E-commerce and omnichannel solutions are rapidly becoming the next frontier in the use of the Internet of Things and better order fulfillment processes. When the Internet first arrived, the idea of waiting for an extended period to receive a product was great, asserts Gordon Hellberg of Material Handling and Logistics. It opened up doors and gave millions access to products that were never available in local areas, regions, or other countries. However, Amazon is shaking up the mix by seeking to make today’s e-commerce practices obsolete, and shipping and logistics providers need to understand why.
Renewed Focus on Last-Mile Delivery and Multiple Order Fulfillment Options
The use of omnichannel solutions to increase sales through all accessible means, which includes e-commerce, social media sales, printed advertising and catalogs, and brick-and-mortar stores. With more products coming in, the pressure will be on distributors and order fulfillment centers to create warehousing space and eliminate wasted space wherever possible.
According to Patrick Burnson of Logistics Management, small facilities and storefronts may actually become miniaturized order fulfillment centers, reducing the length of time for order processing and enabling last-mile delivery within hours, if not minutes. Alternatively, this model will be applied to enhance the use of store pick up, which has been used extensively by Wal-Mart to create a comprehensive omnichannel environment. Customers have the option to have products shipped to home or the store, and this eliminates any confusion about how much space is needed within each store. Furthermore, this model of e-commerce and omnichannel solutions has enabled Wal-Mart to optimize load consolidation processes and reduce costs across the organization.
Consumers are also expecting more of manufacturers and shipping companies. They want products delivered, installed, and checked for quality, which will generate a new type of shipping process that requires certified technicians to be part of the delivery and customer service experience. Similarly, products will be relocated to be as close to customers as possible, which will naturally lead to an increased use of technologies, such as 3D printing.
E-Commerce & OmniChannel Solutions Continue to Drive Competition
The push toward a more efficient, data-driven supply chain will result in more competition among companies. As companies take steps to achieve lower rates, by utilizing third-party logistics providers (3PLs), the competition will further increase. This relationship will become more dependent-based, and rates will continue to decline even though the actual demand on the system will increase slightly. This lead to benefits for today’s e-commerce retailers and those in the B2B industrial space who may have common orders.
For example, small-business e-stores have managed to create environments that allow customers to see inventory in real time, reducing problems with excessive ordering. Consequently, the number of shipments will decrease, but the cost will need to stay competitive with Amazon’s offerings.
Omni-Channel Solutions Will Expand to Include and Use New Technologies
Newer technologies make up one of the most exciting parts of the supply chain to watch in 2016. Shipping and logistics providers will turn to technology to achieve the impossible, reports Peter Kinds of ControlPay. This will include the use of autonomous vehicles and drones for delivery, and the reverse logistics supply chain will also need to deploy new technologies.
In reverse logistics, returns will be one of the key areas in which omnichannel solutions will adapt. For example, a customer who simply ordered the wrong product may actually be close to another customer who ordered the incorrect, delivered item. To shipping providers, verifying the product has not been opened or tampered with will be the key to reducing unnecessary delays and transferring the product to the nearest appropriate party.
In our example, last-mile delivery services could be used to pick up the product from customer A, check it for quality, and deliver it to customer B on the next block. As a result, the provider does not incur any additional costs for reverse logistics as the respective driver would have already been in the area.
Although this practice may not necessarily be in motion today, it represents how much the supply chain will change from what is considered typical processes to keep up with the growing demands in an e-commerce-driven world.
Shipping and Logistics Providers Seek to Attract Millennials
Millennials are the paradigm of a digital generation. They are aware of what’s happening in the world more than any civilization throughout history due to social media, and they will be the source for future positions within shipping and logistics providers. Regardless of how they’re portrayed on late-night television, millennials are an asset to the industry, and they will value corporate responsibility, explains Todd Miller of Sterling Partners.
E-commerce must maintain end-to-end visibility to be successful, and this degree of visibility is the hallmark of all corporate responsibility initiatives. Consequently, the need to implement better analytics and real-time management resources to ensure everything is reported and delivered accurately will grow in tandem. With the e-commerce and omnichannel industry set to grow by 9.69 percent in the next four years, shipping and logistics providers cannot afford to ignore the demands of millennials any longer.
The modern supply chain is entering adolescence. Shipping and logistics providers are carving their paths for how to be successful, and many lessons are being learned along the way. E-commerce and omnichannel solutions are like final exams in adolescence. They are frightening, and they will create plenty of stress. However, they are critical to ensuring the success and development of organizations into prosperous aspects of society and the economy.