The Logistics of E-Commerce

Over the last decade, E-commerce has gone through an explosion in popularity thanks to the internet’s vast potential to connect people, places, and things. It’s being seen as a pillar of our economy that is growing faster than anybody expected. Sales for E-commerce are projected to reach $550 billion by the end of this year, an 80% increase from 2010.

What does this mean for logistics companies and retailers alike?

As this market continues to grow with no signs of slowing down, the effects will be felt across the board. Retailers will need to expand their distribution networks, relying on their use of 3PL partners. These new agreements will reach beyond just leveraging logistics companies more, but will also drive the need for fulfillment centers closer to the products ultimate destination.

If your distribution model is still based on the “traditional” consumer, you may be in trouble. E-commerce customers have different expectations from brick and mortar shoppers. They expect with one click, to receive their products in 3-5 days usually with free freight. These expectations require creating new processes for how the supply chain operates and the ability to adapt as these processes evolve.

Consumers today have the power to affect the way retailers and logistics companies fulfill orders. Same-day delivery, which seemed out of the question a few years ago, is becoming the norm thanks to services like Amazon Prime. Also, real-time package tracking is requiring new technologies. Because at these higher consumer expectations, retailers must streamline their processes to meet what the consumer’s view as entry-level features.

How can you meet demands?

One way to meet e-commerce demands is to enable your warehouse operations to expand and contract based on volume requirements. Monitoring the lifecycle of a warehouse order is also critical. Once the order is fulfilled and shipped, consumers will be expecting a tracking number, so they know when to expect their shipment. While all of this all sounds straightforward, without the proper warehouse systems in place, it becomes a massive, time-consuming data collection effort.

Another way is through investments in technological advances. Many of the cutting-edge technologies have made meeting consumer demands more manageable. What new technology is your company considering?

Making sure your supply chain is configured to handle increased return volume is another key part of managing e-commerce demands. Customers are returning items directly to distributors and are doing it at a higher rate thanks to new services such as the monthly subscription boxes.

With the demand for speed and convenience at an all-time high, the ability to streamline and speed up order fulfillment will be key to a retailer’s success. Retailers that have the ability to fulfill these orders through partnerships with special 3PL (third-party logistics) companies will have a huge advantage over the competition in the coming year.

 

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