+, a subscription service to counter Amazon Prime.
Amazon Prime has been around for around a decade and a half and has more than 150 million subscribers globally and costs $119 for an annual subscription. The perks include sales like Amazon Prime Day, express delivery of goods, music, TV shows, among others.
For mega sale events like the Amazon Prime Day, logistics plays a crucial part. Without an efficient logistics working in the background, on-time deliveries of orders is impossible. Customer experience is everything in today’s online-led world. Effective logistics enables same-day and express deliveries by helping with route planning and optimization. Even in the warehouse, efficient parcel sorting can go a long way in making sure that deliveries happen at a record pace. Moreover, analytics will help strengthen strategies.
Locus offers smart logistics solutions to enterprises in the E-commerce space. Get in touch with us for a demo.
Walmart+ set to take on the mighty Amazon Prime
Amazon Prime has been around for 15 years and has around 150 million subscribers globally. A Prime member, who pays $119 for an annual subscription, has access to express delivery of goods, TV shows, music, and a host of other perks. Prime members shop more often and are loyal to Amazon than non-Prime members. A chunk of the target audience for Walmart+ is the same set of families who are Amazon Prime users. This could potentially be an area of concern for Walmart.
But on the other hand, Walmart’s sales have seen a huge jump due to the Covid-19 pandemic. A few months ago, the company announced an extraordinary Q1 result where its comparable-store sales, a key retail metric, increased 10%. Additionally, Walmart’s online sales in the US jumped up 74% in Q1. While Walmart is pushing the online bracket, Amazon still has a huge lead in the online space.
Walmart’s trump card during the pandemic has been grocery. The company combined its colossal physical footprint, product availability, and increasing online presence to move ahead of the competition in the E-grocery sector. Walmart+ might also target the grocery and essentials market to kick things off. The subscription is soon expected to include general merchandise too.
“The top-growing E-commerce categories will be food and beverage at 58.5% and health/personal care/beauty at 32.4%, as Americans turn to online ordering for household essentials. Apparel and accessories, the second-largest E-commerce category in overall sales, will grow just 8.6% as consumers shift spending from more discretionary, nonessential categories,” said a recent eMarketer’s 2020 forecast report. “For the first time, Walmart will surpass eBay as the No. 2 E-commerce retailer in the US.”
According to the same eMarketer report, Amazon still retains the top spot. Amazon Prime is a key reason for its dominance.
“Everything we’re seeing with E-commerce is unprecedented, with growth rates expected to surpass anything we’ve seen since the Great Recession,” said eMarketer principal analyst at Insider Intelligence, Andrew Lipsman, in the forecast report. “Certain E-commerce behaviors like online grocery shopping and click-and-collect have permanently catapulted three or four years into the future in just three or four months.”
Considering the overall scenario, this just might be the right time for Walmart to come up with its subscription service as people are shopping online like never before.
Logistics will play a key role in enabling express and same-day deliveries. Moreover, as competition to gain customer loyalty is intensifying, logistics can actually be the real differentiator in ensuring customer satisfaction. Route optimization for on-ground delivery personnel might go a long way in ensuring SLA adherence. Track and trace capabilities and analytics will help in coming up with better strategies.
Locus offers smart logistics solutions to enterprises in the e-commerce and retail supply chain to improve last-mile deliveries with greater cost-efficiency. Get in touch with us for a demo.
Uber Acquires Postmates’ Food Delivery Business for a Whopping $2.65 Billion
Postmates is an on-demand delivery service that allows users to request deliveries of all types including food, groceries, and alcohol from local stores and restaurants. The company operates in about 2,940 US cities. Postmates currently stands fourth in the US on-demand delivery market with competitors like Caviar, Freshly, DoorDash, Deliveroo, GrubHub, and Instacart in the play.
Uber’s Postmates acquisition is expected to increase its share of the world’s food delivery market. Uber and Postmates were reportedly having discussions about the deal on and off for about four years, but the talks accelerated after Uber recently approached the latter. Both companies’ boards have approved the deal, for which Uber currently expects to issue about 84 million shares of common stock.
However, this does not change much for consumers. Uber said that it plans to keep the Postmates app running separately, supported by a more efficient, combined merchant and delivery network. Uber also plans to leverage its marketplace technology including routing, dispatching, and dynamic pricing to improve Postmates’ last-mile delivery operations.
The pandemic is transforming food, groceries, and restaurant supply chains dramatically, bringing a whole new dimension of convenience into the picture. As more and more consumers seek professional and on-demand hyperlocal delivery of groceries, fresh fruits, veg, readymade food, and even alcohol, big brands like Uber are making the most of this opportunity to grab a larger share in the market.
Needless to say, businesses in food and grocery delivery and the hyperlocal markets must brace themselves for heavy competition from bigger brands like Uber in the future. The biggest driver of success in the market is excellent customer service, and that can be achieved with fast, on-time, and professional .
The pandemic may drift away, but the impact it is causing on consumer buying behavior will linger around for a long time now. Efficient doorstep delivery is more critical than ever before now, and brands cannot overlook the importance of tech-based logistics in achieving desired last-mile efficiencies.
Locus offers AI-driven tech solutions to enterprises in the hyperlocal delivery market for efficient logistics management. Click here for a free demo.
Amazon acquires Zoox, makes entry into the autonomous vehicles market
Amazon is reportedly acquiring Zoox’s business for more than $1.2 billion. Zoox will however continue to operate as a standalone business within Amazon, led by Zoox CEO, Aicha Evans, and the company’s CTO & co-founder Jesse Levinson.
Zoox is creating a fully autonomous driverless car designed specifically for passenger rides, called a “robo-taxi.” Amazon intends to work with Zoox to create a fleet of self-driving taxis, in competition with Alphabet’s Waymo.
Self-driven smart cars and delivery fleets rely on sensors, actuators, complex algorithms, machine learning systems, and powerful processors to execute driving tasks, even on busy roads. Autonomous vehicles are capable of creating and maintaining a map of their surroundings based on a variety of sensors situated. Video cameras detect traffic lights, read road signs, track other vehicles, and look for pedestrians.
“Zoox is working to imagine, invent, and design a world-class autonomous ride-hailing experience,” Jeff Wilke, Amazon’s CEO of global consumer, said in a statement. “Like Amazon, Zoox is passionate about innovation and about its customers, and we’re excited to help the talented Zoox team to bring their vision to reality in the years ahead.”
According to a CNBC report, Amazon could also integrate Zoox’s offerings into its logistics network to offer cheaper and faster delivery, as well as its cashier-less grocery stores. This could be the beginning of a new era in logistics and customer satisfaction, led by Amazon’s self-driven delivery trucks and customized fleet.
Amazon’s investments are focussed on developing a tech-driven logistics infrastructure to bring orders faster to customers, with fleets of planes, trucks, and delivery drivers. With same-day delivery and hyperlocal delivery within a few hours becoming the new norm, Amazon’s self-driven delivery fleet will bring a whole new dimension to supply chain automation, lesser human dependency, and improved delivery efficiency backed by AI-driven vehicles.
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Amazon’s Big Style Sale a Sigh of Relief for Fashion Retail Brands
The Amazon Big Style Sale could last anywhere from seven to 10 days, CNBC reported. It’s being touted as the “Biggest Sale in the Sky.” The Big Style Sale is Amazon’s summer fashion sale, an event to drive excitement among consumers and jump-start the non-essential retail sales which have been lagging behind for months now.
The sale will include seasonally relevant deals from both established and smaller fashion brands, and the participating brands have been asked by Amazon to offer at least a 30% discount on their items. Amazon may offer up to a 50% discount on its own labels. Consumers can expect hot deals on product categories such as shoes, dresses, coats, jackets, shirts, swimwear, pants, handbags, watches, and jewelry for men, women, and kids.
