3 Key Trends in Ecommerce Logistics
The eCommerce market is growing incredibly fast, in 2019, the global eCommerce market has already crossed $2 trillion.
New trends are sprouting up like weeds. Although the lucky few (e.g. mobile commerce) can appear in presentations at industry conferences for years, others disappear as soon as they appear.
You’ve probably heard about artificial intelligence and machine learning in eCommerce. Today we will discuss prevailing trends in one of the most neglected eCommerce areas. Despite this neglect it is one which has a decisive impact on the final experience of each consumer – logistics.
#1 Omnichannel fulfillment
Ok, so what is fulfillment and how can it help to implement the above strategy?
Omnichannel fulfillment in action
#2 Eco-friendly packaging
Legal
Brand image
Examples of eco-friendly solutions
#3 Tailored communication
#1 Shipment tracking
#2 Redirect parcels
#3 Return service
Conclusion
Sounds good? Let’s dive right in!
Presenting the brand and products to the customer via various points of contact is a very important element in the development of many stores. That is why it is not uncommon for those that started as stationery stores to also launch digital sales channels.
Generally, they start with the website, but then move on to social media or content channels. Movement the other way (from digital to offline) was less common until recently.
In the beginning many had predicted that the internet would completely change consumer habits, meaning that brick and mortar stores would stop offering value to the consumer. And yet, the phenomenon called the ROPO effect (research online, purchase offline) has shown this to not be entirely true. Consumers are still divided into those who like to “touch” and those who need a digital experience with the product in order to make a purchasing decision. So in an effort to reach both of these groups, brands are investing in both an online and offline presence.
3 Key Trends in Ecommerce Logistics Click To TweetIt is the process of fulfilling customer orders that come in from various channels (brick-and-mortar stores, social media, online stores, marketplaces, etc.) and are distributed via many channels. To make this possible, sellers often consolidate stock in one place – e.g. in a logistics operator’s warehouse, which can integrate the orders that come in from many channels ordering (such as an eCommerce platform) and receive orders (from different courier companies depending on the pickup point ). It also applies to the handling of returns ordered by target customers.
Fulfillment is the process of fulfilling customer orders that come in from various channels (brick-and-mortar stores, social media, online stores, marketplaces, etc.) and are distributed via many channels. Click To Tweet
An example of the implementation of the multi-channel logistics process
Thanks to the operator’s technology, inventory is constantly updated, so that no product rung up at the cash register of one of the stationary boutiques will be sold in the online store at the same time and vice versa. The technology controls where and in what quantity all the goods are located and allows you to make transfers if necessary.
For example, if a promotion is announced in an online store, resources are reallocated to an online channel to ensure maximum product availability.
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The following example is obviously simplified but still informative.
Imagine living in Germany and running an electronics chai. In your network you have both stationery stores – in major cities, shopping malls – and an online store. Then a client from France orders 20 laptops for his new office. You know that they are available in the Stuttgart stationery store – which is located quite close to the French border, so shipping from this place seems less expensive and faster. However, you don’t want to deplete this stationery store’s inventory, so you decide to ship the items straight from your warehouse to the logistics center in Poland.
As a result, the operator efficiently delivers products to the border distribution center in France (via long haul freight), where they are picked up by a local courier company, with whom they have a contract and thus deliver the goods to the customer (last mile). Additionally, because you are not the only customer using this transport (the operator also serves other stores that send their products to various places throughout Europe), the price is not excessive. In addition, the operator has negotiated preferential rates with these transport companies – after all, it regularly requires a larger scale of shipments than a single store.
At the moment, we place great emphasis on the omnichannel strategy, i.e. the parallel development of both eCommerce distribution and stationary distribution. We want to build processes so that these two channels can support each other. It would be difficult for us to develop this well without a logistics operator or without a responsible logistics department that can wisely map these processes. Thanks to the fact that we cooperate, Omnipack is responsible for finding us the best solutions in logistics and — de facto — contributing to our business development.
~ Wiktor Dymecki, a member of the HubStyle board.
Check out HubStyle’s case study >>
Even if the arguments of environmentalists do not appeal to us and we do not feel obliged to embrace more sustainable solutions – there are still two reasons why it is worth being an ecological businessman. First of all – a law that is increasingly opposed to non-eco solutions. Secondly – a good brand image and customer loyalty.
In the autumn of 2018, the European Parliament decided to ban the use of disposable plastic in the European Union. It must be replaced by environmentally friendly solutions by 2021. Overall, the amount of plastic packaging in the EU is to be halved over the next four years.
Regulations are also created by the member states themselves. VerpackG law has been operating in Germany since January 1, 2019. The provisions are intended to shift the costs of packaging disposal onto the companies that are introducing them to the German market. Those who ignore this law will face a penalty of up to 200,000 euros.
