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5 WAYS A LACK OF REAL-TIME INVENTORY VISIBILITY IS HURTING YOUR COMPANY

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Archives, Global Logistics, Global Trade Daily, Warehousing

5 WAYS A LACK OF REAL-TIME INVENTORY VISIBILITY IS HURTING YOUR COMPANY

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If you’re not combining barcode scanning and data collection technology with your ERP software, you’re inevitably going to pay more in labor costs, excess inventory, and errors.

Real-time inventory data is increasingly seen as the lifeblood of eCommerce and omnichannel commerce initiatives. With customers demanding high levels of visibility into inventory status before, during, and after every transaction, companies have to know what’s in stock, what’s in transit, what’s being returned, and when they need to re-order.

Inventory has to be accurately tracked, or it can negatively impact warehouse operations, fulfillment, receiving, and customer service. However, according to some estimates, nearly half of small and midsize businesses don’t track inventory at all or use manual methods. A recent Zebra Technologies study found that nearly 40 percent of companies still aren’t using mobile computers or mobile barcode scanners.


 

Managing inventory without real-time barcode scanning is only going to get more difficult as companies expand their SKU count and increasingly process larger numbers of smaller orders that are typical of e-commerce and omnichannel operations. As the number of inventory mistakes increase, they can have a ripple effect across the entire business.

“When companies don’t have inventory visibility, it can cause various problems.”

– Brady Stevens, Project Manager at Global Shop Solutions

“For example, they may run out of product and not discover the problem until they’ve already completed an online sale. Now, they’re missing delivery deadlines and will likely have to follow up with customers and offer make-goods. It can lead to profit losses at best, and often leads to customer losses as well.”

NO BARCODING, NO VISIBILITY

Here’s an example of a typical scenario of a company using an ERP system without mobility or barcode scanning: A warehouse worker uses a paper document (i.e., picklist), which lets him know where to find specific products for an order. The worker picks all the parts (kitting) and then walks to a work station to confirm the job has been completed. After that, the order is ready to be shipped.

There are a number of things that can go wrong in this process without real-time visibility, and they all have a cost:

1. Unnecessary Labor Costs: Without using barcode scanners, there’s a lot of time wasted typing information into the computer when employees retrieve their picklists and then confirm that they have picked all of the necessary items to fulfill the order.

If there are mistakes, then at least some of that labor is duplicated as workers return to the bins to pick the right items and then re-key the order information. The longer it takes an employee to process a single order, the more employees you’ll need to keep up with increasing volumes. Scanning accelerates the data collection and entry process.

2. Data Entry Errors: Manual data entry always leads to errors. Once those errors are in your software systems, they create inventory inaccuracies and shipment mistakes that can be difficult to spot and correct. With barcode scanning, all of the data entry is automated and initiated by the barcode label; there’s no opportunity for mis-keying a SKU or item quantity.

3. Picking Errors: Picking errors can cost a company tens of thousands of dollars per year. In industries that handle more expensive goods, the cost can be even higher. Picking and putaway are rife with opportunities for mistakes – employees can inadvertently pick the wrong item, pick the wrong number of the right item, put inventory in the wrong location, or make data entry or counting errors during physical inventories.

Barcode scanning and mobile computing can eliminate most of these problems by providing real-time confirmations that the correct SKU has been picked and in the right quantity.

4. Excess Inventory: Without accurate inventory data, most companies over-compensate for their lack of visibility by increasing inventory. This is a costly investment, as it not only results in unnecessary purchases and higher inventory costs, but also an increase in obsolescence.

With extra inventory, there are also more write-offs and write-downs, which can cut into profitability.

5. Lack of Visibility: Knowing how much inventory you have and where it’s going doesn’t just affect your ability to ship accurately. Without accurate, real-time inventory data it’s almost impossible to determine key performance indicators (KPIs) like on-time shipments, perfect order percentages, out-of-stocks, etc. This data is necessary if you want to make any kind of performance improvements ― it helps create a baseline and makes it easier to identify problem areas in your inventory processes.

PERFECT YOUR INVENTORY MANAGEMENT

The data created through mobile barcode scanning can help determine where the bottlenecks are in your inventory management operations, as well as identify where mistakes are being made and how well you’re performing against your customer expectations and your own internal goals.

If you haven’t deployed mobile barcode scanning to help track and manage your inventory, you are likely absorbing unnecessary costs and risks created through wasted labor, excess inventory, and picking/shipping mistakes that can ultimately result in lost customers.

