Logistics Minded

It’s an e-commerce world

E-commerce has come to stay. As asserted by Jeff Berman in his column for Logistics Management, the e-commerce phenomenon has a concrete impact on how the supply chain is shaped and how providers deal with their new customers’ logistics needs.

End-customers can today buy everywhere, anytime. They don’t need a laptop anymore: smartphones offer direct access to the biggest retailers (most of them have specific applications for this purpose). They ask for free shipping and free returns, they demand their goods to be delivered within one or two days. As a consequence, retailers need to ease their buying process, offering them more services for less.

The “Online Shopper Global Study” (published by comScore and UPS), sums up the results of more than 5,000 interviews to e-shoppers who made at least two transactions in the last quarter. The results of the survey are clear: half of the respondents assert that their purchases are carried out on the internet.

Another study from PWC called “They say they want a revolution – Total Retail 2016” shows how social media influence and mobile shopping are today one of the main drivers of innovation for retailers. You can download the document via the following link:  http://pwc.to/1Ub5hna

I invite you now to read this extract from “It’s an e-commerce world”, by Jeff Berman (Logistics Management), that also considers other factors in the e-commerce revolution.

(…) Retail giant Wal-mart plans to sell its China-based e-commerce business to JD.com. (…) It is just the next domino to fall in the world of e-commerce, and subsequently e-commerce-based supply chain and logistics operations, which continue to develop, morph, evolve, and change all at once with seemingly lightning-like speed.

In the news regarding Wal-mart, it appears to be a move based on its need and desire to bolster its share in the Chinese e-commerce market, one that is largely dominated by Alibaba, much like the influence Amazon has here in the U.S. (…) It has more to do with e-commerce continuing to change how the supply chain and logistics game is played.

To be sure, we have all gotten a glimpse of the playbook, what with free shipping, or at least next-day, or two-day becoming in many ways, the norm, due to (perhaps) impatient customers who “must” have their online-ordered items delivered as quickly as possible.

Compound that with changing consumer buying habits, increased e-commerce activity via smart phones, people not wanting to go to the mall and just sheer ease of use, and it is really no wonder the game continues to change––and quickly.

(…)

It is also becoming more and more clear that e-commerce continues to affect the industrial real estate market, too, based on data by industrial real estate firm JLL. The Chicago-based realtor made that clear in recent data highlighting market conditions for the first quarter of this year. Perhaps the most telling statistic was that the first quarter vacancy rate checked in a 6.2 percent, which stands as a 16-year low and below the previous cycle’s low point of 7.4 percent in early 2008. And even with 131 million square-feet of new spec construction coming online in 2016, JLL said that vacancy rates could remain in the low 6 percent range through the end of the year.

To a large degree, these rent and vacancy numbers are being driven by e-commerce gains in tandem with “last mile” delivery supply chain-related changes and improvements and changes in warehousing and distribution as they relate to e-commerce, too.

“E-commerce across all regions of the world is still a double-digit digit growth business, and we have seen the thin line from us as consumers, as well as retailers aligning supply chain and industrial real estate to support the e-commerce platform and that has not changed at all,” said Kris Bjorson, International Director and leader of JLL’s Retail Distribution Service business, in a recent interview. “(…)

As e-commerce continues to grow at its rapid clip, supply chain and logistics changes and developments will continue. (…)

 

Curated from It’s an e-commerce world

 

Leave a comment

Your email address will not be published. Required fields are marked *