Let’s look at what the research says:
A Loyalty360 study found that 73% of US consumers refused to buy a product that they felt had a negative impact on the environment. In turn, this year’s report prepared by GlobalWebIndex “Sustainable Packaging Unwrapped” indicates that consumers increasingly want to limit the amount of plastic packaging waste that their households generate. According to the report, 42% of consumers in the US and UK declare that in their daily shopping they pay attention to whether the packaging of products is ecological. In turn, 35% are guided by whether the product ingredients are organic or eco-friendly.
A Loyalty360 study found that 73% of US consumers refused to buy a product that they felt had a negative impact on the environment. Click To TweetFor a growing number of consumers, the issue of ecology is not without significance. It is worth taking their interests into account, and thus protect yourself from these types of comments:
One of Amazon’s clients criticized the company for unnecessarily filling the package with a great amount of plastic – given also the fact that she ordered an eco-product – reusable straws.
#1 Cardboard and paper – their main advantage is sustainability.
Most packaging manufacturers offer products that are made from recycled materials. This material is also easy to reuse, e.g. as a filling. Unused, old or damaged cartons can be used as a replacement for bubble wrap.
An example of ecological cardboard, project by Progresspacking.co.uk
#2 Bio-foil, bio-packing chips – these materials naturally degrade because they are made of plant starch.
Examples of bio-foil used for wrapping clothing. Source: ecoenclose.com
#3 Wood or bamboo – wood wool, i.e. wood wool is very popular and often used as a package filling. Also, bamboo – which can be used to produce product packaging – is an extremely effective material source. Bamboo grows at a dizzying rate (inch per hour), and in addition is easily recyclable.
An example of using wood wool in decorative packaging. Source: Etsy.com
Hello * NAME *, do you apply personalized messages to your clients?
Most will answer that of course, we personalize newsletters, e.g. using a name, or adding handwritten letters to parcels or sending promotional codes to celebrate a birthday. Indeed, personalization tactics are very popular in eCommerce – it has long been known that every customer likes to feel special and receive offers tailored to their needs.
It also seems like an obvious way to ensure ease and speed of communication. Hotlines or virtual assistants available 24/7, chatbots and moderators of social channels who respond to comments and questions on an ongoing basis – this is basically the status quo expected by modern consumers.
Additionally, more and more e-consumers cannot imagine shopping online without the ability to manage their shipment. And large courier companies are increasingly providing these types of tools:
FedEx enables you to follow your package’s whereabouts at any time
That is the ability to check exactly where a parcel is at a given moment – whether it is prepared for dispatch or has already left the manufacturer’s warehouse or is in the hands of a courier. To do this, the recipient must provide the order tracking number – which is not always easy or possible. That is why it is so important to use automatic notifications (e-mails or phone depending on your preferences), which keep them informed about what is happening with their product.
DHL enables you to redirect your package or change the address of the delivery.
Courier companies usually allow this type of action even after the package has already been delivered to the courier. Then customers receive a PIN code via SMS that will allow them to redirect it to another place or change the delivery date.
Unfortunately, we know from experience that couriers often receive this information too late and try to deliver a package with the original date simply because it is more convenient for them – later changing the status of the package to undelivered.
As a shop owner, we offer can offer the option of changing the date or redirecting the courier earlier – before the warehouse issues an order to him. However, this requires efficient customer service and the seamless integration of our systems with inventory systems.
DPD enables you to quickly and painlessly return your order.
The process of return is nice and clear.
This option, popularized by Zalando, has successfully conquered the hearts of customers of other brands. No wonder that it was accepted by all major courier companies, and with them subsequent brands – e.g. Poland’s eobuwie.com.
You do not need to immediately fill out any special online applications (such as those mentioned on Zalando). Adding a return label to a package, as well as adapting the packaging for reuse is enough if we sign a return contract with the courier company and transfer the “technological” part to its website.
However, it is worth adding a question about the reason for it onto the return form – it is invaluable knowledge that will help retailers in the future to minimize the percentage of unsuccessful purchases in the store.
There are perhaps those who have reached the end of this article and are disappointed: “How is this? Logistics trends and not a word about drones?” However, despite the sensational announcement by these global giants (in this case Amazon) that drones will soon be knocking on our door the ability to actual implementing these visions will still take a few more years. Air safety issues, for example, remain a complicated issue, especially over the rooftops of larger cities.
This does not mean that new technology will not enter warehouses or vans. Computers, scanners, professional software, monitoring etc. – all this is a reality in the logistics of medium and larger online stores.
However, it is worth knowing that “trends” – which we often look for in the latest reports or at industry conferences – are actually closer and more accessible than we think.
Mateusz Jura – as a Business Developer Manager at Omnipack, he is responsible for building relationships with our potential clients and partners. He has previously worked with, among others, Unilever and PwC, and in the last four years has been with iProspect, where he also worked in business development. In his free time, he enjoys sailing (winning the Polish Championship title in 2017), travelling and skiing.
Do you have any questions? Feel free to contact Mateusz by LinkedIn
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