ECOMMERCE LOGISTICS TIPS
Are your warehouses prepared for the new commercial reality and eCommerce logistics?
The exciting logistics industry is experiencing a time of dizzying change. In recent years, professionals in the sector have been able to see great advances in logistics technology ; and above all, how the rise of eCommerce is revolutionizing both the logistics and commercial sectors.
Logistics has become visible. Now it is the epicenter that moves the business world – as Cristina Sánchez affirms in this interesting article. It is, therefore, a competitive advantage in the market that moves the most, that of eCommerce.
The unstoppable growth of eCommerce
Electronic commerce already accounts for 20% of consumption in Spain (1) . Specifically, the annual turnover of Spanish e-commerce reached €40,000 million in 2018 (2) .
In addition, the growth of the sector seems unstoppable. In fact, it is believed that eCommerce is still in an early stage of growth (3) and is growing by almost 30% year-on-year – a figure that is enough to understand the challenges it poses for the logistics sector. At a global level, the forecast for e-commerce sales volumes is 4.5 trillion dollars in 2021 (4) , so we are actually talking about a shocking paradigm shift at a global level.
Why adapt your company as soon as possible to the new eCommerce logistics reality?
This relentless growth of the e-commerce industry is driving (and will likely drive more) new logistics needs and challenges across all industries and company sizes . Actually, we are experiencing a new approach to consumption. And along these lines, the new eCommerce reality is leading to an improved shopping experience and customer satisfaction. This is due to the necessary optimization of logistics processes and better customer service, intrinsic elements of electronic commerce. In fact, it is estimated that 78 % stop buying in a store if the logistics do not work .
Therefore, companies that want to maintain their position in the market must consider adapting their processes to this new commercial reality.
And, it is not a change only for multinationals and large companies, but also medium-sized and SMEs must begin to consider now in order not to lose competitiveness in the current market.
Efficient logistics, a key factor of competitiveness
As in other strategic areas of the company, eCommerce is completely changing the rules of the game in the supply chain as we have known it to date. Along these lines, efficiency in logistics management plays an increasingly relevant role in the success of electronic commerce . In fact, eCommerce and logistics already have a strong link of dependence and perception of the degree of quality by the consumer . Therefore, not having efficient logistics management can lead to a loss of customers and sales .
In addition, it should also be taken as a corporate strategic value since it provides a lot of key information about the client, their preferences and how to better compete.
And how do I adapt my logistics management to this new reality?
4 eCommerce logistics optimization tips for your warehouses
1. Agility and operational reliability
Today’s consumer demands reliability, ease and immediacy in their orders. On the one hand, it objectively analyzes your preparation processes, picking systems and order shipments. Check if they are reliable and agile enough for the current online sales requirements. Keep in mind that the correspondence of the requested items and very fast delivery times are two decisive factors to leave a positive memory of an eCommerce in the customer. Order management, automation, inventory and stock reliability are essential issues for eCommerce logistics. Therefore, if after analyzing your operating systems you detect possible improvements in these areas, we recommend that you request an analysis of
Consulting solutions to optimize them. Today there are various logistics optimization systems; automatisms; mobile radiofrequency terminals that connect the data scanned in barcodes or RFID from your warehouse with the data from your Warehouse Management Software (WMS); and many other warehouse logistics solutions with which you can improve your logistics agility and reliability.
2. Visibility and storage efficiency
Offering excellent customer service in the e-commerce sector is a vital factor in order not to lose competitiveness. For this, and due to the peculiarities of electronic commerce, the synchronization and visibility of warehouse stock information is especially important. Do you know what negative impact it has on your customer’s shopping experience if you indicate that you will deliver an order that you cannot fulfill due to lack of stock? Therefore, if you do not have a good EMS , we recommend that you consider implementing one. Through an efficient WMS, the availability, movement and exact location of each product is controlled and optimized, making inventory management easy and efficient.
Let’s not forget that a dissatisfied consumer today will probably express their dissatisfaction publicly on social networks, with the impact that this can have for the brand.
Thus, guaranteeing good logistics operations and inventory control before starting any eCommerce project is essential to offer a good shopping experience to our customers.
3. Management of optimal and fast returns
eCommerce has high return rates. In fact, Spain is the second European country with the most returns in electronic commerce, according to a recent report on the sector. For this reason, it is essential to have an efficient reverse logistics system . In other words, having mechanisms, logistics technology and an efficient WMS that allow returns to be carried out quickly and efficiently. In short, as with orders, not having agility and operational efficiency in returns can lead to unnecessary additional time and costs.
4. Work effectively and efficiently, not harder
Simplify or eliminate unnecessary processes and tasks. Broadly speaking, you should think that an extra displacement of your operator is equal to more time and additional costs for your company. Make sure that the stocks are in the most suitable location based on the rotation of the SKU; the specific needs of the product; the minimization of labor and product risk factors; or operational efficiency. For all these reasons, relying on a good WMS that allows you to control and optimize warehouse processes can be an excellent investment for the success of your e-commerce project, especially if it serves multiple channels.
Logistics efficiency an imperative to compete in eCommerce
In short , as we have seen, the unstoppable rise of eCommerce makes it necessary today to digitize and optimize logistics operations. In this line, it is therefore not surprising that 85% of those surveyed in the AECOC Supply Chain Trends Report say that the level of investment in supply chain technology is growing .
Thus, having good logistics is imperative to compete in the current eCommerce reality. And to have good logistics, it is key to have an efficient WMS , the “brain” that governs the operations and logistics efficiency of warehouse management.
And it is not about an announced disruption of the rules of the commercial game. This is a reality today, which can also affect the company’s competitiveness if it is not properly addressed. For this reason, all companies, of all sizes, should analyze their logistics operations and assess whether they need to adapt their company to the new eCommerce commercial and logistics reality so as not to lose customers and sales. And you, have you already done the analysis in your company? Do not hesitate to ask our consultants for advice if you need it.