Many e-Commerce entrepreneurs usually don’t have to worry about the logistics journey of their products. While some platforms have logistics streamlined by third-party services, it’s advisable for online stores to be aware of the problems that might occur with their supply chain.
A fifth of all retail purchases are expected to occur online by 2025, and the number is expected to increase in the future. To harvest the advantages that the e-commerce market offers, minimizing logistics-related problems is quite important.
First, you need to understand the logistics landscape of this industry, and then you can proceed with analyzing different stages of the journey and how to maximize customer satisfaction. Once you tick those boxes, you can focus on more advanced problems such as making the process more eco-friendly.
The E-commerce Logistics Landscape
E-commerce logistics are there to ensure seamless transportation of goods from suppliers to customers. In this regard, this process is very similar to traditional retail stores, yet e-commerce involves a range of different key participants and stakeholders with each of them contributing to this web of processes.
Just like the majority of trends and business concepts, e-commerce has been constantly evolving. More precisely, e-commerce logistics refer to the end-to-end management of the flow of goods within the digital retail space.
Key Players in the Process
The journey of the product starts in the factory or a workshop, but we can skip this part when talking about e-commerce logistics. Suppliers and manufacturers are responsible for producing and storing the goods before they are sent to the end customers. The effectiveness of the company responsible for storing directly impacts inventory availability and delivery times.
For customers, the journey begins when they click the “Buy” button on the digital storefront. From that moment, a whole chain of events is triggered with the aim of delivering the product to the customer as quickly as possible. E-commerce platforms manage online transactions and act as a middleman between suppliers and customers.
Products ordered online often switch multiple storehouses before they reach the end customer. This process is streamlined by third-party companies that handle logistics on behalf of e-commerce businesses. From warehousing and order fulfillment to transportation and inventory management, these providers offer their resources to enable businesses to focus on core operations.
In the end, the final step of product delivery is done by a last-mile delivery service which usually brings the product to the customer’s door. Couriers can come by car, a bike, or they can walk to the final address, but we’ve also seen increased adoption of innovative methods such as drones.
Automation and robotics have brought significant improvement to the e-commerce industry. The efficiency of logistics is significantly improved by automated warehouses and robotic picking systems. Order fulfillment is facilitated by this technology which minimizes human involvement and potential errors.
Of course, we can’t completely rely on automated warehouses, but they allow the human workforce to focus on more meaningful tasks. As a part of both automated warehouse processes and inventory management, artificial intelligence and machine learning bring a lot of improvements as well.
AI and ML are quite helpful at analyzing vast amounts of data which can then help with predicting demand fluctuations and enhancing decision-making. Suppliers can then be more efficient.
Companies responsible for providing logistics also benefit from artificial intelligence, as it helps them optimize routes, save fuel, and reach their destinations quickly and safely. The efficiency of this software depends largely on the accuracy of real-time data on weather and traffic.
Stages of the Logistics Journey
Every key service provider mentioned previously is responsible for one of the stages of the logistics journey. If you approach every stage with an adequate strategy, you can make each step more effective by understanding how to make better partnerships and implement more efficient strategies.
Unless you’re making your own products, your first step in handling your logistics is choosing a dependable supplier. This stage involves evaluating potential suppliers based on factors such as product quality, reliability, and cost-effectiveness. Their location can sometimes also have an impact on your service quality.
Storing the products is the next step in the process. Warehousing plays a pivotal role in storing, organizing, and preparing products for shipment. You should do proper research on the warehouses that incorporate the latest technology, such as automation and digital inventory management. This will ensure that customer orders are fulfilled accurately and promptly.
The transportation stage largely depends on whether you have your own fleet that fulfills the orders or you’re collaborating with a third-party logistics provider. You can use a work order template for your fleet maintenance if you’re looking to ensure that your fleet works flawlessly.
Technological advancements play a key role in optimizing transportation. Advanced route optimization technologies analyze real-time data to ensure optimal route planning. Paired with real-time tracking and visibility, you can have valuable insight into the movement of your goods. Any issues that might occur in this stage can be more easily fixed if there’s a transparent approach.
The last stage occurs between the logistics company and the company responsible for last-mile delivery. Deliverers have a significant impact on customer satisfaction, and the problems that might occur in this stage can have a poor impact on the customer, regardless if other stages were flawless.
To minimize the chances of rude deliveries that are late, you should do extensive research on what companies you want to partner up with.
Customer Experience and Satisfaction
The logistics journey can sometimes leave a larger impact on consumer experience than the product itself. Even though we mentioned multiple businesses, each responsible for a different stage, the potential problems that occur will be tied to the online retailer in the end.
Let’s say you ordered a birthday present for someone that’s dear to you. Yet, instead of receiving the product a week prior to the birthday, as it was mentioned on the website, you receive it a couple of days after the birthday party. Of course, the majority of people would be understanding, but it will certainly inspire them to write a couple negative reviews.
To minimize the anxiety and uncertainty for the customer, as well as prevent previously mentioned situations, you should implement real-time tracking that allows the customers to monitor their orders. This will help customers make their schedule around the expected delivery time. Furthermore, if something happens to the package, the customer can appeal on time.
Sustainable and Eco-Friendly Practices
As the e-commerce industry continues to expand, so does its environmental footprint. The whole journey of the product, starting from the manufacturer to the customer, has a significant impact on the environment.
Addressing these concerns is not only crucial for minimizing harm but also for meeting the growing demand for eco-conscious consumerism. Some customers are looking exclusively for retailers that are eco-friendly and would rather pay the extra dollar knowing that their decision is more ethical.
Purchasing via online retailers still causes carbon emissions, air pollution, and resource depletion. Increased transportation, packaging waste, and energy consumption are some of the necessary considerations that e-commerce entrepreneurs need to think about.
You should see in which ways you can make every logistics-related process more eco-friendly. For example, finding suppliers that are using eco-friendly packaging that’s easy to dispose of and recycle. Additionally, optimizing packaging sizes to reduce empty space during transit can lead to more efficient transportation and decreased fuel consumption.
In terms of transport and fleets, some third-party providers are focused on being eco-friendly. They utilize AI to make their routes optimized so that they spend much less fuel. On top of that, the fuel that they use is often a greener alternative. This is the part of the logistics journey that has the highest impact on pollution.
The Logistics Journey is a Key Part of eCommerce (Conclusion)
For online customers, this whole process can appear almost like magic. They click a button on their computer, and a product that can range from a bracelet to a CNC machine arrives at their doorstep. However, hundreds of people are involved in some way with the logistics, and it consists of many difficult processes.
While it’s not necessary to know every detail of the logistics journey as someone who runs an e-commerce store, it’s quite helpful to know the stages of it and the people responsible for them. This way, you can have a better insight into the problems that can occur and fix them before them, leaving a negative impact on your customers.