The pandemic has accelerated e-commerce growth exponentially. According to Digital Commerce 360, overall online retail penetration in the US increased from just 11% at the end of 2019 to almost 30% in the second quarter of 2020 and 45% during the 2020 holiday season.
The acceleration and increasing penetration of e-commerce has profound effects on supply chain logistics and transportation.
These include, on the one hand, the expansion of warehouses, distribution centers and fulfillment centers in order to place inventory closer to consumers, and on the other hand, the way products are routed and shipped.
This accelerated growth has resulted in a wide range of US companies facing unexpectedly high e-commerce demand.
As a result of the spread of e-commerce and the pandemic, sales in most retail stores have fallen. This shift in buying behavior requires retailers to have an exceptional and flexible supply chain to run smoothly.
Because implementing an e-commerce strategy on their own can be costly, many retailers large and small are turning to third-party providers such as Ryder for expertise and a cost-effective solution.
Here are three ways that working with a vendor can help retailers succeed.
One of the key lessons of the past year is the need to diversify settlement processes. Storing inventory at a single location or working with a single freight forwarder involves a huge risk.
Diversifying locations and carriers has therefore proven to be a successful solution.
Partnering with a provider like Ryder is one option. Through this provider, retailers can take advantage of an extensive network and place inventory at multiple locations. This improves processing and customer satisfaction.
In addition, the infrastructure allows retailers to take advantage of a multi-client system, which allows them to share costs with other retailers and avoid upfront costs. This also applies to transportation: A provider like Ryder works with numerous carriers to ensure orders are fulfilled on time and at the lowest operating costs.
Successful is anyone who has technological systems with which the company can adapt flexibly and quickly to changes.
At the end of 2019, for example, only 7% of stores offered curbside pickup. According to Digital Commerce 360, it was 43% in August 2020. Without the right technology, companies would not have been able to switch to this service so quickly.
In addition, the right technology for warehouse management, order processing, and transportation management can provide data on where inventory can be found and orders can be fulfilled across the network.
Ryder is able to implement the technology retailers need to process e-commerce and create visibility across the network. This technology also includes analyzing data on inventory placement, carrier planning, and route planning. It enables companies to tailor their strategies to customer needs.
Consumer demand continues to grow, resulting in a greater need for flexibility and resilience. Whether expedited processing, free shipping, curbside pickup, or hassle-free returns, retailers' supply chains are under constant pressure to meet expectations.
As e-commerce growth continues to accelerate, outsourcing sales and logistics makes sense.
A third-party provider like Ryder is well-positioned to help companies address various challenges — from pandemics and labor shortages to seasonal spikes and changes in consumer behavior. Ryder has the people, space, and systems to quickly change strategies and help companies develop a supply chain that is well prepared for future disruptions.