As apparel and fashion retail outlets shut down for business back in March, this could be a big opportunity for both big and small brands in fashion to crawl back in the market via E-commerce. The participating designer brands include Calvin Klein, Frame denim, Fila, Rag & Bone, Theory, Vince, and Y-3. Other brands including Champion, Hanes, Adidas, American Apparel, Under Armour, and Levi’s will also be part of the sale.
While the Big Style Sale could be a ray of sunshine for fashion retailers, millions of online shoppers and sellers are still awaiting this year’s Prime Day eagerly. The E-commerce player is planning to push Amazon Prime Day 2020 from summer to fall this year, and it is likely to take place in mid-September according to WSJ. Amazon Prime Day 2019 took place from July 15-16 and was the largest shopping event in Amazon’s history, surpassing the previous year’s Black Friday and Cyber Monday sales combined with over 175 million items sold.
Postponing this extravagant annual shopping event seems like a well-thought strategy as it will allow manufacturers to get back on track and resume operations in full swing for this year. Due to the pandemic, Amazon too has seen challenges in warehousing, shipment, and logistics. The company has had to hire 175,000 additional workers to cater to the surged demand during the pandemic, and nonessential items are still seeing delays in shipment.
US retail sales have seen a sharp growth of 17% in May, followed by two consecutive months of record declines in March and April. As the retail economy comes back to life now, sellers can make the most of this opportunity and prep up for Prime Day with better offerings and customer service. Meanwhile, the Amazon Big Style Sale is here as a sign of respite for fashion retailers in the United States.
Walmart Partners with Shopify to Launch Walmart Marketplace for Online Sellers
“As we launch this integration with Shopify, we are focused on US-based small and medium businesses whose assortment complements ours and have a track record of exceeding customers’ expectations,” Jeff Clementz, Vice President of Walmart Marketplace announced. Shopify’s all-in-one commerce platform is used by more than 1 million businesses. Walmart initially plans to integrate new sellers as of now and expects to add at least 1,200 Shopify sellers this year.
Shopify has a dynamic portfolio of third-party sellers who could grow their business through new, trusted channels. This integration will allow approved Shopify sellers to seamlessly list their items on the Walmart Marketplace and offer Walmart’s customers access to a broader assortment of online shopping.
By joining the Walmart Marketplace, sellers can easily integrate their catalog, manage orders, arrange shipments, and provide improved customer care. Walmart only selects quality sellers with excellent customer experience history for this exclusive program. It is therefore essential to get approval from Walmart before joining the marketplace. Once approved, sellers can register with Walmart Marketplace, complete their profile, list their items, and integrate payment accounts.
With the growing demand for two-day and same-day home delivery of consumer goods, it’s high time for retail sellers to catch up with the trend. Brick and mortar stores can adopt tech such as intelligent route planning software and shipment tracking solutions to improve delivery operations, or partner with tech platforms like Walmart Marketplace to enjoy the benefits of quick deliveries.
Among the several benefits of selling via Walmart Marketplace is access to the Walmart Free 2-Day Shipping tag. With the tag, sellers can guarantee shoppers fast shipping and delivery of items for free. This is a win-win for the convenience-seeking consumer as well as sellers who have been striving to speed up last-mile deliveries.
Over the past few months, Walmart has taken some exemplary initiatives towards digitizing retail selling and offering safe shopping options to customers. Earlier in May, Walmart also announced its partnership with ThredUP, entering into the online clothing resale market. Walmart has also acquired the prescription management technology and related patents of CareZone, a digital platform for people to manage medications and doctor's instructions. This was Walmart’s another brilliant move towards digitization in the healthcare and medicine sector.
Clementz also mentioned that Walmart’s US E-commerce business grew 74% in total last quarter, and online sales outpaced the overall business even as first-party sales were strong. Such big moves from brick-and-mortar giants like Walmart clearly signify the importance of digitization in retail, efficient last-mile delivery operations and somnichannel selling to withstand competition from big market players and fulfill the rapidly growing digitally-inclined consumer base.
Locus’ best-in-class logistics solutions help retail and consumer goods enterprises improve last-mile delivery efficiencies. Get in touch with our experts for a free demo
US E-commerce sales to jump 18% this year
Even though the E-commerce sector has seen a sharp uptick of 18% to reach $709.78 billion this year, representing 14.5% of total US retail sales, it is still not enough to soften the blow suffered by the overall retail sector, the report noted.
Even with the economy slowly opening up, consumer spending might still remain cautious. “Total retail sales won’t rebound to 2019 levels until 2022, and estimates throughout the forecast period will be lower than previously predicted,” adds the report.
The top E-commerce categories are food and beverage at 58.5% and health/personal care/beauty at 32.4%. These aren’t surprising given that Americans are mostly ordering essentials via online platforms. The dampener is that the usually popular apparel and accessories category will only grow 8.6% as consumers are tightening their purse strings and being overly cautious about spending money on nonessential items, given the uncertainty of jobs across the country.
While E-commerce behemoth Amazon will still retain the top spot, Walmart has overtaken eBay as the no.2 E-commerce retailer in the country. Amazon’s Prime membership is a key reason for its continued dominance in the online shopping sector.
But the biggest mover in the sector has been the Bentonville-based Walmart. The company, which recently announced a stellar Q1 result where its comparable-store sales, a key retail metric, increased 10%, has also introduced a two-hour home delivery service in some markets. Additionally, Walmart’s big punt on E-commerce is finally paying off with online sales in the US jumping up 74% in Q1.
“Everything we’re seeing with E-commerce is unprecedented, with growth rates expected to surpass anything we’ve seen since the Great Recession,” said eMarketer principal analyst at Insider Intelligence, Andrew Lipsman. “Certain E-commerce behaviors like online grocery shopping and click-and-collect have permanently catapulted three or four years into the future in just three or four months.”
Walmart’s multi-pronged strategy which combines its large physical footprint, product availability, and online presence is making the company a favorite in the E-grocery sector.
“The data shows that 48% of all online shoppers used Walmart for online grocery, vs. 36% at Amazon and 24% at Kroger. While those shoppers are not necessarily exclusive to the brands they use online, 82% of Walmart’s online shoppers are using the offering at least once a month, Kantar noted,” says a Winsight Grocery Business Report, which has quoted a Shopperscape survey data from Kantar Retail.
Other retailers like Target and CVS are also seeing increasing traction on their paid memberships.
Logistics is playing a key role in this evolving scenario and companies are leveraging logistics technology to enable better route optimization for their delivery riders. Technology is also helping companies do better network optimization and adopt smarter dispatch practices like the hub and spoke model. Smarter logistics ensures better customer satisfaction.
Locus offers smart logistics solutions to enterprises in the e-commerce and retail supply chain to improve last-mile deliveries with greater cost-efficiency. Get in touch with us for a free demo
US Army Researcher Says a COVID-19 Vaccine Could be Ready by Year-End
Earlier in May, President Donald Trump had announced a public-private partnership, called ‘Operation Warp Speed’ with an objective to develop a viable vaccine for Coronavirus, then to manufacture and distribute it to the public prior to the end of the year.
He had also announced that Operation Warp Speed will be led by Moncef Slaoui, the former head of GlaxoSmithKline's vaccines division, and Army General, Gustave Perna. “Slaoui will oversee the vaccine development at Operation Warp Speed, while Perna will serve as the Chief Operating Officer overseeing logistics,” Trump had said in the statement.
The plan is to make at least 300 million doses, enough to protect as many as 90% of Americans. Scientists working on the operation have reportedly said that America plans a massive testing effort with over 100,000 volunteers and at least half a dozen of the most promising vaccine samples to deliver a safe and effective one by the end of 2020.
