Jun
The Importance of a Strong eCommerce Logistics Strategy
Research is predicting that B2B organizations that do not embrace the latest digital technology and the eCommerce megatrend could lose nearly half of all future revenue over the next five years.
Manufacturers and distributors alike are going to find themselves facing momentous technological changes that will impact everything they do — from being able to challenge and win business from the competitors they face (and have yet to face) to consistently meeting customer expectations, the ability to streamline and automate operations (especially logistics) has never been more paramount to business viability.
In order to sustain a business and truly differentiate a value proposition in what is now a very dynamic operating environment, eCommerce logistics and omnichannel strategies have become a must-have in your logistics discipline and skillsets.
Research shows that 86% of American shoppers use a minimum of two channels and are spending up to 11 hours a day engaging with electronic media. Your business must have a strategy to target this flourishing market if business growth is one of your top priorities. In the United States alone, eCommerce grew 14.2% in 2018 reaching almost $520 billion, making the U.S. the third largest and most advanced eCommerce marketplace in the world. Your logistics operation needs to be positioned to provide the ultimate customer experience, shipping needs, reporting metrics, and much more.
Using Predictive Analytics for Insights and Adaptability
In order to capitalize and maximize the opportunities available, it will be critical that you have provided your internal talent with the right partners — specifically partners that can help you take advantage of predictive analytics (ranked as the top technology to be implemented in warehouse operations). Best-in-class B2B firms have initiated the use of business intelligence and analytics to satisfy customers who not only demand a high level of quality delivery but also predictive analytics in how their business is performing as well. These tools will help you accomplish the following:
- Better predict future demand and requirements to establish a baseline
- Help better manage inventory and incoming orders
- Spot positive trends and potential problems for order status details
- Anticipate future workloads and estimate peak season task management
- Manage resources to help with profitability, such as transportation spend, accessorial charges, and shipping times
In addition, this will help with the ability to view and analyze the data flowing through a warehouse’s supply chain, especially in real-time, and can help save a significant amount of money. In fact, with the right technologies and processes in place, it’s possible to save up to 25% on operational costs by improving decisions such as the optimal selection of inventory placement and transportation modes.
With demand for analytical data, insights, and forecasts continuing to surge, so will the desire to use this data to save on operational costs. In fact, some warehouses are already using solutions like rate shopping to save on labor and shipping costs by simply using the data already available in their Warehouse Management System (WMS).
According to Eye For Transport (EFT), 95% of shippers agree that analytics is a necessary element (or will be in the very near future) to truly manage costs, fulfill ever-increasing customer demands, and prevent your offering being perceived as just another commodity. In order to capitalize on the growing demand for predictive analytics, here are just a few of the recommended best practices we can cite:
- Utilize a comprehensive WMS capable of connecting with every supplier, customer, and partner across your supply chain
- Categorize data into buckets, such as descriptive, diagnostic, predictive, prescriptive, and cognitive to build a foundation for future analysis
- Examine data to measure operational processes, drive insights, and make better business decisions
- Work with your customers to understand what data services they need to grow their businesses — then share that data with them
The bottom line is that if you want to remain competitive, you must transform your warehouses into highly automated and completely paperless operations sooner rather than later. Adding this paperless functionality will greatly increase output and shipping, reduce manual errors, and limit training requirements for warehouse staff.
Addressing the Prime Competitor
And what about the Amazon Effect? Amazon is reshaping logistics as we know it. Amazon saw a 30% growth in 2018 and, at this writing, has more than 50% of the U.S. eCommerce market. This makes them a formidable competitor for any eCommerce customer. And Amazon will continue to disrupt the supply chain and logistics space — and not just in eCommerce.
However, Amazon can be a force for good, too! Amazon is teaching any organization with an eCommerce element that they must totally focus on the end customer experience. Their implementation of the latest automation, distribution, and delivery technologies will force many firms to upgrade their game across the board. Welcome or not, Amazon’s dominance of eCommerce has almost single-handedly upgraded expectations of all online shoppers.
Average eCommerce shoppers now expect the following:
- Total, real-time visibility of available inventory 24/7
- Nearly unlimited product choices
- Free two-day shipping guaranteed almost anywhere in the U.S.
- Additional shipping options such as same-day — or within hours
- Options to have products delivered or available for in-store pickup
- 100% accurate, fast, and perfectly branded fulfillment of orders
- Real-time visibility into product tracking and delivery
- The ability to change the final destination of a product in mid-delivery
- Easy to follow and 100% hassle-free returns of products
Of course, this is what your average eCommerce shopper wants. But those expectations are about to rise even higher with the arrival of a whole new wave of consumers known as Gen Z. Born after 1995, this new block of shoppers will constitute nearly 40% of all consumers by 2021. Growing up with unprecedented access to technology, they have even higher levels of expectations when it comes to eCommerce. And while they certainly want all of the benefits demanded by older shoppers, Gen Z shoppers place more importance on the total experience, focusing on speed of delivery, opportunities to provide feedback and a visually appealing online dashboard.
Now, we understand what you may be thinking — you don’t have the internal resources or capital to be at the forefront of these changes. We’ve always been a huge proponent of aligning with the partners who study these megatrends and have already invested heavily in the development and execution of these ever-increasing demands. In fact, according to Armstrong & Associates, 86% of domestic Fortune 500 companies use an outside partner or partners to serve as an extension of their internal logistics and supply chain talent.
Whether you perform these functions internally or utilize some combination of internal talent and outside expertise, today’s logistics warehouses sit at the epicenter of the modern global supply and fulfillment chain.
A Few Final Considerations
Lastly, whichever direction you take moving forward, remember that your eCommerce logistics operations must ensure visibility through a variety of touchpoints for your customers and their consumers. This means you will need the capability to:
- View inventory 24/7 in real-time to help optimize stock control and order management as well as access to on-demand status updates
- Provide easy access to information and opportunities to speak with customer service representatives and other professionals who provide effective solutions to problems and troubleshooting assistance
- Deliver accurate and seamlessly-integrated billing functionality that is easy to review and offers customer-specific billing rules and automation to capture service charges, recurring billing, and more
Work with the eCommerce Logistics Experts
Brady Partners is a logistics optimization firm that partners with trusted business advisors to help their clients improve their logistics performance and realize positive financial results. If any of your clients are struggling with their eCommerce logistics strategy and performance, our team is here to help.
Contact us today to set up a complimentary logistics health check for your clients.