Meet us at the Operations and Technology Conference’s morning session on October 2 in Room Leher 4!
1What are the most recent developments in the e-commerce industry?
The e-commerce industry in Western Europe is growing rapidly by 10-15 percent revenue per year, with overall sales penetration poised to increase by double-digits over the near term. And as Internet-driven business-to-consumer package flows expand at nearly the same rate, so too does the opportunity for providers of delivery logistics to grow their businesses – although they will find the e-commerce market radically different from other markets they serve.
2What are the consequences for logistics providers?
Consumer expectations regarding delivery services have risen as remote shopping habits have evolved from a careful buying process that accepted some degree of inconvenience and long delivery times to transactions that are increasingly driven by spur-of-the-moment shopping decisions and total customer inconvenience. “Beacon” companies, such as Amazon and Asos, drive consumer expectations around delivery service, by constantly improving their offer: Amazon and Asos set service-level benchmarks, consumer expectations quickly adapt, and other e-commerce players must keep up or lose the race.
3What is it that consumers want?
Consumers want to decide where and then the ordered products are being delivered. Delivery should take place quickly after the order – if possible, even on the same day. Consumers would also like to change the time and place of delivery flexibly. And, last but not least, they expect simple handling of returns – free of charge, and with several options, such as returning the items in shops or having them picked up at home.
4What are the main challenges for logistics providers?
The main challenge is to figure out how to increase delivery options and accuracy. Especially for logistics providers, the financial and operational challenges are enormous. In the course of time, same-day solutions decrease the importance of outbound sorting and main runs. With changing volumes, this could lead to capacity problems for depots and networks. On the last mile, a lot of flexibility and agility is needed – for same-day solutions, but also for planning tours for specific delivery slot windows.
5What are current important trends?
There have been important steps towards flexible physical customer touch points. This includes 24/7 parcel lockers, shop concepts, home delivery and placing authorization, but also innovative electronic customer touch points such as live mapping service. “Follow my parcel”, e.g., is a parcel delivery service by DPD which can be narrowed to a time window of 15 minutes. Moreover, flexible de-routing of delivery place and time via smartphones or computers will be increasingly important.
6What do logistics providers need to do now?
To keep pace with the demands of Amazon and other e-commerce giants, logistics providers need to quickly implement new solutions. They need to understand the dynamics and developments in the e-commerce market and completely align their product design. In addition to an increased network flexibility with a focus on delivery capabilities and options, IT-driven interfaces will become indispensable.