The role of the special operation is not just confined to the development of a vaccine, but also ensuring that it reaches millions of people in the United States, and later all over the world. Rapid mass immunization will be required for billions around the globe to combat COVID-19, and universal access to vaccines will be a major challenge for the pharma supply chain.
Maintaining a continuous cold supply chain and delivering the COVID-19 vaccine will be crucial in the future, especially to countries where electricity and cooling infrastructure is either non-existent or unreliable. This calls for a robust and sustainable global pharmaceuticals cold chain delivery system with temperature-controlled, vaccine-qualified refrigerators.
The use of innovative technology in logistics, such as real-time tracking of environment and temperature conditions, safe shipment of medications, and automated proof of pick-up and delivery of these shipments to various parts of the world will play a major role in fighting the global pandemic.
Apple to Reopen 100 More Stores in the US with Curbside Services
Apple has a total of 506 stores worldwide, spread across 25 countries. Over half of these stores, about 271 are located in America alone. This week’s reopenings will put about 132 Apple stores back in action in the states of Arizona, California, Florida, Georgia, Indiana, Kansas, Kentucky, Nevada, Missouri, Michigan, New Mexico, Ohio, New York, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Wisconsin, Virginia, and Utah.
“For customer safety and convenience, most stores will offer curbside or storefront service only, where we provide online order pick-up and Genius Bar appointments,” Apple stated. Some stores will however be open for walk-in customers, but with limited occupancy and customers will have to undergo temperature checks and maintain social distancing.
So here’s how Apple’s curbside pick-up arrangement works. When an item is available at a local Apple store, customers can order online and pick it up in-store, often within an hour’s time. In some outlets, customers can also select a window of time to visit the Apple Store to pick up their orders to avoid waiting. Apple also offers end-to-end customer support via the Genius Bar. Customers can make a Genius Bar reservation at an Apple Store and get curbside help from an expert.
The Novel Coronavirus has brought about some massive changes in the way people shop and supply chains function. Among several other trends emerging since the outbreak of the pandemic, curbside delivery services, Buy Online, Pick Up In-Store (BOPIS), and time-slot deliveries are majorly trending in retail. These are some great ways of integrating bricks and clicks and adding convenience to the customer’s shopping cart.
Social distancing is here to stay, even if the immediate effects of the pandemic fade off. It is pushing retailers to be more agile and adapt cost-effective ways to offer convenience to customers. More and more retail storekeepers are realizing the urgency and importance of going omnichannel and allowing customers to shop online.
Not just bigger players like Apple, but also small scale brick-and-mortar stores selling groceries and daily needs can benefit from implementing practices such as curbside pick-ups and BOPIS in their omnichannel strategies.
Locus offers smart logistics solutions to enterprises in the retail supply chain to improve last-mile deliveries with greater cost-efficiency. Get in touch with us for a free demo.
E-commerce sales skyrocket in America
A detailed analysis of online shopping patterns during the pandemic has helped Walmart to scale up operations and fulfill customer demands efficiently. The company experienced three waves of customer shopping behaviors. In the first wave, the primary demand was around grocery and consumable goods, especially paper supplies and cleaning products. The second wave was majorly focused on home-bound consumer goods including cooking and baking products, puzzles, games, bicycles, books, and entertainment products. The third wave was a gradual shift towards apparel and toys mostly attributed to stimulus funds.
“Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future”, stated Walmart CEO, Doug McMillon.
About 95% of the US population, more than 306 million Americans are currently locked down in their homes, due to the stay-at-home order imposed by the US government in 22 major states. As people remain indoors to prevent the virus from spreading, in-store retail visits have significantly dropped and more people are turning online to stockpile essential groceries, cleaning supplies, and medicines.
Overall, America’s E-commerce industry is seeing Black Friday-like business since the outbreak. Online sales jumped 49% in April, compared to early March before the nationwide lockdown was imposed. E-commerce players have hired more workers to cater to increased consumer demand for retail products.
Among other E-commerce players that have seen massive profitability during the pandemic are Home Depot and Instacart. While Home Depot’s online revenue increased by 7%, Instacart sold up to $700 million worth of groceries in April, 450% over its December 2019 sales.
The pandemic is not only changing day-to-day lifestyles but also consumer shopping patterns remarkably, gradually reshaping the future of retail buying. COVID-19 is here to stay, and the only way retailers can grow amidst this crisis is by adapting to it.
Omnichannel is the way to go for brick and mortar retailers, and businesses that already have an online presence need improved logistics offerings to fulfill customer demands and withstand the competition from bigger players like Walmart.
Locus offers supply chain optimization solutions to enterprises in retail and E-commerce. Get in touch with our experts to Schedule a demo
New Zealand wins the COVID-19 Battle: PM Relaxes Lockdown to Level-2
The country followed a strict four-level COVID-19 alert system, with 1 being the lowest risk of infection and 4 the highest. Lockdown in New Zealand began at Level 4, putting the country into a nationwide lockdown. People were instructed to stay indoors, in a safe ‘bubble’. Travel, public gatherings, and all businesses, except essential services were completely banned.
It was then moved a notch down to Level 3 at 11:59 PM on April 27, partially lifting some lockdown restrictions. People were instructed to stay home, other than for essential personal movement including for work, school, or for local recreation, keeping travel restricted to only short distances around local vicinities.
This will be Level 2 in New Zealand’s COVID-19 eradication strategy, lifting the rest of the lockdown rules while maintaining physical distancing. New Zealand’s COVID-19 battle has been successful due to its quick response to the pandemic, and the effective approach towards flattening the curve.
New Zealand’s remote location was also an advantage. It is a relatively remote island nation, and only a few flights transit through New Zealand. The country had halted international trade immediately after the first case was recorded on 28 February.
'Decisive action, going hard and going early, helped to stamp out the worst of the virus,' Ardern said in a statement. The country seems to be COVID-free as of now, but the battle against the pandemic will continue until there is a vaccine.
Like every other country today, the pandemic has caused drastic changes in the buying habits of the Kiwis. The immediate reaction to lockdown was rushing to supermarkets, pharmacies, and convenience stores to stock up on essentials. The pandemic is redefining the way people shop, the way they pay, and the things they buy, and probably for the long-term.
The demand for home deliveries, cashless transactions, and online purchasing of groceries has increased dramatically, adding to logistical pressure in the supply chain. People are also concerned about the quality of fresh foods, fruits, and vegetables, more than ever before, and are demanding more transparency in the food and groceries supply chain.
Supply chain enterprises must take cues from here, and prepare better for the future. Businesses must show agility by introducing omnichannel distribution services and paperless transactions to meet customer demands. Companies that can leverage technology to speed up deliveries, monitor quality and safety standards of goods in transit, and improve visibility in logistics will have a better chance of performing well post the pandemic.
E-commerce deliveries resume in Green and Orange Zones
The 733 districts in India are now divided into three zones - Red, Orange, and Green, based on the severity of the outbreak. There are 130 districts in the red zone, 284 districts in the orange zone, and 319 districts in the green zone.
Hotspot regions with the highest number of positive cases and with a high risk of the disease spreading further are categorized as Red zones. Green zones are districts with minimal confirmed cases till date or no confirmed cases in the last 21 days, whereas the Orange zones are the districts that are neither defined as 'green nor red zones' and are relatively safer compared to the Red zones.
The government has eased lockdown restrictions in Green and Orange zones, whereas Red zones will still remain under strict control. Air and train travel, metros and local trains, and inter-state movement of people are prohibited across the nation, except for medical and security purposes.
All activities, except the ones prohibited nationwide, are now open in Green zones, and buses can run at 50% capacity. In Orange zones, buses are still not allowed to run. However, taxis, autorickshaws, and cabs can operate with not more than two passengers.
