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Demand Planning: What It Is and Why It’s Important

demand planning

Demand Planning: What It Is and Why It’s Important

Demand planning has evolved to be an integral function of business over the past decade. It addresses the major concerning issue of matching the demand while avoiding wastage. In this article, we will try to cover everything important related to demand planning and why has become so important for business. Before we delve into the details of demand planning, let us understand the concept of demand planning vividly.

Demand Planning: Definition and Concept

As the name suggests, demand planning refers to planning the stock against the forecasted consumer demand. It is a cross-functional process that enables businesses to always have the necessary stock of products while minimizing excess inventory and avoiding supply chain disruptions. It is a continuous process that forms an important function of a business. The constant improvement in technology has made this business function possible. However, its accuracy is still not dependable.

Demand Planning Vs. Demand Forecasting

Often the two are used interchangeably but they differ in their scope and function. Demand forecasting is only a part of the supply chain demand planning process. Demand forecasts are usually done for a specific period of time that varies for different organizations. The demand forecasting process lays the groundwork for the crucial process of demand planning.

Demand Planning: Process

Demand planning is done through close observation of sales, seasonality data, historical sales, and consumer trends. This assessment enables the business to meet customer demand in an efficient manner. In order to achieve accurate results, businesses use statistical forecasting. In statistical forecasting, statisticians use historical data to generate supply chain forecasts using various advanced statistical algorithms. Data-backed forecasts in demand planning help to avoid stock-outs or overstocks while ensuring customer satisfaction.

Each business has different demands and hence demand different algorithm. In order to select the best algorithm for a business, the statisticians have to try different algorithms to see which forecast is more accurate by reviewing each model’s accuracy and bias measures. With the help of statistical forecasting, demand planners can easily identify outliers and exclusions that are based upon user-defined parameters that include standard deviation or the interquartile range.

Demand Planning: Significance

The most important function of demand planning is to strike the right balance between customer demand and stock inventory. This is imperative for delivering customer satisfaction and thereby filling the sales funnel of the business. Although the function of demand planning is very crucial, it is very difficult to achieve accurate results. The complexity associated with demand planning is due to the fact that it requires coordination across the entire organization.

Excess inventory not only blocks the working capital of the business but also adds inventory carrying costs that could otherwise be utilized towards buying fresh stocks or developing the technologies used in the business. On the other hand, a shortage of stock supply can lead to backorders, hasty buying of costly raw materials, and most importantly a bad image of the organization. Shortage of stock is one of the most prominent causes of customer dissatisfaction that can adversely affect the goodwill of the organization.

Demand Planning: Procedure and Best Practices

Demand planning is as complex as it is important for the business. It is a multi-level process that involves speculation and good analytical skills. To make you understand things better, we have broken down the entire process into simple steps.

1. Defining and Collecting Relevant Data

The first and most important step is understanding the data that would be relevant in forecasting the demand. The data is subjective to the nature of business and the scope of its operations. For this, the planners discuss the data with the internal sales and marketing team about the timing of price changes, marketing campaigns, and promotions that could affect demand.

2. Utilizing External Data

Now that your internal database is ready, the next step is to collect the relevant external data. The external data could include metrics regarding the recent performance and delivery timelines of suppliers and distributors and the latest purchasing habits of your key customers. Other factors include the economic conditions that can have a bearing on the demand and sales of your product.

3. Analyze Demand Forecast

After collecting and analysing the internal and external data, professionals decide upon the most appropriate forecasting model that is relevant to your business. After a model is decided, the next step is to determine how much inventory is needed to fulfill the forecasted demand.

4. Measure Results

The final step is to measure the results against the forecasted demand. This step is very important to ensure that you are able to plan the future forecast accurately. For measuring the results, demand planning professionals identify the Key Performance Indicators(KPI) that help you determine the efficiency of your planning.

Your Takeaway

Now that you know the importance and other nuances of demand planning, it is just about time that you invest in a good team that can ensure a smooth flow of supply.

delivery

Has COVID-19 Changed the French Food Delivery Market Forever?

The French food delivery market is hugely lucrative, worth €180 billion and growing. Food makes up 20% of our manufacturing output, highlighting its economic importance.

The market was flipped on its head during the COVID-19 pandemic, which saw restaurants, cafes, and bars close their doors and demand for deliveries rise.

Electrix, a producer of coffret électrique encastré for the food industry, explores how the pandemic has changed consumer needs and how the market could look in the coming months.

Our Changing Food Delivery Habits

The COVID-19 pandemic has changed the world. As businesses closed their front doors and we were confined to our homes, consumer behavior changed.

People were forced to turn to online shopping for non-essential items, but many also began to shop online for critical supplies, like groceries. Takeaway food deliveries increased as people sought comfort in delicious restaurant food at home. 29% of French households were already getting meals delivered to their home regularly, which naturally increased when we were unable to go out.

We were seeing a shift towards eating out before the pandemic. In 2019, there was an 8.5% increase in people eating outside the home, whether that was in bars, restaurants, or cafes. 48% of people said this was the activity they were most eager to get back to, scoring it higher than seeing family and friends or attending events.

Fast Grocery Delivery will Become the Norm

Demand for grocery deliveries rose as people sought to avoid contracting the virus in shops. Stores struggled to keep up with this demand initially, but they soon adapted. Because of this huge response, we’re now seeing companies offer grocery deliveries in as little as 15 minutes across the country. Interestingly, this activity reached a new high in Europe in the first quarter of 2021 rather than during the first lockdown.