To learn more about how you can take advantage of the cost-saving benefits of barcode scanning with Global Shop Solutions, check out this webpage.

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Eric Sutter is a business development professional with more than 20 years of experience in barcoding, building solutions for asset tracking and warehouse management across a wide range of vertical markets. Sutter founded EMS Barcode Solutions on the premise that customers need more than data collection devices and software— they need solutions. By combining and integrating components such as mobile computers, software, labels, and ribbons with professional services, EMS delivers solutions that provide its customers with a tangible return on their investments.

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3pls, Archives, Global Logistics, Global Trade Daily

Top 7 Logistics Challenges Facing the Industry

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Few industries have as much impact as logistics. In a way, it keeps the world economy going. Manufacturers, retailers, farmers, and even service providers all depend on it. But even though it plays a significant part, there are still plenty of logistics challenges facing the industry. Today, we’re talking about the seven of the biggest ones.

Now, there are numerous reasons why things got so tough in the last couple of years. Consumers’ expectations are shifting, and technology advances and new regulations are constantly coming out. On top of that, the COVID-19 pandemic didn’t make it easier.

Of course, all these issues bring an opportunity for growth and improvement. If you can find a way to overcome the challenges, you can be sure that you’ll capitalize on that. Here’s what you should pay attention to in the following year.

1. Cutting Transportation Costs

We can safely say that this is the single biggest problem in the industry at the moment. In some cases, the transportation costs come to reach 50% of the value of the product. Still, the demand for shipping companies is rising almost as fast as the fuel price. There’s plenty of work, but it seems that there’s not enough money to go around for everyone.

Many retailers and distributors are choosing to let just one or two shipping companies take care of their complete transport. Their reasoning is simple — if you’re shipping more with one carrier, you can get better rates. And while all that is true, you have to trust one company with your entire stock. Imagine what you’d have to go through if there’s a week’s delay.

2. Meeting Consumer Expectations for Visibility

Due to companies like Amazon and Walmart, customers nowadays want to know where their shipment is at any given moment, as well as when they can expect it to arrive. And things aren’t much different if we’re talking about transport visibility in B2B. As a matter of fact, the problem is even more complex.

To meet all of their demands, you need to improve the visibility across your entire supply chain. You should be able to track each of your shipments and maintain constant communication with the drivers. However, you also need a real-time alerts and notifications system. It allows fleet managers and drivers to make prompt decisions if any issues occur.

3. The Shortage of the Drivers

The next of the logistics challenges facing the industry that we want to talk about is driver shortages. These are demanding jobs, and it seems that at the moment, there just aren’t enough drivers to fulfill the needs of the industry. There are also these government regulations that force companies into being more strict about hiring their drivers.

Hence, the recruiting process is long and expensive, and it’ll stay like that for a while. There’s not much you can do but follow the rules. On the other hand, you can optimize the routes your drivers are following and stretch the capacity that way. It’ll give you at least some leverage.

4. Getting Sustainable

Carbon emission reduction is more important today than it ever was. The public wants to see environmentally-friendly practices in the private sector, so governments have to push it.

Although this isn’t bad on its own, it’s putting a lot of stress on logistics companies. And if you’re at the front of one, you must act quickly, but luckily there are plenty of things you can do to make your logistics more sustainable:

-Adopt route and load optimization

-Upgrade your engines

-Track and report emissions

-Use alternative fuels

Going down any of these paths won’t be cheap, but it’ll pay off in multiple ways.

5. Improving Cooperation With Your Partners and Suppliers

If you want your transport and logistics company to be successful, you must talk to your partners and suppliers and get to agreements that benefit all of you. They must be satisfied with your service, and you must be happy with theirs. It sounds like common sense, but at the end of 2021, we feel like we need to stress it.

You should all understand the state of the market and the moment and get on the same page. If you support and help each other now, many new improvement opportunities will open up in the future.

6. Adopting New Technologies

As we already mentioned, logistics companies already need to start adopting new and innovative technology solutions. They help you increase productivity and reduce costs in the long run. And we’re already at the stage when things like warehouse management systems are becoming non-negotiable.

However, with so many options available, it’s hard to pick the right one. Don’t rush it, and consider all your unique business operations before you make a decision.