At the same time, E-commerce home deliveries which were so far only allowed for essential items are gradually opening up. E-commerce companies are now allowed to restart the delivery of non-essential items in orange and green zones, needless to mention with utmost hygiene standard protocols. Red zones will continue the delivery of essential items only until further notice.
E-commerce players are seeing this as a positive sign of economic recovery. Although more than 50-60% of E-commerce sales come from metros and large cities, which are mostly in the Red zone, this gradual transition to business-as-usual is being welcomed by E-commerce players and retailers within the country.
As E-commerce home deliveries resume in Green and Orange zones, and people continue to place piled up orders of non-essential items, a strong logistics system is needed to cater to the high volume demands of customers. Currently, the majority of initial orders are being placed for electronics, phones, and kitchen appliances post the lockdown.
The problem, however, is that most E-commerce players have warehouse and fleet capacities in Tier 1 cities, from where goods are transported to Tier 2 and 3 cities. Since most Tier 1 cities, including Mumbai, Delhi, Kolkata, Hyderabad, Pune, Bengaluru, and Ahmedabad are under the Red zone now, E-commerce players will have to plan zone-based delivery routes smartly, in order to ensure on-time last-mile delivery to Green and Orange zone customers.
Companies that can leverage logistics technology for network optimization and adopt smarter dispatch practices such as the hub and spoke distribution model will have a better chance of achieving on-time deliveries and ensuring maximum customer satisfaction.
Locus now offers Zone-Based Delivery Planning tool to E-commerce enterprises for cost-effective and smart delivery planning in Green and Orange Zones during Lockdown 3.0. Get in touch with our logistics experts now.
Vietnam reopens after three weeks of lockdown - Things crawling back to normalcy
There have been no new cases of COVID-19 in Vietnam in the past one week, making it a low-risk region and allowing the government to ease the lockdown policy. Officials have stated that even though the country seems to be out of danger as of now, the transition will be gradual.
People are now allowed to return to offices and restart normal ways of living. However, fines will be imposed for not wearing masks in public and gathering in groups of over 20 members. Buses, taxis, and domestic flights will restart in the country, and schools will gradually reopen in some provinces as of now. Luxury or entertainment activities such as visits to malls, bars, zoos, and cinema theatres will still remain prohibited.
Vietnam’s efforts are being praised worldwide as a successful low-cost pandemic prevention model. The reason behind Vietnam’s exemplary response to COVID-19 is due to its strategic preparedness even before its first case was recorded. The Vietnamese government had canceled all international flights, sealed its borders, and imposed a mandatory 14-day quarantine for anyone who had entered the borders during the initial stages of the outbreak. Moreover, the country’s well-organized military and security services allowed them to keep a strict neighborhood watch to keep the spread of the disease under control.
Just like any other Southeast Asian nation, Vietnam too faced some obvious disruptions in its supply chain, exports, imports, international trade, and travel and tourism due to restrictions on cross-border movements. At the same time, there has been a surprisingly rapid growth of E-commerce since the outbreak as consumer buying trends have changed dramatically.
According to Vietnam Briefing, people have reduced their frequency of visits to supermarkets by 50%, and the online demand for essentials such as groceries, medicines, and food deliveries has shot up. Big C, one of the largest shopping centers in Vietnam, stated that its stores reported 3000 online orders in March, up by 1,000 from the previous month.
Traditional brick-and-mortar stores in Vietnam saw an underlying opportunity in this growing demand for online shopping. Food businesses too quickly remodeled their offerings and introduced fast and hygienic delivery of food packages. A number of small and medium retailers have stepped up by creating a presence online, extending safe home delivery services, and introducing hyperlocal delivery of essentials to meet the demands of locked down consumers. The COVID-19 outbreak has reinforced the fact that omnichannel is the way to go in order to remain competitive in the market.
Locus offers innovative tech solutions to enterprises in E-commerce, retail, food, and grocery delivery to ensure last-mile fulfillment at minimal costs. Get in touch with our experts to Schedule a demo
“Green Recovery” to combat coronavirus, says UN Secretary-General, to mark 50th International Earth Day
“We must act decisively to protect our planet from both the coronavirus and the existential threat of climate disruption. The current crisis is an unprecedented wake-up call. We need to turn the recovery into a real opportunity to do things right for the future,” he added.
The former Prime Minister of Portugal, who took over the top UN office in January 2017, also proposed six climate-related actions as the way forward. The proposals were centred around green jobs, sustainable growth, ‘grey to green’ economy and on incorporating climate risks and opportunities into the financial system and public policy.
“Public funds should be used to invest in the future, not the past, and flow to sustainable sectors and projects that help the environment and the climate. Fossil fuel subsidies must end and polluters must start paying for their pollution,” said the statement. “Greenhouse gases, just like viruses, do not respect national boundaries. On this Earth Day, please join me in demanding a healthy and resilient future for people and planet alike.”
How green logistics could play an important role in the near future?
A crucial component in combating climate change is green logistics. The need for sustainable logistics will only increase going forward as the COVID-19 pandemic has pushed logistics to the center of attention. The world is heavily dependent on logistics today.
For example, when the coronavirus was spreading in China, Cainiao, Alibaba’s green logistics arm, was at the forefront by delivering the necessary drugs and medical equipment to the needy in the most efficient and eco-friendly way.
Going forward companies will aggressively shift to more sustainable logistics by using eco-friendly and recycled packaging, optimizing routes using tech to reduce emissions and fuel consumption and also using electric transportation to manage their logistics operations.
Green logistics is catching up across the globe and implementing sustainable logistics strategies will be crucial in the days to come so as to reduce environmental impact.
Locus helps businesses across retail, food, grocery, and e-commerce manage supply chain operations efficiently with AI. Get in touch with our experts to Schedule a demo.
Indonesia declares COVID-19 as a ‘National Disaster’. Is a food crisis likely to follow?
As of April 16, the number of positive cases has crossed 5,516 in the country. Hotspot regions in the country including Jakarta; Bogor, Depok, Bekasi, Pekanbaru, Tangerang, and South Tangerang are under large-scale social restrictions.
The pandemic has impacted normal ways of living across the globe and slowed down the economy and supply chains in Indonesia just like any other ASEAN country. Around 1.6 million Indonesian workers have either been laid off or placed on unpaid leave since the outbreak began in the country. The government has imposed travel bans, intensified border control inspections and implemented nationwide lockdowns.
While lockdown policies and restricted movement within and outside the country is an effective measure to contain the spread of the disease, this economic crisis is posing a major threat to Indonesia’s food and nutrition security.
Currently, the Indonesian government has assured that there are over 1.6 million tonnes of rice secured in the Indonesian Bureau of Logistics’ warehouses all over the country and soon the harvest season will follow, adding another 5-7 million tonnes to the supply.
However, the country largely depends on Thailand, Argentina, Brazil, United States, and China for most of its other food supplies including staples such as sugar, wheat, beef, and soybeans. Restriction on cross-border movements is a matter of concern for Indonesia if Coronavirus continues to disrupt global supply chains for a longer time.
Moreover, officials are concerned that the Coronavirus panic buying behavior among people in exporting nations could cause a shortage of food supplies and a rise in food price inflation in Indonesia. Sugar, garlic and onion imports to the country have already been delayed due to the global emergency, causing prices to skyrocket.
The Indonesian government has initiated social assistance programs such as the Family Hope Program (PKH), conditional cash transfers for poor families, people with disabilities, and senior citizens; Direct Cash Assistance (BLT); the Groceries Card (Kartu Sembako), as well as the additional grocery assistance program in the Greater Jakarta Area.