Cajoo, the first French company to offer immediate grocery deliveries, put itself up for sale as its competition rose quickly. It went from being an innovator to one of many businesses offering the same services in an instant, so high is the demand for fast food shopping deliveries.

It’s important to note that these operations are expensive and require multiple locations. Cajoo committed to paying its drivers a salary, while we’ve seen other providers cut delivery costs in order to remain more profitable, which can impact driver earnings. One thing is for sure – fast grocery delivery is here to stay.

Will People Dine out More Again?

While lockdown restrictions have eased, capacity in restaurants, bars, and cafes is still limited as the vaccine rollout continues. We know that eating out is the activity the French public has missed the most during the lockdown, but we’re seeing mixed results on people returning to restaurants.

In December 2020, a survey was released on our intentions to dine out after lockdown restrictions were eased, and the results were surprising. 51% of respondents said they intended to dine out less than usual, while 35% said they’d do it as much as they had prior to the pandemic. While many restaurants have been fully booked since reopening, the hospitality industry union UMIH has estimated that the recent introduction of green passes could reduce visitor numbers by 15–20%.

It’s clear that we’re taking precautions as France continues its roadmap out of lockdown. While visits to restaurants after the easing of restrictions exceeded 2019 levels by 50%, consumers are currently dining out less. We expect this trend to continue in the coming months because of the backlash to the COVID pass, despite the fact that dining out is a much-loved activity in the country.

Fast Food Delivery will Get More Competitive

As people ordered more fast food through the pandemic, delivery services increased fiercely. Uber Eats has long dominated the takeaway delivery market in France, but we saw Deliveroo triple its subscribers by offering unlimited deliveries for a small initial fee of 1€, rising to only 5.99€ at the end of 2020.

When France fully exits from lockdown restrictions – whenever that may be– we may see a decline in fast food delivery orders. The pandemic increased competition between the providers of these services as they looked to capitalize on increased demands, but we may see even more discounts as spend in this area inevitably drops.

A Backlash to Competitiveness?

With competition at an all-time high in the food delivery market, we’re seeing businesses undercut themselves and each other to gain key market shares, such as the low delivery prices offered by Deliveroo. We know that this can impact the earnings of its drivers, so could we also see a backlash to this type of ruthless competitiveness? Just Eat, which has a smaller share in the market, hired 4,500 drivers on permanent contracts in order to build and an ethical brand.

Values matter to French consumers, and half wouldn’t continue to buy from a business that didn’t have similar values to them. We could see businesses that take an ethical stance increase their market share.

There’s no doubt that the past 18 months have shifted consumer behaviors in a way we never expected, and this will impact the future of the market. The food delivery market in France is highly valuable, and we’re seeing new trends emerge as a result of our changing habits.

_________________________________________________________________

Sources

https://blog.paylead.fr/the-pandemic-ignites-a-food-delivery-war-in-france/

https://www.statista.com/statistics/1103928/coronavirus-restaurant-visitation-impact/

https://www.la-croix.com/Economie/Restauration-cafes-Le-passe-sanitaire-pourrait-entrainer-baisse-frequentation-15-20-2021-08-09-1201170029

https://www.statista.com/statistics/1242287/restaurant-visits-by-french-covid-19-pandemic/

https://www.bloomberg.com/news/articles/2021-07-22/grocery-delivery-shakeout-pushes-france-s-cajoo-to-explore-sale

https://www.kantarworldpanel.com/global/News/How-the-French-Food-Market-Changed-in-2019

https://www.eurostartentreprises.com/en/business-advice/five-reasons-you-should-start-a-food-business-in-france

https://sifted.eu/articles/food-delivery-startups-europe/

https://santandertrade.com/en/portal/analyse-markets/france/reaching-the-consumers

https://www.eurostartentreprises.com/en/business-advice/five-reasons-you-should-start-a-food-business-in-france

https://blog.paylead.fr/the-pandemic-ignites-a-food-delivery-war-in-france/

https://www.france24.com/en/france/20201125-as-they-reopen-with-fresh-restrictions-french-businesses-rely-on-new-avenues-to-drive-sales

https://dealroom.co/uploaded/2020/06/Food-Tech-Prez-FINAL.pdf

https://www.connexionfrance.com/French-news/Coronavirus-Daily-updates-on-the-situation-in-France

https://www.thelocal.fr/20210518/fully-booked-for-a-month-frances-bars-and-cafes-prepare-to-reopen-after-six-months-of-closure/

https://www.ceicdata.com/en/france/consumer-survey

https://fortune.com/2020/05/20/amazon-warehouse-shutdown-france/

goggles

Anti-Reflective Prescription Goggles to Witness Considerable Demand

Prescription goggles are getting highly popular eyewear among people, who generally use contacts or glasses. These goggles are generally made up of tough polycarbonate and provide features of shatterproof design, better vision, comfort, stability, and many more. Prescription goggles are also specifically designed to be used during various sports and other activities including construction and landscaping. Some of these googles come with anti-fog coating, which prevents fogging and is highly suitable in situations where having a clear vision plays a critical role.

Prescription sports eyewear is witnessing strong demand across swimming, volleyball, diving, baseball, golf, snow sports, and others. With the increase in the number of sports participation and sports events globally, the adoption of prescription glasses is likely to mount considerably in the upcoming years. Global prescription goggles market size is anticipated to significantly grow by 2027.

