- 05 May 2022
- by Andrej Fedek
- 0 Comments
The Global Supply Chain Crisis in 2021 showed many ecommerce brands the inefficiencies and bottlenecks that exist in the supply chain and logistics infrastructure system.
Be it the constraints of warehousing capacity, the sudden dearth of delivery professionals, and the delayed shipping time, marketers need to adopt ecommerce logistics trends that can help create a better experience, both for brands and the end consumers.
Here are 7 ecommerce logistics trends you need to look out for in 2022.
Greater focus on sustainability
According to Deloitte’s Sustainability and Consumer Behavior study 2021, 45% of consumers stopped purchasing from certain brands because of sustainability or ethical concerns.
Add to that 65% of consumers now want brands to reduce packaging.
In such a scenario, sustainability initiatives even in logistics are a must for ecommerce companies to adopt in 2022.
Here are a few of them already taken up by companies:
- Using fuel-efficient vehicles or shifting to electric vehicles
- Making use of rigid boxes wholesale. For example, Walmart calculates the “Green Quotient” of product packaging that is based on several attributes such as usage of recycled substances, greenhouse gas emissions, product to packaging ratio, and so on. This will prevent millions of pounds of debris that end up in landfills every year.
- Integrating renewable technologies to power warehouse’s energy needs
Increasing demand for TPL (Third Party Logistics) Services
As ecommerce grows rapidly, there’s an increasing demand for outsourced third-party logistics services. These services help you with procurement, having an order fulfillment system, storage, and transportation.
TPL services help ecommerce companies to focus on their core competencies, get access to the experience and expertise of the provider, improve customer satisfaction, manage increases in order volumes, and achieve shorter delivery times.
We are also seeing the emergence of micro warehouses in urban areas, closer to customers’ homes, where TPL providers and customers can process and pick up their online orders.
Prioritizing supply chain resiliency
The pandemic disrupted many companies’ supply chain operations and even today, many are facing global shipping challenges, sourcing inefficiencies, and supply shortages.
Even the tech giant Apple had to halt its iPhone production due to chip shortages and supply chain constraints.
What can be done in this situation?
Prioritize supply chain resiliency. You need to adopt strategies that can work even when there are disruptions in the market. Here are three of them you can adopt:
- Have a buffer of safety stock so that you can continue to serve customers even during unprecedented times
- Identify vulnerabilities in your supply chain. For example, you may have a supplier in a different country where pricing is inclined to change a lot. Make action plans for all such scenarios
- Distribute your physical inventory across locations so that you aren’t dependent on a single entity.
Introducing AI in logistics
A report by McKinsey states that AI will create an entirely new “logistics paradigm” by 2030 as it continues to outperform humans when it comes to warding off repetitive but crucial tasks.
Amazon recently launched one of its bigges fulfillment centers in Sydney, Australia that will make use of AI to store 50% more per square meter. They estimate that this center could theoretically deliver up to 85% of Australia’s population within 12 hours.
Some other ways AI can be incorporated into logistics are by providing demand forecasting by asset type to help in better transportation forecasting, compiling data and enriching its quality, and improving warehouse management efficiency and yield optimization.
In a nutshell, AI can be that gamechanger for your business when it comes to logistics.
Optimizing last-mile logistics
The last mile refers to the final phase of the order fulfillment process when the order is delivered to its final destination (the customer)
It is estimated that the last mile accounts for 40% of total logistics costs globally. It is one of the biggest logistics-related problems faced by ecommerce companies.
Why is this so?
The factors that predict success for last-mile logistics are location, special customer requests, governmental regulations, and traffic conditions in that location. Since these factors differ from customer to customer and city to city, you have to take a lot of things into consideration.
But it’s surely not a problem that can be left unsolved.
Various ways in which companies are tackling this issue are:
- Offer order-tracking information via GPS and telematics devices in delivery vehicles
- Crowdsource delivery drivers like Walmart did when it launched “Spark Delivery” in 2018 — a platform where independent drivers can deliver goods to customers.
- Use route optimization software to plan optimal delivery routes taking into consideration traffic congestion, construction closures, and so on
- Make use of eCargo bikes or drones. Many companies like Amazon, FedEx, and Alibaba are making use of drones to deliver goods to their customers and reduce their delivery times drastically.
Creative sell-deliverer partnerships
Bed Bath & Beyond partnered with Uber in the past year to launch their baby and kids vertical. This partnership will help the brand perform same-day delivery of wipes, diapers, baby food, and other items that parents need.
With more brands like Amazon offering same-day delivery options to their customers, it calls for more such creative sell-deliverer partnerships that help ecommerce brands expedite their delivery process and increase customer satisfaction.
Creating branded shipping experiences
What popped in your mind when you saw the above picture?
That’s the power of creating branded shipping experiences. It encourages brand recall and whenever a customer shares an image or uploads an unboxing video, your ecommerce brand gets marketed.
Premium packaging also sets your company apart from the competition and helps create a brand identity and inspire word-of-mouth.
Some ways to create a branded shipping experience are premium packaging, gift options, shipping labels, and branded visuals.
Creating a great customer experience is the goal of all ecommerce companies and logistics is a great place to start. With these 7 logistics trends, you’re all set to experiment with your logistics infrastructure and bring a revolution for the good.
Andrej Fedek is a digital marketer. He recently started his own blog about digital marketing called InterCool Studio. His passion is to help startups grow and thrive in a competitive environment.