However, the distribution of food and essential groceries is a major challenge. The urban areas have stronger food security compared to rural areas. Indonesia’s food supply chain is quite complex, given its uneven geographical terrain comprised of over 17,000 scattered islands. The COVID-19 outbreak has made it more complex as transportation and logistics have become a challenge, and distribution channels are obstructed.
While a number of measures are being taken to control the spread of the pandemic and to ensure food and nutrition sufficiency in the country, what it needs more than ever before is a strong logistics system to keep the essentials supply chain moving.
This is the time for companies in the food and grocery industry to step up and adopt faster and safer delivery methods, and leverage technology in logistics to ensure that the distribution of food and essentials to millions of Indonesian consumers is not hindered during the pandemic.
Locus helps businesses across retail, food, grocery, and e-commerce manage supply chain operations efficiently with AI. Get in touch with our experts to Schedule a demo.
America’s food supply chain standing strong amidst the Coronavirus crisis?
The virus has taken a serious toll on everyday life in the United States with millions under lockdown, bars, restaurants, and public places being forced to close, and restrictions on normal travel and transportation across the country. All the initial panic buying left supermarket shelves empty, leaving Americans worried about the shortage of food supplies during the quarantine.
However, despite the worsening outbreak, officials are confident that America’s food supply chain will remain intact and there will be no lack of food and grocery supplies even with the Coronavirus outbreak. Some of the biggest retailers and wholesalers have confirmed that there is no need to worry.
“Amid all of the other anxieties triggered by the coronavirus, there is no need to fear a lack of access to affordable and high-quality food. There are tens of thousands of food workers, lawmakers, and regulators committed to meeting the country’s needs,” said Steven Spinner, CEO and Chairman of United Natural Foods, America’s leading grocery, wholesale food and meat distributor.
The United States has vast stretches of fertile lands and produces most of the food it consumes. The country also accounts for large shares of the world’s export market for several staples; about 60% for corn, 40% for soybeans, 25% for wheat, and 70% for sorghum. However, moving the food from the country’s agricultural centers to its population centers and export hubs is a major challenge in this time of global crisis.
America’s food supply network is highly complex and relies on a complex web of interconnected infrastructure comprising of intricate waterways, railways, and roadways. For example, a lot of grain produced throughout the Midwest is transported to the Port of New Orleans for export. Transport of fresh produce and cold-storage products is done by refrigerated trucks and most of America’s grain produce is transported through railway links.
In order to ensure that food and essential groceries reach hundreds of millions of locked down consumers, there is huge pressure on supply chain and logistics enterprises to go the extra mile. The demand for front-line workers, drivers and delivery partners has risen substantially and so has the need to digitize supply chain operations.
With the Coronavirus outbreak intensifying in the United States, it is high time companies in the food supply chain switch to smarter technology such as network optimization and automated route planning to ensure smooth transport and delivery operations with minimized human intervention.
Locus helps enterprises in the supply chain digitize every element of logistics with AI-based tech solutions. Check out our recent white paper and get material insights on how to prepare your supply chain to fight COVID-19.
How India is dealing with essential deliveries amidst an unprecedented lockdown
This has meant that E-commerce players like Flipkart and Amazon and E-grocery players like BigBasket and Grofers have had to deal with supply chain uncertainties due to the lockdown. The companies are trying to work with the local authorities to get things back on track. Most of their deliveries have resumed in the top cities.
A few states in the country have now started issuing passes to the delivery executives so as to ensure that they can safely deliver items without facing any pressure from the authorities.
Amazon India recently put out a blog stating, “To serve our customers’ most urgent needs while also ensuring safety of our employees, we are temporarily prioritizing our available fulfilment and logistics capacity to serve products that are currently critical for our customers such as Household Staples, Packaged Food, Health Care, Hygiene, Personal safety and other high priority products. This also means that we have to temporarily stop taking orders and disable shipments for lower-priority products.”
The company also added that it would be reaching out to customers to give them a choice to cancel their lower-priority orders and get a refund. These measures came into effect from March 24, 2020.
On the other hand, FMCG giants have written to the government on Tuesday seeking an immediate exemption from movement restrictions, according to a report in The New Indian Express.
“Companies that supply meat, milk and household staples are struggling to redirect the sprawling food supply chain to meet the surge in demand after the government imposed a lockdown to bring the coronavirus pandemic under control,” said the report.
“Seeking immediate exemption from movement restrictions, companies including Britannia, Parle, PepsiCo, Hindustan Unilever, Dabur, Coca-Cola, ITC, Nestle and Mondelez have written to the government on Tuesday through three separate industry bodies,” the report added.
E-pharmacies too are in a spot of bother and are working with the relevant authorities to get things up and running.
The clampdown has sent the existing supply chains of companies across sectors into a tizzy. While the government and the companies are working to ensure that the operations are smooth, the end customers are facing uncertain delivery timings. Hopefully, the processes will become more streamlined soon.
During these demanding times, route planning and optimization are of utmost importance. E-commerce and E-grocery players are also implementing contactless deliveries and cashless transactions to ensure the safety of both the delivery executive and the customer.
Live tracking of ground personnel and smart geocoding will help now more than ever in ensuring the swift delivery of goods.
We, at Locus, have developed an exclusive COVID-19 Delivery Guide to help businesses in logistics and supply chain so as to ensure smooth operations during this tough time. Get your copy now!
Coronavirus could be the shot in the arm for E-commerce companies across the globe
A recent eMarketer report titled ‘Concerns May Boost Ecommerce as Consumers Avoid Stores’, which quoted a Coresight Research survey, said, “Shopping centers/malls were expected to be the most-avoided places, but more than half of respondents said they would also avoid shops in general.”
This sentiment is leading people to furiously click their mouse buttons to land on E-commerce sites and shop. Why go out, when you can things delivered at your doorstep? And E-tailers and e-grocers have been quick to latch on to this.
Internet behemoth Amazon is blocking all shipments of nonessential products to its warehouse as it is seeing a significant increase in essentials orders due to the spread of the coronavirus, according to a Business Insider report.
The report said, “Amazon said in an email to sellers that it was now prioritizing shipment in the following six categories: baby product; health and household (including personal-care appliances); beauty and personal care; grocery; industrial and scientific; pet supplies.”
If Amazon is riding on the wave to make sure it has all the essentials stocked up, things are no different in India. According to a news report on CNBC TV18, “E-tailing platforms have seen a 15-20 percent spike in gross merchandise value (GMV) in the first 15 days of March compared to February, and a massive 50 percent growth in GMV in categories such as grocery, health and wellness, according to internet-focussed consulting firm Redseer.”
All this frenzied activity means that a huge strain is being put on the E-commerce firms’ supply chain thereby resulting in shipment delays, technical problems, and also labor shortages.
In a recent official blog post, Amazon has said that it is opening 100,000 new full and part-time positions across the U.S. in its fulfillment centers and delivery network to meet the surge in demand.
Amazon will also be paying an additional $2 USD per hour through April. This is on top of its present $15/hour. It is also adding C$2 in Canada, £2 per hour in the UK, and approximately €2 per hour in many EU countries. This move takes its investment to over $350 million in increased compensation for hourly employees across the U.S., Europe, and Canada.
An Amazon India blog also recently highlighted the increasing footfalls it is getting on its site, thanks to Covid-19. “As COVID-19 has spread, we've recently seen an increase in people shopping online. In the short term, this is having an impact on how we serve our customers. In particular, you will notice that we are currently out of stock on some popular brands and items, especially in household staples categories. You will also notice that some of our delivery promises are longer than usual. We are working around the clock with our selling partners to ensure availability on all of our products, and bring on additional capacity to deliver all of your orders.”
The CNBC TV18 report also added, “The spike in demand has led to staffing firms such as TeamLease getting increasing requests from ecommerce companies to provide manpower.”
