Global Business to Consumer eCommerce sales has witnessed a sharp growth over the last few years. According to eMarketer, eCommerce sales will top $4.058 trillion in 2020 i.e. 14.6% of total retail sales of US$ 27 Trillion.
Critical to enabling this growth is eCommerce fulfillment. As internet retailing grows, the needs and demands of multi-channel retailing continue to evolve. Clearly, there is a significant need for logistics in many emerging markets and for reliable service providers who can scale up to meet these burgeoning demands. eCommerce fulfillment is an opportunity area for established 3PLs globally as well.
The growth in internet retailing has created multiple new revenue streams for the eCommerce ecosystem. Some interesting trends include:
CPG companies selling to customers directly online
A clear trend is emerging wherein CPG companies are reaching customers online as an additional sales channel while taking care to not upset the existing partner network. This could be through setting up their own website or by selling through marketplaces as an additional channel or a combination of both. Given that most technology systems of CPG companies are predominantly B2B oriented, the fulfillment is being undertaken either by B2C 3PLs or by special purpose fulfillment centers set up by the CPG Companies.
eTailers leveraging cross-border sales and fulfillment
eTailers are partnering with marketplaces in multiple countries and cross-border platforms to reach global customers cost effectively. There is a clear trend to leverage B2C 3PLs for managing the deliveries and returns to diverse geography customers cost effectively.
Retailers selling online strategically
Retailers are using a mix of internal and external strategies to stave off completion from other eCommerce players like marketplaces and eTailers. These are:
Technology challenges include integration to multiple marketplaces, Real-time view of inventory, integrations with 3PLs to cost effectively deliver or to create special purpose warehouses for eCommerce fulfillment.
Growth of B2B eCommerce
B2B Commerce is expected to grow to US$ 1.2 Trillion revenues by 2020. B-to-B buyers prior experiences with B-to-C digital commerce are creating high expectations for those buyers when making online B-to-B purchases i.e. customers rely regularly on the Web to research and buy from their favourite retailers, expect to be able to do the same when they show up at work and go about restocking the office supplies, storage room or maintenance shop.
Impact of Internet Retailing on Supply Chain Processes
In a traditional Supply chain, goods move from a factory warehouse to international warehouses, distribution centers throughout the world and directly to the stores. Typically the international warehouses handle huge pallets of single products that have to be unpacked and shipped to their respective destinations.
Now, if a retailer wants to ship each product/pack of products directly to the customer, the easiest way to do that is from the store. To cost effectively do this, it is necessary to develop supply chain processes suited for the online customer and to have warehouses either demarcated for eCommerce deliveries or special purpose vehicles be created. It is recommended that Retailers and CPG companies set up separate eCommerce fulfillment hubs or work strategically with 3PLs focused on eCommerce fulfillment.
Impact on choice of IT Systems Choose a WMS system Designed for eCommerce Fulfillment
It is critical to choose a WMS (Warehouse Management System) designed for eCommerce fulfillment. Some of the key features to pay attention include:
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