After the carnival kick-off and the Chinese “Single’s Day”, the general feeling is that Christmas is now around the corner. Shoppers are intensifying their searches online. Even some have ordered their first wave of presents before the so-called Black Friday kicks off. Also the first Christmas parcels have been successfully delivered.
Precisely, logistics providers such as Hermes or DHL are warming up to guarantee the timely delivery of every parcel ordered. They definitely play an important role to assure the success of the purchase, but they are not enough in the spotlight. What are their main challenges and pain points? How can they reach excellence within this critical part of e-commerce?
To really understand to what extent the delivery process is being refined year after year, I just would like to refer to one of the tweets posted by the Twitter account Clavis Insight, which was one of the most active accounts together with the Alibaba Group during the entire singles day. The numbers speak for themselves:
— Clavis Insight (@ClavisInsight) 10 November 2016 «
These incredible figures achieved by one of the most trusted platforms for Chinese consumers show the way to follow in terms of performance and, certainly, engagement.
How is the logistics sector doing?
Under the logistics sector there are many subcategories and different aspects to take into account. Firstly, I would like to stress the positive influence of e-commerce in the German dispatching, parcel and express market because, thanks to the rapid expansion of e-commerce, this sector is not only in very good health but also the future predictions of growth look very bright.
In terms of figures, the turnover obtained by this market in 2015 reached 17.4 billion Euro, what represents an increase of 4,6 % with respect to the previous year, and the amount of B2C parcels increased exponentially by 10% in comparison with 2014. Furthermore, this market expects to have an annual growth rate of 5% until 2020.
What are the main challenges?
From a wider perspective, the present and future of logistics is challenging, to say the least, as the short-term prognosis conflicts with online retailer concerns:
- Costs are in continuous rise: 25% of logistic companies consulted believe that the costs within the logistic sector will rise in the next three months.
- Prices have also an uprising trend: 31% of respondents expected that the prices will increase within the logistic sector.
In contrast, according to a survey conducted by Händlerbund, the most important concerns for medium-sized online retailers in terms of delivery are: saving costs (85%), delivery tracking (50%), offering a faster delivery service (40%), and interface & integration possibilities (37%).
Precisely, logistic companies are planning to invest strongly in logistic software. On the other hand, the two most important trends within this large sector are building IT integrations (85%) and reducing waiting times at the logistic centre.
The expert advises
Once we know the current state of logistic and the short-term estimations based on the Christmas campaign expectations, the prominent logistics expert and speaker at our next Handelskraft Conference Oliver Dahms indicated to Handelskraft that logistics companies should assure the delivery of a best-in-class performance as customers don’t give a second chance:
» “The performance of logistics during the Christmas season is the supreme discipline. All systems are challenged to the maximum. While logistics often reach their performance limits, there is hardly any other time of the year where performance and reliability of logistics merge at one single point in time.” «
Logistics companies do not only have to pay attention to the performance of their own logistics, but also to the performance of all the participants that take part in the supply chain. On the other hand, according to Mr. Dahms logistics companies should be focused on two important aspects:
» „the operative logistic level. I.e. no secondary theatres of war, no system changes with software or hardware. No other projects. And, also extremely important, very close communication with all departments influencing order behaviour, order receipt, and customer communication.“ «
After providing the full picture of logistics and knowing the economic upturn the online trade is enjoying, it is time to polish the last details and to prepare flexible mechanisms in case a quick reaction is required.