Polycarbonate goggles demand over plastic glasses

The industry share from the polycarbonate goggles segment is predicted to grow at a notable rate up to 2027, owing to an increasing preference for plastic glasses or lenses. Polycarbonate lenses are lightweight, impact-resistant, and provide protection against UV rays, owing to which they are highly suitable in many applications. These applications include sports goggles, safety glasses used in industrial settings or workshops, space shuttle windshields, helmet visors for astronauts, and others.

Popularity of rimless lens

The rimless lens segment is expected to witness a considerable share in the prescription goggles industry. Rimless lenses are extremely lightweight, less noticeable than the framed glasses, and leaves no marks on the face. These properties are making them highly popular eyewear among corporate professionals, doctors, and students, who are required to continuously wear lenses due to their profession.

AR coated glasses for automotive

The prescription goggles industry share from anti-reflective coating lenses is slated to grow substantially over the next few years. Anti-reflective (AR) coated lenses reduce eyestrains, improve vision, and make eyeglass more attractive. AR lenses are highly preferred in sunglasses, as it eliminates glares from sunlight. Computer glasses are highly adopted among working professionals, employees, students, and computer operators, which help in eliminating eye problems caused by blue light rays.

Prevalence of eye injury in North America

North America’s prescription goggles industry will expand at a notable pace, owing to the presence of corporate sector consumers generating tremendous demand for anti-reflective and rimless lenses. Moreover, the region has a high prevalence of eye problems among employees, which is creating strong demand for polycarbonate lenses.

RxSport, Wenzhou Sunshine Optics, Uvex Safety Group, Speedo, Wenzhou Sunshine Optics, Goggleman, and Essilor, are among some notable makers of prescribed goggles globally. These companies are emphasizing partnerships, mergers, and new product development to enhance their market share and strengthen their presence in the global market.

Recent technological advancements in contacts and lenses have significantly enhanced eye vision even in the low-light and continuous light interference. For instance, the application of modern anti-reflective coatings can eliminate the reflection from lenses and allow 99.5% of light to refract through the lenses and enter the eye for better vision.

logistics

3 Reasons Why it’s Going to Take Longer to Unravel the Current Global Logistics Mess

If you’re involved in global shipping or even a consumer who recently purchased furniture or other bulky items, you’re well aware of the sorry state of global logistics. The pandemic and its knock-on effects have created global shipping chaos and driven astronomical shipping costs. While we are all enduring the consequences, the big question now is when will global logistics return to normal? Will it happen after peak season this year? I am less optimistic about a quick turnaround. Here are three data points that highlight why I believe the current situation will drag on longer than anticipated.

Inventories are way down and retailers want to hold more of it in the future.

The pandemic created a unique situation. Manufacturing and distribution capacity declined, but consumer demand didn’t. Retailers have seen their inventories cut as consumers continue buying, but they cannot replenish their stocks. According to the US Census Bureau, the inventory to sales ratio is down more than 25% since the beginning of the pandemic (see Figure 1).

The chart also shows a general decline over 2 decades in the inventory to sales ratio, which is a testament to retailers and their logistics partner continually improving their supply chain performance. That trend is about to change as many retailers are deciding to hold more inventory as a hedge against greater supply chain uncertainty. So, what does that mean? Retailers will be buying more than what they need in the short-term to build their stocks to larger acceptable levels. This will continue to put more pressure on supply chains and logistics operations—not reduce it—even after the peak season ends this year.

Figure 1: Retail Inventory to Sales Ratio

Inflation is up, but still viewed as manageable and history says it can go higher before stunting demand.

The Federal Open Market Committee (the Fed) just released its revised forecast for inflation. The forecast did rise by 1% to 3.4% for the year; however, that is more than manageable and unlikely to suppress consumer demand as longer-term inflation is being forecasted at 2%. In addition, if inflation were to go higher, that wouldn’t necessarily mean that US import volumes would decline and take pressure off the current situation. The last time inflation breached 5%, as it did in May, was in August 2008 when it reached 5.8%. As you can see from the US maritime import chart (see Figure 2), import volumes continued to increase.

Figure 2: US Maritime Import Volume

Source: Descartes Datamyne

The economy continues to reopen and the Fed expects robust job creation through the fall. This is a good news/bad news story. As states continue to relax or eliminate COVID-19 related restrictions, parts of the economy such as restaurants, tourism and other service industries will return to more normal capacity, increasing demand for goods many of them import. The Fed is also predicting robust job growth into the fall. The continued opening up of business will drive job growth and consumer spending as those hit hardest by the pandemic have more cash to spend. Again, more pressure on global supply chains.

The protracted situation means that short-term plans that increase costs but get goods to market may make more sense than waiting for the global shipping situation to get better on its own. However, retailers and other importers should evaluate their supply chains now for the alternate sources and paths their goods take to get to market. This evaluation should take into account the impact that highly concentrated and congested trade lanes have on the risk to fulfilling customer demand. For example, the concentration of manufacturing in countries such as China and the use of ports like LA/Long Beach. We can see today the delays that are happening and it won’t take much to see additional delays at some level with disruptions in the future. Now is the time for importers to engineer the risk out of the supply chain.

personal wipes

Increasing Consumer Awareness Across North America to Influence the Usage of Personal Care Wipes

Personal care wipes have garnered immense popularity amongst the average population owing to the ease of use and convenience. An increase in daily commute and hectic schedules has taken a toll on the personal hygiene of people which is why they are highly inclined towards using personal care wipes for keeping their skins healthy and fresh.