7. Grappling With the New Way of Doing Business

It’s clear to all of us that the COVID-19 pandemic brought plenty of challenges to the game. However, some of them are here to stay, and some we didn’t even see yet. Changes are happening all across the industry, and it’s difficult to predict what will be the next big thing.

So, we’ll say that the final of the logistic challenges facing the industry is that you can’t be sure what to expect. And with that in mind, making your processes as flexible as they can be is the best way to go.

_________________________________________________________________

Harper Mullins is a logistics specialist and a passionate freelance writer. At the moment, he’s working with Fit 2 Move on improving their storage and transport capabilities. He uses his free time to read every book he can get his hands on. 

enterprise marketplaces
Archives, Global Logistics, Global Trade Daily

10 Reasons to Embrace Enterprise Marketplaces

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Sellers must think strategically to unlock the power of these powerful new ecommerce technologies.

The pandemic sparked a surge in online selling — and not just by DTC brands serving customers while they were hunkered down at home. The B2B digital commerce space has also seen massive growth over the past two years, a trend that has only been accelerated by the rise of enterprise marketplaces.

What is an enterprise marketplace? Well, we’re all familiar with online marketplaces such as Amazon, Etsy, or eBay that focus solely on connecting buyers and sellers. An enterprise marketplace does much the same, but it’s typically run by an organization that wants to sell its own products and services to customers, and creates a marketplace to offer complimentary products, strengthen its partner networks, or create a better experience for its customers.

The world of enterprise marketplaces is remarkably diverse, including multi-vendor marketplaces, procurement-focused marketplaces, and branded marketplaces. In all cases, though, the enterprise marketplace approach is a powerful paradigm that’s changing the way that organizations sell online. Let’s take a closer look at some of the key benefits that well-run enterprise marketplaces deliver for their operators, vendors, and customers:

1. New revenue streams. Subscriptions, transaction fees, and value-add services or support charges enable marketplace operators to collect revenues without managing their own inventory or building out warehouses. Frankfurt Airport, for instance, invested in an online marketplace, and now collects membership fees from airport retailers who list products and offer promotions to passengers.

2. Customer experiences. Marketplaces are a great way to expand from B2B into B2B2C, or D2C models while still delivering engaging experiences. Andikem, the chemical fulfillment marketplace, achieves this by providing supply-chain transparency and fulfillment efficiency, keeping prices low for buyers.

3. Elimination of pain points. Marketplaces can offer solutions to customer headaches in areas such as supply chain and fulfillment. DOZR set up its WebStores marketplace to address an unmet need by helping construction contractors to rent equipment more easily, and now connects 15,000 suppliers with hundreds of thousands of customers.

4. Smarter procurement. Marketplaces are a perfect solution for complex procurement scenarios, helping buyers such as large companies or government agencies to coordinate across multiple divisions, subsidiaries, or business units while maintaining strict ordering processes. SupplyCore, the logistics solutions company, achieves this with a digital platform that manages complex orders without manual input, enabling customers to track order status from quote to delivery.

5. Streamlined purchasing. Marketplaces can support complex B2B purchasing arrangements, improving efficiency and lowering costs for everyone. Tundra Restaurant Supply, for instance, has built a flexible marketplace that allows it to offer customized experiences, discounts, and free shipping even for big buyers such as Chipotle.

6. Better franchise relationships. Franchise businesses can use an enterprise marketplace model to create a collaborative environment, maintain visibility into franchisor-franchisee relationships, and improve outcomes for customers. French retail franchise V and B does this well: their cloud-first marketplace centralizes inventory and streamlines operations for HQ, franchises, and suppliers.

7. Expanded product offerings. With competition growing, mass-market retailers are increasingly creating marketplaces to grow their product offerings. Walmart Marketplace, Amazon’s biggest US challenger, now uses its 5,000 brick-and-mortar stores as a value-add: vendors get a chance to sell in-store, and shoppers get access to a far wider array of products.

8. Better use of existing assets. Organizations with a large distribution footprint can maximize their assets with a marketplace. Target, for instance, leverages its distribution and store network to power its invite-only Target Plus marketplace, and promotes hand-picked brands across its Target.com and mobile ecosystem.

9. Better product information. Enterprise marketplaces can elevate product presentation — a valuable proposition for B2Bs with large SKUs and complex offerings. PartsBase, the world’s largest aircraft parts marketplace, delivers value by maintaining detailed product information for 15 billion parts spanning 100,000,000 inventory lines.

