Common customer expectations, what’s important, third-party logistics, your distribution strategy, and changing solutions for changing businesses.
E-commerce has outgrown its ‘infancy’ and is rapidly moving into second-stage maturity. At the core of this stage is an effective e-commerce supply chain that can constantly evolve and adapt to solve the challenges posed by this fast-growing business channel.
To help companies understand the imperatives for capturing business value, DHL Supply Chain conducted a global survey on the evolution of e-commerce supply chains in the B2B and B2C markets. The survey captured the opinions and insights of nearly 900 decision-makers responsible for logistics/supply chain management and e-commerce distribution strategy across the globe. Respondents hailed from all the major industry sectors, including retail, consumer goods, life sciences, high tech, auto and engineering & manufacturing.
Whether you’re a B2B or B2C outfit, there’s one thing you’ve definitely got – customers. And though they may be the same people, their expectations are an ever-changing phenomenon. What used to be acceptable no longer cuts it in the modern world (outside of COVID-19, of course). Shoppers expect instant gratification – well, next day gratification, and same-day for a fee – and it’s now on companies to meet this standard. We asked B2B and B2C e-commerce retailers if they’d been able to fully implement their e-commerce strategy, and only 38% of B2B owners, and 31% of B2C owners said they had been able to. But what’s stopping them? The top answer was, of course, changing customer expectations.
In simple terms, buyers want their purchase to be ‘painless’. Almost enjoyable, if anything. The perfect customer experience, with perfect customer service. Why? Because assuming you offer the same goods for the same price, purchasing decisions are, with increasing frequency, based on how well businesses meet their customers’ demands. Demands that not too long ago may have been inconceivable – next-day even same-day delivery; real-time tracking; flexible ordering; and simple returns. Remember you can go the extra mile in the delivery itself as well; here are 5 ways to improve customer loyalty with every delivery.
"Same day is king. I need instantaneous satisfaction. That’s the [customer] expectation." E-commerce research interviewee
Over half of respondents in our survey (57% for B2C, 53% for B2B) rated customer service as extremely important, followed by 44% for time-specific delivery options for both B2B and B2C. However, due to these rising expectations, and the growth rate of the companies themselves, issues may be caused within supply chains – after all, how can you offer the boutique service of a new SME when you’re expanding into multiple countries and sectors?
A third-party logistics provider is an outsourced company that can help your business with its logistics. By taking on this responsibility, they can free you up to focus on other aspects of your operations. Many companies choose to partner with a 3PL to help them as they scale - 47% in our survey. From supporting with strategy development and problem-solving, to making sure the supply chain is equipped to deal with demand, 3PLs are your partners for success, and your helping hand when things aren’t going to plan.
As well as their expertise in the supply chain field, 3PLs offer greater flexibility in their distribution network, fulfilment services that can meet varying customer service requirements, and the latest technology and innovation. If you’re serious about shipping, you should seriously consider choosing a logistics partner that matches your ambition.
Balancing cost and service trade-offs is essential for success, and profitability, for your e-commerce store. Beyond cost, which will always be a factor, businesses are scrambling to design and operate supply chains that keep up with, and respond to, new business models, service expectations and technological needs.
Meeting or exceeding these expectations is essential to capturing and retaining customers, especially in an environment where there’s little margin for failure, in any form. From an inventory and distribution perspective, businesses are mixed in terms of how they handle e-commerce orders today and how they will handle them in three to five years from now. Companies are typically using two or more distribution methods today to fulfil their orders, and in the next three to five years, over 50% of the brands we spoke to have plans to make some type of change to their strategy.
But what are the ways ahead? The three main ones are:
However, it’s not a straightforward choice. In fact, of the companies we spoke to, the majority anticipated using two or more methods in the next 3-5 years – 65% of B2C companies, and 73% of B2Bs. This hybrid approach is, in fact, a flexible way of working, especially for organizations that need to scale quickly, sell across country borders, or don’t want to fund the necessary infrastructure investments in-house.
The one constant that can be associated with every aspect of e-commerce today, and as it evolves in the future, is rapid change. This requires highly adaptable, agile and cost-effective supply chains. The solution is not to develop supply chains that meet customer expectations at any cost. The challenge, and what differentiates winners from losers on the e-commerce battleground, is to do both – provide outstanding service while driving profits.
The bottom line: Transformation is necessary for survival at this point – to gain competitive advantage, companies need to do everything right the first time. There is no time for experimentation. The opportunity to gain competitive advantage still exists, but it’s now predicated on avoiding the common resource- and time- wasting mistakes that bog down transformative change.