The antimicrobial nature of wet wipes has added more impetus to its adoption amidst the ongoing COVID-19 pandemic, where personal hygiene has garnered importance more than ever. These wipes are used for sanitizing restaurant tables, shopping trolleys, or playgrounds to prevent young children from exposing themselves to harmful germs and bacteria. Also, some wipes have high alcohol content which can prove effective against the SARS COV-2 virus. With the reopening of schools and other public places across the world, the consumption of personal care wipes will witness a significant escalation in usage over the foreseeable future.

Here is a lookout on how the global market for personal care wipes is transforming from 2021 to 2027:

Increasing usage of baby wipes

Baby wipes have been an essential part of families having babies. Enhanced absorbent fabrics of baby wipes help in cleaning the baby skin and reducing bacteria whilst avoiding rashes and skin irritation issues. It has been commonly observed that millennial parents are more aware of the skin conditioning of their babies than their previous generations. Such a rise in consumer awareness has prompted the consumption of baby wipes, leading to a prolific expansion of the business landscape.

The growing debate around flushable wipes

Flushable wipes, although convenient for usage, have not only created huge issues in sewage management but also disturbed the ecology of the planet. The issue is so grave that many governments have imposed bans on the usage of these wipes.  For instance, the UK government banned the sales of flushable wipes in 2018 in a mission to eliminate all plastic waste by 2042. These issues will pose serious challenges for the growth of the business.

However, this growing consensus regarding the environment has encouraged many industry players to come up with a variety of environment-friendly alternatives to flushable wipes. For instance, bamboo dry wipes are biodegradable and are considerably bigger in size than traditional wipes, which makes them easy to adopt for daily use without the concern of choking the sewage system. Such eco-friendly options will open up lucrative growth opportunities for the business.

One of the advantages of using personal care wipes is its ease of availability. Wet wipes are easily available in conventional retail stores. But the COVID-19 pandemic has prompted the average population to avoid visiting physical stores which has paved way for the e-commerce sector’s development and expansion. In addition, increased internet penetration across emerging economies along with the availability of a wide range of products on online portals will bolster the industry growth to a greater extent.

Regionally, the market for personal care wipes has witnessed a significant rise in North America. This growth can be attributed to the rising infant population, which has prompted an ostensible need for baby wipes in the region. Not only that, the average North American population is now becoming increasingly aware about hygiene maintenance and the convenience offered by wet wipes encourages them to adopt it comprehensively.

In short, growing consumer awareness regarding personal hygiene and ease of availability of wet wipes have complemented the growth of the personal care wipes industry.

digital marketing

Why Small Businesses Need to Embrace Digital Marketing

In the last decade, marketing has shifted in a different sphere. With the rise of technology and social media, we got introduced to a new branch of marketing which is digital marketing.

In many ways, digital marketing is no different than traditional marketing. Digital marketing is the use of the Internet to reach consumers.

But digital marketing has replaced most traditional marketing tactics because it’s designed to reach today’s consumers online, and as we know, the digital world is so trendy right now.

Our question is: why should small businesses embrace digital marketing? A simple answer: Because it’s the future. With the rise of social media, digital marketing is a new trend.

If you’re not sure how to do this, we are about to give you some of the most efficient tips and tricks that will for sure grow your business.

So, let’s dive in. How to make a business rise in digital marketing:

 

1. Make a strategy

Before even starting with anything, it is a good habit to make a strategy and know what you are expecting for your business, whether it is a new, a small, or a big one. Strategies are what keep your business on track and always evolving. Also, social media strategies are what make your business pop up more, and we will talk about this later on.

2. Make a user-friendly website

Having a website is a good start. But, it doesn’t mean that you cannot succeed if you don’t have a website. However, this section is about those who want to have a website. A good and easy way to build a website is WordPress. We are not sure what your field is, however, WordPress is free and most of the themes there are free. If you want a more customized website you can hire a web developer, or now with the quarantine going on, it is a very smart idea to hire freelancers. Another way is that you can hire a digital marketing company to do all these for you. But, again, this is something you can do yourself, it just needs a little more time.

3. Search Engine Optimization

If you haven’t heard about this, no worries, it is a new technique that digital marketers are using lately. Search Engine Optimization(SEO) is a technique that helps your website rank better on Google by using link building as the main source. However, it is divided into two parts, On-Page SEO and Off-Page SEO where:

On-Page SEO is 30%

Off-Page SEO is 70%

On-Page SEO is mostly focused on the website, making sure that your website has meta descriptions, best titles for crawling, keyword research, h1 tags, etc. Optimizing your website with SEO is a very important step. There are a lot of companies that offer such services, however, if you don’t want to spend your money on this you still can do it yourself, however, it will need some time.

Meanwhile, Off-Page is focused mostly on campaigns, where you need to work on backlinks and link building more. Why is this so important? Because link building is what will get you ranked on Google. More links linked to your website, the more visitors it will bring, and this way Google will rank it higher. Ahrefs is a very good tool to use if you want to track your competitors.

4. Keep track of your competitors

Since we already mentioned that you have to track your competitors, it is important to know the reason why. You need to track your competitors to see what they are doing, and be better than them! If you have very big competitors, it doesn’t really matter that you are a small company, use it as an advantage to get inspired and become better than them.

