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The global retail industry is going through a phase of phenomenal transition. Fast-paced lifestyles, easy access to technology and apps, and changing customer behaviors have birthed a new era of convenience-driven retail.
While e-commerce was steadily gaining momentum over the years and becoming popular among millennials and mobile-savvy consumers, the onset of a global pandemic has made online shopping and home deliveries of not just non-essentials, but also everyday commodities mainstream.
The current norms of work-from-home, social distancing and contactless shopping have given a big boost to e-retailing and B2B e-commerce. From groceries, to milk, vegetables and fruits, meal-kit delivery, restaurant foods, and electronics to apparels, e-commerce has taken over every possible category of retailing. To keep up with the e-commerce trends, sellers are building online presence, and brands are pushing themselves to offer multi-channel shopping experiences to customers.
The global e-commerce market is expected to total $4.89 trillion in 2021, and is expected to further grow in the coming years. Clearly, e-commerce is the new face of retail. And, needless to say, logistics is a crucial differentiating factor among brands.
Read on to learn more about the growing importance of efficient logistics in e-commerce and how implementing AI in your logistics can take your business to greater heights.
The global e-commerce market is expected to total
Logistics is at the heart of the e-commerce industry, and pretty much every stage in the e-commerce supply chain involves logistics in some form or another.
Whether you’re starting out or already an established player, it is important to understand how goods are moving through your supply chain and the role of logistics in the success of your business.
So, here’s how the e-commerce supply chain functions.
Goods are produced in the company manufacturing units. From factories, finished goods are moved to distribution centers/warehouses to be stored. Customer places an order via e-commerce web-stores or mobile applications, after browsing through a list of products and brands.
From the warehouse, the order is packed and dispatched to the customer’s nearest fulfillment center. In an omnichannel distribution scenario, this local fulfillment center could either be a dark store, retail outlet, micro-fulfillment center or a pick-up locker, depending on the brand’s omnichannel strategy or the customer’s preference.
From the local fulfillment center, the order is finally delivered by an agent either to the customer’s doorstep or a predefined pick-up spot. In some cases, like a Buy Online, Pick-up In-store, or pick-up locker option, customers pick up the orders on their own as per their convenience.
From manufacturing to sourcing, warehousing, secondary distribution, and last-mile delivery, the e-commerce supply chain is all about logistics. With growing competition in the e-commerce space, and the ever-increasing customer expectations of same-day delivery, next-day and few-hour deliveries, fast and efficient logistics is more important than ever.
Logistics plays a crucial role in enabling the movement of goods within the supply chain, and ensuring that every order reaches its intended customer at the right place at the right time. For decades, supply chains have relied on conventional logistics planning and management. But today’s e-commerce supply chain is uncertain, complex, and dynamic in nature, which is why logistics optimization has become a key focus area for enterprises to stand out in the market.
Sreshtha Das
Read Story >Mrinalini Khattar
Read Story >Mrinalini Khattar
Read Story >Lakshmi D
Read Story >Today, running an e-commerce business is not just about offering goods for sale online, accepting digital payments and delivering merchandise to people’s homes. It is about speed, efficient handling of orders, and offering convenient and customer-preferred delivery services—all at an affordable cost. Especially since the COVID-19 crisis has occurred, the demand for fast, hygienic and contactless deliveries has surged significantly, pushing brands to level up their last mile game.
Several innovative and cost-effective last-mile distribution strategies like hub-and-spoke distribution, micro-fulfillment distribution centers, dark store fulfillment, Direct-to-Store deliveries, BOPIS, curbside deliveries, and pick-up locker deliveries have surfaced in recent times. These trends will certainly drive post-pandemic e-commerce strategies for businesses. Meanwhile, many top e-commerce brands have boosted their last-mile fulfillment methods with efficient logistics being their key focus.
Retail giants Target and Walmart have announced new investments in last-mile delivery technologies, highlighting the growing importance of fulfillment in the post-COVID environment. Target is testing out a new localized delivery system via a pair-up of its new sortation center to speed up its last-mile order sorting processes.
Walmart on the other hand is piloting autonomous delivery vehicles, enabling super-express same-day deliveries to consumers.
Owing to speedier same day delivery requests during the pandemic, Amazon too, installed “mini-fulfillment centers” closer to where customers live in select U.S. markets to reduce its same-day delivery times down to just a few hours.
Indian food and grocery delivery brand Swiggy has embraced the dark store fulfilment model to enable delivery of over 2,500 grocery and household items within 45 minutes via dark stores that do not have walk-in locations but exist only in apps.
is testing out a new localized delivery system via a pair-up of its new sortation center to speed up its last-mile order sorting processes.
is piloting autonomous delivery vehicles, enabling super-express same day deliveries to consumers.
installed “mini-fulfillment centers” closer to where customers live in select U.S. markets to reduce its same-day delivery times down to just a few hours.
has embraced the dark store fulfilment model to enable delivery of over 2,500 grocery and household items within 45 minutes via dark stores that do not have walk-in locations but exist only in apps.
While e-commerce players have certainly started emphasizing on optimal logistics to fulfill customer expectations, they are often faced with some real-world logistical challenges that must be addressed to achieve efficiency, transparency and consistency in the e-commerce supply chain.
Brands that rely on traditional demand planning models often struggle with inaccurate forecasting, as they do not consider seasonal market trends, competitor analysis, popular market offers, and other variables. Due to ineffective demand planning, inventory management goes haywire, leading to over-stocking and under-stocking of goods in warehouses, adding to the company’s operating expenses.
Many brands still operate on long-standing supply and distribution networks, that may not be optimal given the uncertainties and supply chain disruptions brought in by the pandemic. To enable smooth flow of goods through the supply chain, brands must rethink their distribution networks, and place supply chain nodes at the right spots.
The trickiest part of the e-commerce supply chain is the last mile of deliveries, as it is the customer-facing end of the supply chain. On-ground constraints such as traffic and weather fluctuations, inability to map addresses properly, and ineffective route planning cause unnecessary delays in final-mile deliveries, leading to SLA breaches and poor customer satisfaction.
E-commerce businesses deal with the distribution and delivery of multiple product categories on a daily basis. Due to improper planning, brands fail to utilize their fleet capacities effectively. Allocating delivery duties to riders and on-ground staff fairly and on-time is also a common problem faced by e-commerce businesses, especially during peak seasons.
In the e-commerce supply chain, real-time visibility is vital to manage on-ground operations effectively and build trust among customers. Without live visibility tools and field data, logistics managers fail to keep a tab on ongoing operations and are not able to share real-time order updates with customers.
Artificial Intelligence is turning around supply chains across the globe, and e-commerce is not an exception. Locus offers smart solutions to streamline the e-commerce supply chain, enabling faster deliveries, on-ground efficiencies and improved decision making.
Shweta is a seasoned business author and writes about logistics, supply chain management, and SaaS technologies. She occasionally writes on Quora and loves to take on baking experiments in her free time.
With E-commerce becoming more complex, thanks to increasing customer demands, it is imperative to increase operational efficiencies across all miles.
read storyRunning an e-commerce business is all about offering convenience and keeping the promise of speedy deliveries. Now optimize your e-commerce supply chain with AI-powered logistics solutions by Locus.
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