10.  A stronger ecosystem. Businesses with large partner networks can use marketplaces to centralize and enable collaboration. Toyota Material Handling achieved this by gathering over 200 certified dealers on its platform, delivering a more engaging partner experience and ensuring a better product selection for end-users.

Think strategically

Unlocking these benefits doesn’t happen all by itself. Organizations need to think strategically about their enterprise marketplaces in order to get the most bang for their buck.

That starts with building out the operational infrastructure you need to succeed, including clear purchasing processes, fulfillment workflows, and payment systems. You’ll also need to communicate clearly with all stakeholders, including your outside partners and your own employees, in order to make sure that everyone understands the strategic goal of the marketplace and is committed to pulling in the same direction.

Operators also need to go into the process of building a marketplace with clear eyes, and an understanding that creating a successful marketplace requires committing serious resources. From building out digital infrastructure to retraining employees and engaging with partners, you’ll need to invest if you’re going to build a successful marketplace — and the amounts needed can be a dealbreaker for brands that aren’t sufficiently mature or ambitious.

Finally, you’ll need to develop the right toolkit. Fortunately, that doesn’t mean building everything yourself: these days, there are a wide range of marketplace management platforms to choose from. Many marketplace tools are designed to support conventional marketplace operators, though, and don’t include the features needed for enterprise operations. Be sure you do your due diligence, and select a marketplace solution that’s designed to support the specific needs of B2B and enterprise operators.

Plan for success

The bottom line is that enterprise marketplaces are changing the way that businesses of all kinds buy and sell online. That’s potentially a lucrative opportunity for operators — including manufacturers, distributors, retailers, franchisors, and even government actors.

The more crowded the enterprise marketplace grows, though, the more competitive the space will become. That means new and existing operators will need a careful and measured strategic approach in order to gain a foothold and build a successful marketplace.

When you’re thinking about the potential benefits of running an enterprise marketplace, then, it’s important to plan ahead. Focus in on exactly what you’re hoping to achieve — and develop the strategy, partnerships, and toolkit you need to achieve your own specific goals.

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Yoav Kutner is the CEO and co-founder of Oro, Inc, which has created OroCommerce, the No.1 open-source eCommerce platform built for distributors, wholesalers, brands, and manufacturers. Yoav previously co-founded and served as the CTO of Magento.

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Archives, Global Logistics, Global Trade Daily, Special Reports

Prep for the Holiday Season with Top E-commerce Strategies

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The most wonderful time of the year…is here. You already know that the holiday shopping season is the most critical period for retailers, both online and brick and mortar. How your business does during the last quarter of the year determines where things land for your bottom line.
 

This year, though, brand and e-commerce marketing managers are facing another wild ride, with uncertainty created by shifting trends. The pandemic brought on a surge in online buying, and many buyers are likely to continue to buy online. In fact, according to September 2021 survey data, consumers are planning a 50/50 split between online and brick-and-mortar buying. The retail giants—Amazon, Target, and Wal-Mart—are already capitalizing on convenience to hold onto their share of wallet.

 

There are other factors, though, to consider. Shopping trends are changing fast. News of supply chain pressures and worldwide shipping delays has spurred many shoppers to buy early or shift their buying behavior — 83% of shoppers intend to start before Thanksgiving this year, in a departure from the norm. In such an unpredictable market at such a high-stakes time of year, business intelligence has never mattered more. This is where the performance analytics platform Line Item can be the lifeline e-commerce marketers need right now to ensure they make the most of the holiday season.As we head into the heart of the 2021 holiday season, here are a few strategies to prepare and protect your digital shelf for the upcoming holidays.

Focus on organic search ranking. Whether they’re buying online or in person, many shoppers start their research online—on a smartphone or a tablet. This is why it’s essential to monitor and improve your online search ranking. Watch where you’re showing up, too. Moving from page 2 to page 1—and even into the top 10 listings—can significantly boost your sales. Improving your organic search ranking depends on visibility into what’s working—or not—for your brand. This is where Line Item can help, with detailed insight into what changes you could make to content, product descriptions, or imagery to affect your ranking in organic search results.