Logistics has now become more important than ever for E-commerce firms. In these testing times, logistics can make or break customer satisfaction.
With increased demand, these firms will have to use the right technology to enable same-day and slot-based delivery for important essentials. The right tech platform can help in seamless route planning and optimization. It can also help with an optimal fleet mix to match the increased demand, while keeping in mind traffic, route restrictions, etc. One can also intelligently club orders based on properties such as preferred delivery time slots, priority orders, location preference, and order specifications. More importantly, it is now crucial to keep a close track on data so as to glean insights and quickly make changes, if necessary.
This is indeed the time for both E-commerce and logistics firms to step up and be counted during these uncertain times.
Locus helps you deliver a delightful last-mile customer experience by helping achieve on-time deliveries for your customers and better SLA adherence. You can also reduce overhead costs and increase delivery efficiency with automated shipment sorting and optimized route planning. Try it now!
Industrial and Logistics leasing in India hits an all-time high of 33 million sq.ft
3PL firms cornered almost half of the leasing activities in 2019, up from 36% in 2018 to 48% in 2019. 3PL was followed by E-commerce players (18%), retail firms (11%), engineering and manufacturing (8%), and electronics & electricals companies (4%).
The report said, “Similar to 3PL firms, leading e-commerce players Flipkart, Grofers and BigBasket also leased space across multiple cities, thereby boosting transaction activity of the sector during 2019.”
As expected, the I&L space take-up in 2019 was dominated by small-sized transactions (less than 50,000 sq ft) which held a share of about 42%. The share of medium-sized transactions (50,000 sq ft to 100,000 sq ft) rose from 26% in 2018 to 30% in 2019. The large-sized deals (above 100,000 sq ft) accounted for 28%. NCR, Mumbai, and Bangalore, in that order, dominated the large-sized deals.
Supply addition in 2019 crossed 19 million sq ft, rising by about 78% compared to 2018. About 70% of this supply was reported in NCR, Mumbai, and Chennai. In H2 2019, nearly 8 million sq ft was completed, mainly in NCR, Chennai, and Bangalore, adds the report.
The supply-led I&L leasing in 2020 will still be led by 3PL firms and E-commerce players, along with retail corporates.
These are interesting times as E-commerce players themselves are looking to operate delivery services rather than depending on 3PL partners. With an increasing demand for same-day and slot-based E-commerce deliveries, it makes long term sense for E-commerce players to invest in homegrown resources, thereby giving them better control and visibility.
Another growing trend in this space is the need for cold storage spaces and cloud kitchens. With the proliferation of E-grocers and food tech players, this trend will only increase in the coming years.
With warehousing becoming a strategic operation for online players, supply chain network optimization is the need of the hour. Can you plan where exactly your next warehouse should be, based on your present demand and future projections? Should your warehouse be in the center of the city or in the periphery? Locus’ Supply Chain Consulting helps you do just that.
Companies are also increasingly becoming environmentally conscious, and are looking to do route optimization to save distance and fuel, and are also adopting green logistics practices to do their bit. Locus Dispatcher does algorithm-based dynamic route planning and Locus MotionTrack helps with real-time tracking, insights, and analytics.
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India’s Food Delivery Market about to get Amazoned
Amazon is now gearing to enter the market in India and is planning to pilot in some urban areas in Bangalore, according to recent reports.
Amazon is planning to provide the offering as a part of Amazon Fresh or Prime Now. The platform will be open only to its employees during the trial period and the food delivery option will be available in the Amazon app. After testing waters in Bangalore, Amazon’s food delivery service is expected to be launched in other parts of India as well.
India’s food delivery market is now picking up pace and offers lucrative growth opportunities. At least 61% of restaurants in Delhi, Pune, Hyderabad, Bangalore, and Mumbai offer delivery options, and more than 60% of restaurants have partnered with multiple online platforms to facilitate home delivery.
The E-commerce giant has been planning this venture for months and was working on partnering with restaurants in Bangalore with attractive commission rates. While Amazon’s entry to the food delivery market poses a threat to other platforms that charge restaurants a commission between 10 to 30 percent per order, it opens up more options for the ever-demanding urban customers.
World over, Amazon has been experimenting with new offerings. Amazon Pantry, where customers can order anything from bread, jam, to tissues to even a box of fruits, was recently started in the US. Amazon Prime, has more users than ever, across the globe.
This move into India’s hotly contested food delivery space is being viewed as a part of an umbrella plan to build a product portfolio that will cover everything from food, electronics, and grocery, among others, and enable its Prime members to get the best of the products, all on one platform. To put it in business terms, this will ensure that their Prime members become repeat customers and will never have to leave Amazon for any high-value or daily need products.
India’s homegrown startups Swiggy and Zomato are not far behind either. Both Swiggy and Zomato are heavily investing in Cloud kitchens and are coming up with new offerings like Swiggy Go, an instant package pick up and drop service.
However, its conception stage, many Bangalore-based restaurateurs had concerns regarding Amazon’s delivery terms and conditions. Despite the lower take rate, Amazon’s platform does not cover the cost of delivery, which is an added cost for restaurant owners, Inc24 had reported in September 2019. Some restaurateurs were also not convinced by Amazon’s user dashboard for tracking order histories.
In order to cut through the bar that Swiggy and Zomato have already set in the food delivery space, Amazon will have to step up its delivery processes, offer interactive dashboards and features like real-time order tracking. Fine logistics will be the true differentiator in the food delivery game and it will be interesting to see how Amazon’s food delivery service unfolds.
Locus offers end-to-end logistics optimization solutions to businesses in the hyperlocal delivery sector. Check out how we helped BigBasket achieve 99.5% SLA adherence with smart routing solutions.
Coronavirus could damage global economic growth says IMF
The IMF’s managing director is of the view that the full impact of the virus can be ascertained only when it is contained.
The virus, which has killed around 2,000 people, has already made a dent in the business world.
The Hubei province in China, where Wuhan, the epicenter, is located is often called the ‘optics valley’ and houses firms that make components for smartphones and telecoms. According to reports, around 10% of the global smartphone shipments could get impacted. Wuhan’s workforce is a crucial part of the global supply chain for sectors like fashion, pharma, auto, and electronics, among others.
From smartphone manufacturer Apple to car manufacturers like Hyundai and Nissan, the virus’ spread has impacted all their operations. A number of airlines have canceled flights to and from China. If all of this isn’t enough bad news, tourism has dropped too.
To make matters worse, a lot of Chinese factories haven’t opened shops yet, after the Lunar New Year celebrations, thereby leading to a lot of disruption in normal activity.
While ripples are being felt the world over, there really isn’t a number that economists can put on the business impact of Coronavirus. According to Kristalina, during the SARS (Severe Acute Respiratory Syndrome) outbreak in 2002, China’s economy was around 8% of the global economy, but now, it is 19%. This means the business impact of covid-19 could potentially be more severe.
With the situation being very uncertain, businesses world over are concerned about the impact it could cause in their operations and thereby their bottom line. There are also concerns that this could potentially lead to shut down of assembly and supply chain lines across the world due to a lack of China-made components.
All the delay and uncertainty in different sectors have translated to a drop in transportation and logistics too. With supply chains being affected, a lot of last-mile delivery challenges are bound to happen. The reach of the virus is now far and wide, across sectors and countries.
While the world is reeling under the impact of Coronavirus, all one can do is wait and hope that it is contained soon. According to some experts, the lost sales could potentially be made up once the outbreak is contained. Will it also mean a renewed vigor in logistics once the virus is contained? There is no answer, really. All of this is mere speculation. In this interconnected global world, it really is hard to predict effects accurately.
But, one thing is certain, the covid-19 virus will certainly impact businesses around the world. We can only hope for a scenario that isn’t very bleak.
