Disruptive Logistics

Delivery logistics continues to be pushed in new directions by e-commerce. E-tailers of all sizes are looking to “disruptive logistics” – a combination of delivery speed and innovation – as a way to add value, distinguish themselves, and keep the customer under their banner throughout the entire shopping process.

As a result of these moves, formerly well-defined borders between e-tailing and logistics are dissolving, shifting the entire e-commerce ecosystem in new ways that will impact all businesses in the space.

The quickening pace of e-commerce logistics innovation

Many innovations have occurred in the logistics e-commerce space over the past ten years. This push for logistics innovation by large e-tailers is sure to benefit customers in terms of more convenience, more service, more options, and faster delivery with higher standards. But these disruptive moves raise a host of questions as well: Can the giants keep up the pace? What can smaller e-tailers do to ensure they aren’t left behind? And how can third-party logistics regain its role as a driving force in the e-commerce market?

1Internet giants are setting the agenda for disruptive logistics. Can they keep up the pace?

Their size allows them to dictate their needs to their partners. However, continuous double-digit growth rates are becoming a problem: Amazon saw a big drop in their performance during peak retail season in the past year in the USA; some European delivery logistics markets were down to borderline capacity, too. And there are only few firms that can operate logistic networks at scale. Doing a better job during peak times and resolving growth bottle necks thus will be a critical issues.
2What are the options for small and medium enterprises?

Multi-channel retailers can successfully stand up to the major pure play e-tailers, if they are willing to work towards blending online and offline business. Moreover, they have to leverage their network of stores and decentralized storing opportunities. These allow them to deliver faster and with a better quality. Pure players, on the other hand, are increasingly stuck between the e-tail giants and multi-channel firms. For these firms, establishing a niche that makes them the “go to” address for customers can be the key to build a lasting competitive differentiation.
3How can third-party-logistics providers react to the trends and secure their share of the market?

To successfully serve the e-commerce market, parcel and postal logistics firms will need to pay more attention than ever to the demands for speed and innovation. Logistics firms will need to be faster, more predictable, more focused on the last mile, and innovative in the areas of Sunday and grocery delivery. Especially fresh and perishable goods will be the next big thing in e-commerce. This means that logistics companies have to start building scalable, cost efficient solutions now.