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Retail Industry Updates Supply Chain Industry Updates

How to Keep Pace with the Online Shopping Boom


E-commerce had grown steadily in recent years, but the COVID-19 pandemic increased online shopping exponentially in a very short time because it forced people to shop online. Online sales jumped 76% in June, reaching $73 billion as compared to $41 billion last year for the same period.

Businesses have been compelled to adapt to a fully digitized model to reach their customers. While this is good news for e-commerce and logistics companies, it comes with several challenges, too.

For example, the companies need the necessary infrastructure to manage this outpouring of online businesses. But what are the other challenges that your e-commerce and logistics business might face due to this sudden surge of online shopping and how can you overcome them?

Challenge: Handling Shipping

Timely delivery is challenging, especially at a time when countries worldwide have imposed restrictions on movement. Yet, people don’t want to wait too long for the delivery of their orders. Changing the estimated delivery date to a later one will only disappoint your customers.

The Solution: E-commerce and logistics companies must work together to handle shipping. Your e-commerce platform must have a strong network of logistics support to ensure timely shipping and delivery of customer orders.

You can also use a driving route planner to plan well-optimized routes that will help your drivers reach destinations on time, make more deliveries than they would otherwise be able to do and reduce transportation costs.

Challenge: Proper Return Channels

Reverse logistics is an important part of e-commerce but requires a whole different kind of infrastructure to implement. Also, do you put the onus of reverse shipping charges on your customers? If not, then how do you minimize the costs?

The Solution: Amazon handles returns by employing a completely different reverse logistics facility. It would definitely work for others, but it would also mean more overhead.

For both the challenges mentioned above, the most practical solution is outsourcing. If your company doesn’t have the infrastructure, outsourcing your logistics and shipping wherever possible will significantly reduce your overhead.

Hiring the services of third-party logistics partners (3PL) can help you minimize the risks and costs of shipping while helping you manage returns. 3PLs have their own warehouses and shipping logistics, thus speeding up the delivery process and making it easier to deliver goods to consumers.

Challenge: Shipping and Delivery Charges

Online shoppers nowadays expect speedy delivery at minimal or no delivery cost. Yet the cost of shipping items has increased due to the rising demand as well as the restrictions imposed by governments everywhere.

The Solution: Most businesses mitigate their delivery charges by including it in the pricing or by luring customers into buying more by offering free shipping with bulk orders. But, with rising shipping costs, it is time to explore other delivery cost-mitigating models.

For instance, Amazon follows a model whereby customers get free delivery if they subscribe to Amazon Prime. This model works well in the current situation since people are stuck at home and the value of this package seems lucrative to most.

Challenge: Visibility of Stock

With the rising numbers of people ordering online and with businesses offering their goods through multiple channels, one of the biggest challenges is real-time stock updates. If your company lacks the infrastructure and technology necessary for real-time stock updates, there will be chaos with customers leaving for good.

You must ensure that your customers never receive a message that their orders have been canceled because there are no stocks when they have already made payments.

The Solution: You should take advantage of technological advancements like automation, artificial intelligence and blockchain. This will help you set up an accurate and real-time stock update system.

Utilize the Opportunities

E-commerce and logistics are booming and will continue to grow. Just make sure you streamline your processes, invest in technology that can support your business, outsource wherever possible and keep updating your business.

George Shchegolev is the co-founder of Route4Me, a route optimization software company.