Analyze your paid search strategy. Shoppers are pressed for time, and you have only seconds to capture attention when it comes to search results. The holiday season is the time to invest in a robust paid search strategy, but you’ll want to be sure you understand what product attributes drive value. This is where Line Item can give you valuable campaign-level and product attribute insights. With them, you can better understand what’s driving the market and what your competitors are doing, so you can sharpen your edge and see ROI from a page-1 slot.Ensure your product detail pages are complete. This is a biggie. Incomplete or inconsistent product detail pages can harm you, whether we’re talking about Amazon listings or your own website. Across your e-commerce portfolio, all product detail pages should be complete, correct, and compelling. Line Item can help with this to make sure you aren’t overlooking clear areas or gaps that prevent you from meeting category bestseller benchmark standards.

Evaluate your SEO strategy and campaigns. During this volatile time of year, whims and demand drive the market in unpredictable ways. And that’s during a typical season, which 2021 is anything but. It’s essential to drill down to campaign elements, including CPCs, to ensure you have a read on how changing demand, sudden interest, or seasonality might be driving spend. E-analytics insight from Line Item can help you ensure your campaigns are profitable and that your overall marketing spend ultimately drives return on investment.

Watch out-of-stocks closely. Maintaining optimal inventory is key to profitability. When a customer is ready to buy and your product is out of stock, you lose the sale—and maybe the customer, too. Line Item helps you determine if out-of-stocks are hurting your revenue.

Track pricing. Many retailers are introducing new pricing strategies to drive sales this holiday season. Buy Now Pay Later is one of these, and it can appeal to segments like Gen Z and the unbanked, both of which are more price sensitive. The major retailers have already rolled out BNPL options; some have been in play since 2019. BNPL can affect pricing, so it’s important to monitor this. With Line Item, you can verify item pricing, selling price, and list price across platforms, ensuring that products are priced correctly even with new options like BNPL, and you can easily monitor third-party and competitor activity to protect your brand and products.

Of course, there are other strategies to consider, too—best practices like:

-Ensuring your checkout process is as easy as possible

-Providing access to customer service with tools like live chat, and with quick responses

-Creating engaging content, like gift guides

-Using targeting and segmentation to create personalized email campaigns

-Boosting sales with savvy retargeting

Using updated visuals and copy for featured holiday campaigns, and to ensure your site and product pages have that holiday look and feel, and more

This holiday season may be full of surprises, but your performance shouldn’t be one of them. The right insight can make or break your brand this holiday season, and business intelligence can give you what you need, when you need it. This is where Line Item really stands out as a single platform with insight into shopping trends and behavior, and what your competitors are doing—so you can finish 2021 in the black.

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Archives, Commentary, Global Logistics, Global Trade Daily

More Companies Choose To Outsource – Here’s Why You Should Too

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When it comes to outsourcing, businesses take different approaches based on their goals. Some focus on increasing efficiency, some on lowering the cost of their products or services. whatever the reason may be, outsourcing is becoming more popular than ever due to its many benefits. In this post, you will learn what outsourcing is and why many businesses outsource certain operations, especially on the logistics side of operations.

What Is Outsourcing?

In business, outsourcing is the practice of contracting an external company or organization to provide a product or service that the firm itself would otherwise produce. It has been associated with job moves overseas in recent years, though this is not always the case. Outsourcing can be done in other companies within the same country and isn’t always for fiscal reasons. For example, one of the most famous forms of outsourcing can be seen with Amazon’s Fulfillment by Amazon program. In essence, online retailers will outsource their logistical needs to Amazon to focus on their core business rather than handling packaging, deliveries, and refunds. This is just one form of outsourcing.

Many businesses are finding that they need to use sophisticated technology to scale their business to new heights. However, this is often easier said than done. For instance, if a company is looking for a fully equipped remote IT support service, they might outsource this to a company that understands this topic deeply instead of setting up new technical departments and hiring a raft of new staff. In this instance, choosing a company experienced in this sector makes financial sense and makes practical sense in that they want it done by a business that understands the task. In light of the above, what are some of the biggest benefits of outsourcing certain aspects of a company?

Businesses Can Focus On Your Core Business

One of the primary reasons many businesses outsource is to focus on the things that make them money. By looking at the earlier example of Amazon, you can see the benefits an online retailer has when outsourcing their logistical needs to another company (especially one as far-reaching as Amazon). Logistical operations are hugely complex, time-consuming, and costly if incorrectly handled. Therefore, this leaves only two options for most businesses:

1. Hire and train new staff

2. Outsource

Although hiring new staff may be cost-effective for large multinationals, many SMEs simply cannot afford to invest the time and money in such a task.