What are some of the benefits of digital marketing?

Benefits of digital marketing:

1. It’s free

Promoting your business on social media is mostly free. Because social media apps are free. However, if you want to promote it in a more advanced way then you have to pay for the ads. But, we would advise you not to because with the right social media advertisement you can attract as many clients as you want. We also need to mention that it is cheaper than traditional marketing.

2. You connect with your customers more

By using social media, you get really close to your customers and you get to know what they like and dislike more. This way, you get to hear their feedback even in a closer way. If they don’t like something, you will know right away, and then you will make it better!

3. You can reach a bigger audience

As we know, the internet is globally spread and it is used almost in every part of the world. This way, if you are located in North America, you can reach people in Western Europe by using social media. It won’t be a problem to do so because social media does this amazing thing for you. All you have to do is keep track of what your audience loves.

We really hope that we helped you out to start your own business and be in the spotlight with our tips.

e-commerce

Finding Time and Cost Savings in International E-Commerce

If you’re involved with U.S. retail supply chains, you’re likely very much aware of the extent to which the COVID-19 pandemic has accelerated the adoption of e-commerce and shifted the sales dynamic. You are also likely to be equally aware of the supply chain challenges associated with meeting the demands of online orders and the impact on customer service.

The truth is that extended time in transit is expected to continue to be a reality for the foreseeable future even as the international container shortage eases. The sheer volume of goods moving into U.S. ports is causing significant congestion and creating delays in offloading planes and cargo vessels, as well as inland transport. That’s the not-so-good news. The better news is that for those sectors where consumer expectations for delivery times are more moderate, there may be an opportunity for time and cost savings through the recently implemented United States-Mexico-Canada agreement and an even newer program put in place by U.S. Customs and Border Protection.

Meteoric Rise

Before diving into the supply chain relief, it’s worthwhile looking at the sheer magnitude of the change in America’s retail landscape. The numbers speak for themselves. 2020 marked the first year in which e-commerce sales grew while in-store purchases declined. And the growth trajectory was meteoric – an estimated $860 billion was spent by consumers via online purchases, representing a 44% year-over-year increase in online sales. What’s more, a McKinsey study conducted in August 2020 shows 20% of consumers who adopted a new digital shopping method intend to continue using it after the pandemic. The same study shows the move to online shopping is evenly spread out across socioeconomic categories.

All this means that while the current surge in e-commerce activity is undoubtedly being fuelled by rotating lockdowns and an inability for consumers to spend on widely used services, such as entertainment, accommodation, health and wellness, etc., the big shift to online purchasing is here to stay.

A new way of doing business

Yet, even as online sales have served as a boon to retailers looking to keep their businesses afloat while navigating the uncertainty wrought by the pandemic, it also creates a range of new risks and challenges, including a broader competitive landscape, an entirely new approach to marketing and sales, supply chain and warehousing considerations and customer service expectations.

The supply chain crunch

Since the outset of the pandemic, global supply chains have been in a state of disarray – from the production shutdowns in China in the Spring of 2020 to the subsequent sluggishness of the country’s outbound port activity that led to empty shelves in the U.S., to the continued container shortage and port congestion at many key ports, such as the Ports of Los Angeles and Long Beach. Traditional and e-commerce retailers are struggling to get product into the country.

As time in transit has grown significantly over the past year, many consumers have grown accustomed to long delivery times (three weeks or more) for online orders of non-essential consumer products (e.g., apparel and footwear, electronics, household décor, etc.). This represents a potential cost-savings opportunity, particularly for those online vendors facilitating direct-to-consumer orders through overseas suppliers while leveraging U.S.-based fulfillment and distribution centers, which may also help ease overall long transit times.

How to save money and time in transit

U.S. Customs and Border Protection (CBP) is currently testing a new program that allows importers to expedite the clearance of goods that fall within the U.S. de minimis threshold of $800 through an advanced electronic customs filing called Entry Type 86. The program was put in place to help CBP streamline the import of individual consumer goods while maintaining strong security and other government department requirements.

Entry Type 86 falls under Section 321 de minimis and expands the categories under which goods can enter the U.S. with an informal customs entry. In addition, using Entry Type 86 means goods usually receive advanced clearance, reducing customs processing time at the port of entry. Moreover, Entry Type 86 does not demand the same calibre of administrative documentation normally required for goods regulated by Partner Government Agencies (PGAs) that don’t qualify for release through the Section 321 manifest process. As such, businesses importing regulated goods that fall within the $800 de minimis threshold can leverage Entry Type 86 instead of having to do a formal customs entry. This further reduces the administrative burden and hastens the processing of de minimis goods entering the U.S. via Entry Type 86.

To make the most of Entry Type 86, importers would shift the destination of their imports at the time of customs clearance from an Express Consignment Carrier Facility (ECCF) where e-commerce goods are typically processed to a Container Freight Station (CFS) bonded warehouse. While processing via ECCF can expedite clearance because a customs official is on site to clear goods, the process is quite costly. Entry Type 86, however, removes the need for a customs officer to be on site as the goods are cleared before their arrival through the advanced electronic customs filing. The outcome is expedited clearance at a lower cost.

Niche opportunity

Because Entry Type 86 is relatively new, the vast majority of businesses are unfamiliar with the process. Businesses looking to take advantage of Entry Type 86 should take the time to evaluate what is required and make the necessary investments to facilitate the process. In many cases, this will require working with a third party to reconcile what technology and operational changes are needed to ensure proper use of Entry Type 86 from a technological and administrative standpoint.

