E-Commerce
Logistics have a huge important in e-commerce. It doesn’t only refer to delivery but also to the overall fullfilment of e-strategies. Nowadays consumers are demanding products to be delivered rapidly and at their convenience. Their expectations with regard to speed and conveniency are as important as price and quality. At the same time the huge boom that e-commerce is having lately is significantly increasing the amount of packages that need to be picked, packed, shiped and sometimes returned, exchanged or damaged. This whole process represents significant operational costs.
Not all e-commerce businesses can survive the impact of high delivery cost and high operational cost for delivery to their end customers. The companies often cannot fully absorb the cost and thus pass these costs to their customers. Unfortunately, this may result in potential ecommerce customers baulking.
When going forma traditional to an e-commerce logistics strategies, the main changes are:
- The sellers: some of them are 100% online while others combine it with a physical shop.
- Flexibility in locations: the lack of necessity of being in a particular place, can reduce costs. Warehouses and offices should be located after an analysis of the main distribution centers and the minimization of costs.
- Connection to Supply Chain: direct communication to the store, consumers are a direct part of the supply chain.
- Tracking: tracking systems allow consumers to know the location of their goods at all times.
EMERGING TRENDS IN LOGISTICS:
- Traditional stores have to take advantage of economies of scale and locate their shops in main areas or eithin big shops.
- Location of warehouses: less urban areas.
- Economies of scale: main aim of companies is to increase online sales to reduce costs.
- Delivery system: integrated into the distribution process
- Consolidation of “last-mile delivery”
- Mobile integration in selling, tracking…
- Preassure on shorter Lead-Time for overseas vendors.
- Holiday Promotions
BEST PRACTICES
We can consider that a company has succeed implementing e-commerce if these requirements are met:
- Flexibility: allow expansion of companies.
- Order auditing: ensure that consumer receives its order in the right time and conditions.
- Proper packaging: as a marketing strategy and to avoid damaging goods
- Accurate Inventory Management: inconsistent sales periods require an accurate measurement of inventory.
Example: ZAPPOS- Strategy: drop shipping
Zappos.com is an online retailer of shoes and clothes with their headquarter in Las Vegas.
It was created in 2001 and in less than 3 years their revenues exceeded $70 million and they made the strategic decision of drop shipping - is the method where the company does not manage and hold inventory itself but instead transfers orders directly to a manufacturer or a wholesaler who takes on the responsibility to ship the items onwards- increasing by more than $35 million their assets.
Their core values include: good service, transparency, in-time delivery and a huge focus on customer service
SOURCES
https://www.flexe.com/blog/logistics-2017-trends/
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