eCommerce is mundane now. I mean, look at you ordering literally everything, from your clothes, your groceries, dairy products, jewelry, and gifts for your loved ones.
Yeah, I am also the same (he hee).
But, things were not this convenient earlier. I am GenZ, but in my childhood, we never ordered milk bottles online, so I can relate to how millennials feel while seeing things evolve.
A decade ago, we all used to hesitate to order things online or pay online as the product delivery used to be 7-10 days. But look now, you can get same-day delivery or an hour's delivery (express delivery).
But, have you been curious about how things have changed this drastically?
Logistics is one central reason behind this good change. Because of efficient and tech-driven logistics solutions, fast and safe product delivery has become possible. Thus, motivating every business to go online.
This phenomenon of increased eCommerce and the online market is nicknamed the "Amazon effect."
This phenomenon has transformed the trend of consumer purchasing behavior and expectations.
Customers today are getting speedy delivery, competitive product prices, and free shipping options.
It is also a challenge for logistic companies to cope with such demanding deliveries.
In this way, eCommerce is also imposing challenges on logistics. eCommerce now wants five times more logistics space.
Okay, so enough of all the grasping talk.
As you already know by the heading, we are going to talk about how eCommerce demands are changing logistics.
Keep reading to satisfy your curious brain.
Changes in Logistics with the Kickoff of eCommerce
Below are some ways in which eCommerce significantly played a prime role in transforming the logistics industry for good.
End-User’s Habits
The transportation and logistics industries have experienced a drastic change in consumer habits. In the past decades, there have been some visible changes, not only in terms of technology but also in the entire global economy.
Consumers' behavior has changed with the increased usage of Wi-Fi and smartphones. This also impacted the logistics sector, thereby imposing new challenges and motivating them to develop a compelling relationship with their end-users.
Transportation
Products go through many intermediaries before reaching the hands of the end consumers. The entire cycle looks something like this.
- The manufacturer produces the products in large proportions.
- Then they ship the products to the distribution centers.
- The distribution centers segregate the products for different fulfillment centers.
- In the end, private logistics handle the transportation of consumer orders.
Since in so many steps the efficiency gets decreased, eCommerce reduces half of the logistics cost. To keep up with consumer demands for things like super-fast deliveries and instant delivery, logistics companies have to come up with innovative shipping ideas that can prove best for both businesses and consumers.
Infrastructure and Technology
The advancement in technology and infrastructure influences the online retail industry. This brought a complete change in shopping and shipping behavior.
Today, we are all comfortable with shopping from home because of all the comfort and time. Plus, it also cuts down on the costs for the consumers that occur through traveling to the physical retail stores.
Since the eCommerce market's growth is never going to stop, it is quite evident that there will be an increase in the requirement for warehouses and it will also impact the retail real estate market.
Warehouse Automation
As mentioned in the above point, warehouse automation is one more facet that can not be overlooked by eCommerce retailers.
They are all concentrating on improving the warehouse to succeed in this competitive market.
Warehouse automation means the use of robots and automated processing with cameras, radio frequency ID equipment, laser sensors, barcode sensors, and more.
Do you know, that one of the eCommerce giants- Alibaba’s warehouse has 70% automation?
Returns
The ancient logistics method was very bothersome. Yes, I am calling it ancient. There were many operational changes and processing charges.
But today, the number of packages returning through this supply chain is way more than what is expected by the general public. It can even make up to half of the total products shipped.
In the eCommerce business, things also depend on how the merchant deals with returns and how they build a relationship with the consumer.
Because as a consumer, if it is hard for you to return the products, then you will not be satisfied and more likely will never purchase from that retailer. So, businesses today have integrated many return policies with restocking and replacing products for a smooth consumer experience.
To Sum Up
The eCommerce industry has contributed a lot to transforming the logistics and transportation industries. The service providers are working hard to deliver products to the consumers' hands as soon as possible.
And by organizing and simplifying supply chain processes with the use of technology improvement, the logistics industry has been positively impacted by eCommerce demands.
It is indeed a good transformation. What are your thoughts on this?
By the way, you must have figured out by this point that NitroXpress is a third-party logistics (3PL) company that serves eCommerce businesses.
We have mastered same-day delivery and express delivery services.
So, if you are looking for a shipping partner, let’s connect.
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