Northern Relief

By shipping goods into a Canadian port and having goods repackaged for final delivery through a bonded warehouse in Canada that has close proximity to the U.S.-Canada border, and then transporting the goods by ground freight into the U.S. using a Section 321 filing, U.S. online retailers have the opportunity to reduce overall time in transit as the Canadian ports may be less congested.

Moreover, the use of an e-manifest allows for imports to be processed far more seamlessly than a formal customs entry, reducing the possibility of goods getting delayed at the point of customs entry and expediting overall time in transit. In addition, routing through Canada – a USMCA trade partner – allows U.S. importers to still take advantage of the duty and tax savings associated with the U.S.’s generous de minimis threshold. In other words, routing through Canada offers the possibility to U.S. importers of achieving savings in both time and cost.

However, there is the touchy issue of Section 301 tariffs on China-origin goods, which have frustrated retailers in the U.S. since the onset of the U.S-China trade war in 2018. While imports that fall within the de minimis threshold have thus far been exempted from Section 301 tariffs, a temporarily shelved proposal being reviewed by the Office of Management and Budget has the potential to change all that. The current administration of U.S. President Joe Biden is still crafting its policy on China and leveraging allies to put pressure on Beijing to change its economic policies. That policy could include broadening the scope of U.S. tariffs on China-origin goods, including tariffs on goods that fall within de minimis. As a result, enterprises and/or their distributors looking to take advantage of Section 321 and Entry Type 86 should partner with an organization that closely watches regulatory changes and apprises them of those changes so they can pivot accordingly.

The long and short of it

Entering into or significantly expanding e-commerce represents a significant set of challenges to businesses, much of which is related to supply chain and distribution headaches. Looking for ways to reduce time in transit or find cost savings where time savings aren’t possible will be critical not only during the shutdown period of the pandemic but well into the future as the online landscape becomes more competitive and puts downward pressure on margins.

___________________________________________________________________

Jill Hurley is a U.S.-based director of global trade consulting at Livingston International. She brings a wealth of expertise in the development and implementation of import/export compliance programs, compliance audits, export licensing requirements, supply-chain security, the preparation, submission and oversight of penalty mitigation projects and assistance with U.S. trade remedies, such as anti-dumping and countervailing duties, and intellectual property orders.

Michael Zobin is a Canada-based director of global trade consulting at Livingston International. His expertise includes supply-chain optimization; duty deferral and drawbacks; conducting compliance program reviews; developing compliance procedures; voluntary disclosure; and post-entry review.

online shopping

UNCTAD SAYS COVID-19 HAS CHANGED ONLINE SHOPPING FOREVER

“COVID-19 and E-commerce,” a United Nations Conference on Trade and Development (UNCTAD) report, finds that the novel coronavirus “has changed online shopping forever.”

Netcomm Suisse eCommerce Association partnered with UNCTAD, in collaboration with the Brazilian Network Information Center and Inveon, to create the “COVID-19 and E-commerce” report. Based on a survey of about 3,700 consumers in Brazil, China, Germany, Italy, the Republic of Korea, Russian Federation, South Africa, Switzerland and Turkey, the report concludes that the pandemic has forever changed online shopping behaviors, greatly accelerating the shift to a more digital world

The greatest shift in this regard, the survey shows, is among consumers in emerging economies. 

“The COVID-19 pandemic has accelerated the shift toward a more digital world,” Secretary-General Mukhisa Kituyi says in an UNCTAD statement. “The changes we make now will have lasting effects as the world economy begins to recover.”

Kituyi added that the acceleration of online shopping globally underscores the urgency of ensuring all countries can seize the opportunities offered by digitalization as the world moves from pandemic response to recovery.

Mixed messages 

The survey shows that online purchases have increased by 6 to 10 percentage points across most product categories, with the biggest gainers being the ICT/electronics, gardening/do-it-yourself, pharmaceuticals, education, furniture/household products and cosmetics/personal care categories.

However, average online monthly spending per shopper has dropped markedly. Consumers in both emerging and developed economies have postponed larger expenditures, with those in emerging economies focusing more on essential products.

No surprise: Tourism and travel sectors have suffered the strongest decline, with average spending per online shopper dropping by 75 percent.

“During the pandemic, online consumption habits in Brazil have changed significantly, with a greater proportion of internet users buying essential products, such as food and beverages, cosmetics and medicines,” said Alexandre Barbosa, manager of the Regional Center of Studies on the Development of Information Society at the Brazilian Network Information Center.

Increases in online shopping during COVID-19 differ between countries, with the strongest rise noted in China and Turkey and the weakest in Switzerland and Germany, where more people were already engaging in e-commerce.

The survey found that women and people with tertiary education increased their online purchases more than others. People aged 25 to 44 reported a stronger increase compared with younger ones. In the case of Brazil, the increase was highest among the most vulnerable population and women.

Also, according to survey responses, small merchants in China were most equipped to sell their products online and those in South Africa were least prepared.

“Companies that put e-commerce at the heart of their business strategies are prepared for the post-COVID-19 era,” said Yomi Kastro, founder and CEO of Inveon. “There is an enormous opportunity for industries that are still more used to physical shopping, such as fast-moving consumer goods and pharmaceuticals.”