Locus helps companies manage their supply chains by using artificial intelligence. Locus’ solutions help reduce costs by increasing efficiency, transparency, and consistency in operations. Visit www.locus.sh to know more.
Alibaba offers a helping hand to combat Coronavirus in China with Green Logistics
Meanwhile, Alibaba, China’s leading e-commerce player, has stepped up to fight the deadly epidemic with green logistics. The company has launched an e-commerce platform to connect medical suppliers worldwide with thousands of Coronavirus victims in China. This special B2B platform will source medical supplies from retailers worldwide and provide the supplies to organizations working towards treating the disease.
Alibaba’s green logistics arm, Cainiao, is ensuring that the necessary drugs and medical equipment are shipped to the needy in the most efficient and eco-friendly way. So far, Cainiao has more than 150 suppliers and has delivered medical supplies from over 15 countries in 18 hospitals across the country.
‘Green Logistics 2020’ is Alibaba’s green e-commerce initiative that aims to implement eco-friendly practices of material recycling, green packaging, effective route planning, and delivery methods throughout its global supply chain. This is a joint mission across several entities within the Alibaba Group, including its online retail stores Tmall, Taobao, Xianyu, as well as its on-demand food delivery site Ele.me.
The demand for sustainable logistics is only increasing and it is pushing supply chains worldwide to embrace similar ways of doing business. While sustainable development has been a focus for corporates in developed nations, there has been a significant shift towards eco-friendly business practices, especially green logistics in developing countries across Asia
Companies are taking effective measures in this regard; such as using eco-friendly packaging materials that can be reused and recycled, choosing vehicles that have low carbon emissions, load optimization to ensure efficient vehicle utilization for shipments and route optimization in order to save travel costs by taking the shortest routes, thereby reducing fuel consumption significantly.
The importance of eco-friendly practices in modern-day supply chains cannot be overlooked. Logistics operations hugely impact the environment in several ways. Implementing sustainable transport and logistics strategies can reduce the environmental impact caused by logistics activities including transportation, warehousing, inventory management, packaging, raw materials handling and forward and reverse shipment services.
2020 and the years to come will see more Asian companies in retail, e-commerce, 3PL and distributor services embrace green logistics. In fact, green logistics might become a key differentiator for enterprises in Asia’s supply chain in the near future.
The food delivery market battle in India set to intensify with Zomato’s acquisition of UberEats
What does Zomato really get from this deal?
Zomato will acquire all of Uber’s delivery partners, business deals and more importantly, UberEats’ customers and their order data. The UberEats app will redirect its users to Zomato for the next six months.
“We have acquired Uber Eats India and with this development, we are the undisputed market leaders in the food delivery category in India,” claimed Deepinder Goyal, CEO, Zomato, on the company’s blog.
According to various news reports, these platforms deliver around a million orders daily. And out of these million orders, a sizable chunk comes from the non-metro cities. This is a significant development for these players as the ‘non-metro’ market has so far been nascent and largely untapped and they have put in a lot of marketing and promotional efforts to gain a foothold.
A recent report titled 'Demystifying the Online Food Consumer’ by the Boston Consulting Group (BCG) and Google highlights the massive growth that this industry has witnessed.
The report says, “Macro trends such as rising internet penetration, increasing ordering frequency, favorable consumer disposition, expanding reach in smaller tiers and expanding network of restaurants on Food Tech platforms pan India, continue to drive momentum in the industry. As a consequence, reach of food tech aggregators has grown six times from 2017 to 2019.”
The report also adds, “Riding on the wave of higher consumption in a growing market and maturing dynamics on the supply side, we expect the industry to grow from $4 Bn to $8 Bn in next three years, a massive 25% growth rate.”
The report lays down a potential path ahead for the food tech space. It believes that these players will diversify into several new offerings by leveraging their customer base, delivery and service expertise.
And that is what is exactly happening in this sector. The food delivery companies have already come up with cloud kitchens and are experimenting with new offerings like Swiggy Go, an instant package pick up and drop service.
Swiggy Go directly competes with Google-backed hyperlocal concierge app Dunzo. The idea behind Swiggy’s venture into concierge service is to use the same food delivery fleet to also fulfill pickup and drop service requests and thereby increase the delivery fleet’s ROI and efficiency.
All this melange of activities in the food delivery sector means significant opportunities for allied sectors like logistics. It is amply clear that restaurant discovery will no longer be the only major competitive advantage. What will really matter is the logistics play of these companies.
Better delivery speeds lead to higher customer satisfaction and higher customer satisfaction translates to the stickiness of the app. According to research firm RedSeer’s Food-Tech Market Updates, “Deliveries fulfilled by restaurants have lower delivery compliance as compared to those fulfilled by own fleet/3PL partner.” At the end of the day, customer experience will become a key differentiator.
Adopting smart tech in logistics and implementing artificial intelligence could help in pushing the customer satisfaction levels in this highly competitive food delivery market.
Reliance now set to disrupt Indian E-commerce
With JioMart, Reliance will cater to the diverse needs of a modern-day Indian shopper, whose cart includes household items like stationery and home utility products beyond just groceries. The online supermarket offers a portfolio of over 50,000 products along with free home delivery, no minimum order value, no questions asked on return, and express delivery promise.
The company has also offered its Jio users to register to JioMart and avail preliminary discounts during the launch period. Mukesh Ambani had hinted the establishment of ‘New Commerce’ at RIL’s 42nd Annual General Meeting, stating significant selling margins for participating merchants. This has opened doors for small-scale brick-and-mortar stores to expand their retail businesses online.
Instead of the traditional warehousing model, Reliance is building an Online-to-Offline business model where it will source orders from the nearest retail stores and deliver it to customers. Reliance aims to connect 30 million offline retailers, with over 20 crore households in the country through this venture.
As it expands to other cities, the company could also potentially partner with local transporters and distributors for efficient last-mile delivery. Reliance is one of the first companies to start working with offline retail stores towards online expansion. The company has set the bar high with Jio and consumers certainly have higher hopes from JioMart for improved e-commerce last-mile delivery.
Will Reliance do to e-commerce what it did to telecom? This hyper-local online supermarket model could set a benchmark for other players in the industry and could potentially disrupt the Indian FMCG supply chain dramatically. JioMart could possibly change the face of e-commerce in India, by making next-day and same-day express deliveries easily affordable for the Indian commoner.
In order to keep up with the trend of same-day and express deliveries, other players in the industry will have to revisit their long-term business strategies. Adopting smart tech in logistics and implementing Artificial Intelligence in the hyperlocal supply chain could save the day for enterprises to sustain the potential threat posed by Reliance’s New Commerce venture, JioMart.
Locus helps enterprises in the hyperlocal market optimize supply chain operations with smart logistics solutions. Check out how we helped BigBasket gain up to 99.5% on-time delivery.
High logistics costs curb eCommerce growth in India
The report which focuses on the key challenges faced by e-commerce companies in South Asia, states that high logistics costs, poor logistics infrastructure, and digital regulations are the primary concerns for e-commerce companies in the region. In a developing economy like India, logistics challenges are pretty obvious.
In the recent past, there has been a sudden rise in tier 2 and tier 3 cities in India, which are high potential markets for e-commerce companies. However, the problem is accessibility to these cities as they are connected with poor rail and roadways. The delivery networks are mostly unorganized, fragmented and chaotic.
Another major problem is the slow adoption of tech-driven logistics solutions by small and medium e-commerce enterprises. It leads to the under-utilization of ground resources such as drivers and delivery agents and inefficiencies in operations. To add to it, last-mile deliveries are becoming highly complex with hyperlocal and next/same-day delivery expectations of customers.
