How Has The Shift To Ecommerce Impacted Logistics?
It’s no secret that in the last few years, there has been a huge shift to ecommerce from traditional bricks and mortar stores. This has only been accelerated by the pandemic, that has forced many of us to shop online throughout 2020. Logistics for ecommerce businesses does differ to the traditional supply chain that results in products on store shelves – so what impact has this recent shift had on the industry and what can we expect from the future?
Logistics For Ecommerce Businesses
Thanks to the on-demand economy, logistics for ecommerce businesses requires a degree of organisation, speed of service and a rigid supply chain. The likes of Just In Time (JIT) logistics works particularly well for goods sold online, as it means there’s less excess stock held up in warehouses, allowing products to be distributed more quickly. Just In Time logistics is offered by The Barnes Group and means that logistical services are provided in line with demand and sales, it reduces surplus stock and is also a more cost effective means of transportation.
Most ecommerce sites offer next day, or 3-5 delivery. This means that a product needs to go from a sale online, to being on that person’s doorstep, usually in less than a week. When it comes to logistics, retailers need providers to keep their warehouses stocked with products that are selling, and then also supporting in getting orders to couriers, who in turn will deliver them to the customer. This speed of service is crucial for many online retailers, as in a recent survey of over 8000 participants, 41% said they would abandon their basket if they were faced with long delivery times.
As you can imagine, for ‘next day’ sales, this process happens very quickly and requires a streamlined approach. A strong team is needed across multiple departments, including logistics.
The Shift & Its Impact
According to the Office of National Statistics (ONS), as of October 2020, 28% of all sales made in the UK were made online. Naturally this peaked in May of this year when the country was under lockdown restrictions. During this time, this figure was a massive 33%. The shift to ecommerce has been steady but certain in recent years, with the market only predicted to grow. There are just a handful of large companies resisting the change, such as high-street fashion store Primark, but many now have some degree of online presence.
Though the pandemic pressed the accelerator, this move to an online way of shopping has not been unprecedented, meaning the logistics industry has had time to prepare. The impact will mean more providers needing to understand the difference of services required for ecommerce businesses, as opposed to traditional bricks and mortar operations. Given that change won’t happen overnight, though, the sector is well equipped to embrace the switch and will bolster the changing landscape of retail.
What Does The Future Hold For Logistics?
For as long as you will need to buy and sell products, you will always need logistics. Though the way we purchase continues to change, transportation will always be required in retail and therefore the future remains bright for our sector. Naturally, as circumstances change, we will need to change also, but with operations such as Just in Time logistics under our belt, we are well placed to adapt.
If you’re an ecommerce or retail business looking for logistical support, please get in touch with our team for more information. Or keep up to date with The Barnes Group on our blog, Twitter or LinkedIn.