“In the post-COVID-19 world, the unparalleled growth of e-commerce will disrupt national and international retail frameworks,” said Carlo Terreni, president, NetComm Suisse eCommerce Association.

“This is why policymakers should adopt concrete measures to facilitate e-commerce adoption among small and medium enterprises, create specialized talent pools and attract international e-commerce investors.”

The survey results suggest that changes in online activities are likely to outlast the COVID-19 pandemic. Most respondents, especially those in China and Turkey, said they’d continue shopping online and focusing on essential products in the future.

China’s speedy recovery gets noticed

“Global Trade Update,” a separate UNCTAD report, highlights China’s notable trade recovery. The country’s exports, after falling in the early months of the pandemic, stabilized in Q2 2020 and rebounded strongly in Q3, with year-over-year growth rates of almost 10 percent. Contrary to other major economies, Chinese imports stabilized in July and August and grew by 13 percent in September.

Other key trade trends include the following:

-Exports from developing countries have fared better than those of developed nations. Year-on-year growth of developing economies’ exports improved from -18 percent in Q2 to -6 percent in July, while those from developed nations increased from -22 percent to -14 percent.

-No region was spared from the fall in international trade in the second quarter of 2020, but the sharpest decline was for the West and South Asia regions, where imports dropped by 35 percent and exports by 41 percent. As of July 2020, the fall in trade remains significant in most regions except for East Asia.

-The value of international trade in the energy and automotive sectors remains substantially below its levels of 2019. On the other hand, increases in demand for home office equipment and personal protective gear has resulted in strong growth rates for trade in the sectors of communication equipment, office machinery, and textiles and apparel.

COVID-19 and Medical Supplies

The report gives special attention to COVID-19 medical supplies (personal protective equipment, disinfectants, diagnostic kits, oxygen respirators and other related hospital equipment). Key findings include the following: 

-Trade in COVID-19 medical supplies has grown by an average of more than 50 percent since April 2020, but the increase in such trade has primarily benefited residents of wealthier nations.

-Since the outset of the pandemic, each resident of high-income countries has benefited on average from an additional $10 per month of imports of COVID-19 related products, compared with just $1 for people living in middle-income countries and a mere $0.10 for those in low-income countries.

-Overall, per capita imports of medical goods essential to mitigate the pandemic have been about 100 times higher for high-income countries than for low-income nations.

UNCTAD highlights that the difference in access to a potential COVID-19 vaccine for residents in wealthy and poor countries could be even more drastic than for medical supplies. While some low-income countries have the capacity to locally manufacture some protective equipment, this may not be the case for vaccines, which require stronger manufacturing and logistics capacities.  

fitness equipment

The European Gym and Fitness Equipment Market Struggles against the Pandemic by Increasing Sales of Home Fitness Goods

IndexBox has just published a new report: ‘EU – Gym and Fitness Equipment – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

After seven years of growth, the EU gym and fitness equipment market decreased by -0.5% to $3B in 2019. The market value increased at an average annual rate of +5.0% from 2012 to 2019; the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period.

The largest gym and fitness equipment markets in the European Union were Germany ($561M), the UK ($468M) and France ($337M), together comprising 45% of the total market (IndexBox estimates). These countries were followed by the Netherlands, Italy, Spain, Poland, Austria, Sweden, Belgium, Finland, Denmark and the Czech Republic, which together accounted for a further 46%.

In 2019, the highest levels of gym and fitness equipment per capita consumption were registered in the Netherlands (3.93 kg per person), followed by Austria (1.93 kg per person), Finland (1.89 kg per person) and Belgium (1.88 kg per person), while the world average per capita consumption of gym and fitness equipment was estimated at 1.21 kg per person.

Gym and fitness equipment features several main uses: private home use for personal training, fitness club equipment for commercial use, professional and amateur sports club equipment, and government and non-government agencies and organizations.

Accordingly, the key fundamental drivers of the demand are, on the one hand, the growth of the population and its income, as well as the trend towards the popularization of a healthy lifestyle. On the other hand, the overall economic growth in the EU and the growth of public and private investments also contribute to the growth in demand.

If these trends continue, the gradual growth of the gym and fitness equipment market could be expected to retain. In early 2020, however, the global economy entered a period of crisis caused by the outbreak of the COVID-19 pandemic. In order to battle the spread of the virus, most of the European countries implemented quarantine measures that put on halt production and transport activity, which undermined economic growth heavily.

Large-scale quarantine measures constitute the key disruptive factor, due to which production dropped across almost every industry and entire economic sectors are closed, such as catering, non-food retail, and personal services. This leads to an increase in unemployment, a decrease in household incomes, and, consequently, changes in consumer spending.

However, the impact of the crisis on the gym and fitness equipment market in Europe is not unequivocally negative, unlike many other markets. On the one hand, quarantine measures and the fear of infection make it much more difficult to visit commercial fitness clubs, which are deprived of funds to pay rent and loans.

On the other hand, the quarantine and remote work regime is causing a sharp increase in demand for fitness equipment for private use. Not being able to visit fitness clubs, many people keep training at home and therefore buy more equipment online with delivery. This suggests that the fundamental prerequisites for the market’s return to growth persist even against the backdrop of the pandemic; however, the surge in the demand for home fitness equipment may turn to stagnation for a while when the pandemic wanes.