With the help of new-age tech solutions in AI and automation, e-commerce companies can optimize delivery networks, plan dispatches smartly, track shipments as they move and ensure a better last-mile experience to the end customer while reducing operating costs significantly.
Technology is the true game-changer for e-commerce companies to rise above the heat of the competition from multinational giants such as Amazon and fight off deep-rooted logistics problems effectively.
Locus helps e-commerce companies achieve business goals efficiently with proprietary logistics solutions. Visit www.locus.sh to know more.
Indonesian retailers must now seek a permit to sell online
In 2019, almost 93% Indonesians reported to have searched for a product or service online, and 86% reported to have shopped online, while 76% of these online purchases were made using mobile devices. A number of factors have contributed to this rapid growth of e-commerce in Indonesia.
The country’s dynamic digital ecosystem, availability of low-cost mobile phones and widespread internet penetration among consumers have led to a significant shift in consumers’ preference towards online buying and encouraged the establishment of plenty of e-commerce platforms in Indonesia. Shopee, Lazada, Bukalapak, and Tokopedia are some of the leading e-commerce players in Indonesia.
Despite such growing popularity of e-commerce among consumers and sellers, the Indonesian government has recently introduced a law that requires all vendors to obtain government permits to sell goods/services online. The law also mandates online marketplaces to store information in local data centers and e-commerce domain names to reflect Indonesia.
However, the new law has not been welcomed warmly by Indonesia’s e-commerce players, who believe that the regulation could highly impact the country’s e-commerce landscape and might create barriers for small businesses to expand online. Seeking a mandatory permit would also mean lengthy procedures and fees, indicating a shift of small and medium e-commerce sellers to alternative platforms like Facebook and Instagram, which are not monitored by the law.
Although the regulation is facing resistance from online vendors currently, the Indonesian government officials assured that this regulation is intended to protect the interests of the millions of Indonesian consumers and businesses. Indonesia’s exploding e-commerce market clearly needs regulations like this to bring about orderliness, transparency, and stability in the long-term growth of the industry.
Vietnam tops the chart of the world’s fastest-growing economies
The primary factor contributing to this massive leap in Vietnam’s economic growth is the amount of Foreign Direct Investment coming in from investors around the world, especially the Republic of Korea, Japan, and Singapore. Almost 68% of the total FDI capital was invested in the manufacturing industry and 10.4% in real estate.
Although industries like electronics, food processing, fashion, real estate, and manufacturing dominate the Vietnamese market, tourism plays a significant role in the economy attracting nearly 6.8 million visitors yearly from different countries around the world, making Vietnam the most favorable tourist destination in South East Asia.
Another driving force behind Vietnam’s growing investment popularity is the country’s collection of free trade agreements (FTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with Canada and the EU-Vietnam FTA with European countries.
However, a major challenge encountered by the region is its high logistics costs owing to under-developed transport infrastructure and inadequate logistics facilities. Higher logistics costs tend to bring down the profitability of import, export, transportation and delivery services within the country. This implies a higher demand for cost-effective and efficient logistics services in Vietnam
AI-enabled solutions are optimizing supply chains of virtually every industry to cut logistics cost and save time. Geocoding algorithms, AI-based forward and reverse logistics solutions, automated vehicle allocation, shipment sorting, etc. are some breakthrough technologies that are transforming supply chains across South East Asia and it’s about time companies in Vietnam switch to AI-driven logistics for greater efficiencies.
Locus provides intelligent logistics automation solutions and expert consulting to bring efficiency, transparency, and consistency in the supply chain. Check out how network optimization can help scale up logistics performance in South East Asia.
Milk Delivery startups struggling to grow?
The hyperlocal delivery system caters to a limited geographical area with quick delivery of goods as per customer requirements within a short duration of time. Several start-ups have sprung up to meet the dynamic daily demands of the consumer, promising express delivery of orders and quick services at the doorstep.
India is a country that runs on tea and coffee, and hence milk becomes one of the most essential everyday items for almost every Indian household. A number of milk delivery start-ups have also come up in the urban sectors, delivering milk, bread, eggs, and other daily consumables in the busy morning hours.
However, these milk delivery start-ups seem to be struggling to scale up and expand operations due to limited funding. The market is expected to undergo some consolidation in the coming months, owing to poor economics, complex supply chain, and profitability issues, reports ET. External funding is a major challenge, due to which these start-ups are looking for merger opportunities with bigger players or limiting their operations to bring efficiency in the supply chain.
Bengaluru-based milktech startup Doodhwala recently discontinued its operations, selling its business to FreshToHome. Another start-up, Milkbasket is expected to scale down operations and limiting its products to bring down operating costs and improve efficiency in the supply chain. Milkbasket currently delivers milk, bread, eggs, butter, juices, and other daily needs. DailyNinja, another early morning milk delivery service, is looking for a merger with BigBasket.
Startups engaged in the milk delivery business execute as many as 80,000-90,000 orders a day, signifying their need and popularity. However, these companies need a solid strategy for survival and growth. Partnering with tech innovators to bring efficiency in logistics and supply chain operations can help reduce costs and improve performance dramatically.
Locus helps businesses in e-Commerce and hyperlocal delivery optimize logistics with AI-driven solutions, bringing efficiency, transparency, and consistency in the supply chain. Check out how we helped BigBasket optimize route planning and achieve 99.5% on-time delivery.
Will E-Commerce shake hands with small retailers and Kirana stores?
Furthermore, smartphone usage and internet penetration in India’s semi-urban and rural areas have largely influenced the buying behaviors of consumers, boosting e-Commerce sales remarkably all over the country. Online shopping offers customers numerous choices at competitive prices across a wide array of products, and the convenience to shop anything, at any time and from anywhere with just a few clicks on their computers, tablets, or mobile phones.
India’s E-Commerce growth threat to traditional retail stores?
While it has spoiled the Indian customer for choice, the tremendous growth of e-Commerce is a major threat to traditional mom and pop stores. Many retail enterprises are stepping up by opening online stores and adopting tech solutions to offer e-payment options, quicker deliveries, and better customer experiences. However, small-scale brick-and-mortar stores with limited capitals and infrastructure accessibilities are struggling to keep up.
The participation of niche industries like FMCG in online trading is choking a large number of small Kirana shops and retail outlets to death, owing to tremendous online discounting and significant loss of business.
Government urges E-Commerce enterprises to team up with small retailers
The Department for Promotion of Industry and Internal Trade (DPIIT) has approached e-commerce companies asking them to send plans to work with small retailers, indicating that a policy may be implemented in this interest. With this initiative, the government is trying to address the concerns of India’s unorganized retail industry.
Cooperation from e-tail businesses will help the government in creating a standard framework empowering small retailers to catch up to the rapidly growing e-commerce sector. Such collaborations will also strengthen India’s e-commerce landscape in the years to come. Fulfillment companies in 3PL sector, tech logistics, inventory management, customer support, etc. will also play a major role in putting the two pieces together.
Locus is working towards this vision in association with one of India’s leading fashion e-commerce players. The company was seeking greater last-mile efficiencies, especially in locations where several packages are delivered on a daily basis.
Locus devised a business model that involves local retail stores that offer home delivery services in dropping off the company’s packages to neighboring areas. Partnering with such local Kirana stores in heavy density areas helps save a significant amount of time and effort otherwise taken by delivery agents in finding correct addresses.
Will e-commerce team up with small retailers and Kirana stores making room for mutual growth? Let us wait and watch! However, e-commerce giants like Flipkart, Amazon, Zomato, and Swiggy haven’t yet responded to DPIIT’s query.
We at Locus are looking to work with E-Commerce companies to drive synergies across the retail ecosystem in India by bringing e-commerce companies and retail stores together, and would be happy to participate in this discussion.