Based on these assumptions, a stagnation in market volumes is expected in 2020, but then the market is to begin to grow gradually. Should the pandemic wane, the market is expected to continue its upward trend due to the rising population (incl. immigrants) and stable demand for gym and fitness equipment. In the prospect of the upcoming decade, the performance of the market is forecast to continue moderate expansion, with an anticipated CAGR of +0.9% for the period from 2019 to 2030, which is projected to bring the market volume to $3.3B (in fixed 2019 prices) by the end of 2030.

Source: IndexBox AI Platform

trends

8 Trends Driving E-commerce Innovation

The world of e-commerce has undergone quite a year. And with everything going on in the world, chances are that growth, innovation, and change are what we can expect in the year to come as well.

Global growth or no global growth, you do have to stay on top of the latest trends if you want to stay on top in the world of e-commerce – otherwise, you will find yourself at the bottom of the heap. Let’s take a look at eight trends that are set to continue driving innovation in 2021 and beyond.

Mobile Continues to Be on the Rise

Even though mobile search overtook desktop a long time ago, mobile is still on the rise in every sense of the word. Focusing on the experience your users have when accessing your store via their mobile phones is certainly a trend that will not disappear soon.

Elements to focus on include:

-Speed

-Ease of access

-Ease of navigation

-Safety

-Personalization

A good example of the kind of mobile-first website design we are referring to is the LMNT website. It is super-fast, it is responsive, and it has retained that mobile-friendly design on the desktop version as well, providing more cohesion.

image source: drinklmnt.com

Voice Search Is Also Important

By 2025, it is predicted that 75% of US homes will have a set of smart speakers. And while voice search is currently still a bit of a dark horse for some users, Alexa, Siri, and Amazon Echo are slowly becoming a daily part of many lives.

What you as an e-commerce store owner can do is optimize for voice search, and enable your visitors to execute voice-based search commands and navigation on the website (or at least on its mobile version).

This will be a significant investment, and you may be able to hold off on it for a while. However, if your target market is among the population that is already heavily relying on voice commands, the time is now.

Personalization as the New King of Marketing

Shoppers have always responded better to offers that were tailor-made for them. Think of personalized letters in the snail mail, or calls from sales assistants who have reviewed your loyalty card with a brand and know what kinds of products you like to purchase.

Today, with the rise of AI, e-commerce is heavily relying on data-driven personalization. You can now know more about your visitors and their behavior online than they themselves know about themselves. This leads to a bit of a safety and trust issue, but also provides an incredible shopping experience.

The more you can tailor your ads, offers, and other marketing assets to a specific visitor, the better you will fare. Especially since other e-commerce brands are already doing it, and doing it well.

Social Commerce Making an Impact

As modern shoppers are spending more and more time on social media, it was only a matter of time before social media and e-commerce merged into one big happy experience.

Social media platforms are mini search engines themselves, and 55% of shoppers are making purchases from a brand’s own social media posts. As plenty of these platforms now allow shopping straight from the post, impulse purchases are on the rise – as are conversion rates.

A brand that has embraced social commerce is Zoma Sleep. This company has enabled their Instagram shop, allowing you to purchase one of their mattresses directly from the image posted on their feed. Never has it been this easy to get something delivered straight to your door.

image source: zomasleep.com

More Payment Options are Becoming Available

Not too long ago, there was the option of paying for an online purchase via credit card, when PayPal and Stripe were still distrusted as a scam. Today, we have hundreds of ways to pay online, from cryptocurrency to wire transfer.

Customers are expecting different payment options more and more – especially since all the biggest e-commerce names have allowed for them (think Amazon).

If you are insisting on one (or two) ways to pay, you are likely missing out on some serious traffic, and you’ll need to consider adding more options as soon as possible. However, remember that you should first focus on the security of your store, and only then allow new payment options – they will not matter one bit if your data storage is hacked.

Dynamic Pricing Is Here to Help

It can be very difficult to keep track of all the fluctuating prices in your niche and industry. After all, in order to remain competitive, you need to be able to adjust your prices when and if needed – and to be able to do that, you need to keep track of the prices of your competition.

Tools like Aura are here to help you out – if you are using Amazon as a marketplace. On the other hand, if you are using Shopify, you can also benefit from a dynamic repricing tool that will automatically keep track of the prices you set and alert you when a change needs to be made (or make the change for you).

The Importance of Order, Purchase, and Inventory Management Automation

In the world of e-commerce, automating as much as you can is sometimes what sets you apart from your competition. And while they are busying themselves with the tasks you have automated, you have the time and resources to devote your energies elsewhere.

One of the key processes you should be automating is the management of your orders, purchases, and inventory. This can easily be done with a tool like InFlow that will keep an eye on your orders and inventory, alerting you to every important change – while you grow your business.

B2B Is Also on the Rise – Again

The B2B e-commerce market is expected to reach $1.1 trillion in 2021. As more of these businesses are moving online, you need to take into account how B2B buyers like to be charmed. Working in a B2B environment is different from working in B2C – at least in the world of e-commerce.

What you need to take into account is that millennials are becoming the new B2B buyers – so marketing for them is key. You also need to remember that Gen Z is also starting to make their mark on the workplace, and they do need to be treated differently.

Think in terms of simpler solutions, better user experience, more self-serve options, and providing all the information they need to make a purchase without them having to contact your sales team.

Final Thoughts

Trying to stay on top of all of these e-commerce trends might prove to be a challenge. However, if you manage to focus on the ones that pertain to your target audience the most, you’ll be able to greet the coming year well-prepared.

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Karl Kangur is the CEO of Result Compass