Technology Is Accessible Without The Investment

Operations like supply chain management and logistics often require significant investments in specialist technologies to facilitate smooth and accurate operations. Similar to why you choose not to hire and train new staff, many SMEs do not have the resources to invest in the technology needed to perform these complex tasks. Furthermore, logistics is often only a certain percentage of business operations, so directing resources in technology that you will only use a certain amount of the time is unfeasible. Outsourcing this part of your business to a business devoted to it entails paying a fair amount for them to manage this part of your business and invest in the technology required for successful completion.

It Can Improve Customer Satisfaction

Continuing the e-commerce example, it is clear that outsourcing the delivery of goods facilitates a higher level of customer satisfaction. For example, no matter how much you strive to make customers happy, it is inevitable that some items will be faulty (especially if you have a high revenue). In these cases, it is good practice to simply ask your customer to return the product and provide them with a replacement or a refund. Even though this sounds straightforward, it is fundamentally a loss-making activity you’d rather avoid and instead focus on the profitable side of the business. If said e-commerce business had outsourced this task to a logistics company, they would be responsible for returns and replacements, thus allowing the business to focus on its core activities while maintaining a happy customer base.

Reduced Liabilities

While this point is aimed explicitly at the logistical side of things, it also applies to other industries. By not having to deliver products, a company will immediately cut out the myriad of liabilities that comes with transposition, from accidents to lost packages, etc. However, this also holds for other industries. For example, a company might need a bespoke piece of software to perform specific tasks. By outsourcing to another company, they don’t have to worry about an intellectual property infringement as this will be covered by the outsourced software provider.

Outsourcing can be a massive benefit to businesses. Businesses can save money by outsourcing manufacturing, marketing, logistics, and even accounting. It allows companies to focus on their core competencies and plow all of their efforts into the profitable parts of their business.

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Archives, Global Logistics, Global Trade Daily, Warehousing

Key Considerations for an E-Commerce Fulfillment Model

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More and more people today are choosing to do their shopping online. The first quarter 2021 e-commerce estimate increased 39% from the first quarter of 2020. Whether it is ordering groceries ahead of time for pickup, tapping an ad on Instagram and buying those sunglasses that caught your eye or a monthly subscription for razors that shows up like clockwork, all of these products begin somewhere. In turn, each of these “somewheres” reach their consumers through their own unique fulfillment model.

By 2023, retail e-commerce sales are expected to account for $740 billion in revenue, up approximately 58% from 2017, according to a Statista market study. If you are a consumer, this may not fully interest you. You might say, “So what? I click a button and the things I want arrive when I need them to.” However, if you are someone in the infancy of starting a business, or if you have an established business that you would like to expand via online sales, creating and maintaining an efficient fulfillment model can be a challenge you grapple with every day.

No two fulfillment models are the same, nor should they be. What works for one retailer may not be effective for another. However, regardless of industry, product or business size, many of the considerations involved in designing an operation are similar. This article will explore what those considerations are, why they are important and how any business can transform their customer engagement through a fulfillment model that evaluates options for insourcing or outsourcing operations, considers strategic investments in supply chain technology and leverages supply chain best practices.

INSOURCING VS. OUTSOURCING FULFILLMENT OPERATIONS

Prior to the emergence of widespread retail e-commerce, fulfillment was a relatively straightforward process. Companies manufactured or procured their products, which were then warehoused in a location with viable transportation routes to their points of sale before eventually being shipped wholesale and stocked at brick-and-mortar retail stores for consumers to purchase. So, what changed? In this simplified example, the biggest shift is that now instead of retailers or company-owned stores accounting for the largest share of orders to the warehouse for fulfillment, this volume is coming from the individual consumer. That said, what has enabled this shift to occur? Well, the answer to that question is multi-faceted. Again, keeping things in a simplified view, this change has largely been driven by an overall decrease in shipping-related costs and expanding technological capabilities that increase the speed of the fulfillment process.

The shipping industry has drastically changed in the last 20 years, with outsourced and third-party logistics (3PL) providers significantly contributing to this reduced-cost trend. According to an Acumen report, the global third-party logistics market is expected to grow at a CAGR of around 7.5% from 2021 to 2028 and is expected to reach a market value of around US$ 1,800 billion by 2028.

Shippers continue to report a reduction in logistics costs by utilizing these outsourced services. What is their secret? Primarily, two factors—scale and technology. Scale, in this sense, means that a wide variety of products from various retailers can be stored and shipped from the same location. This increases truck capacity utilization from the 3PL facility (middlemen) to the shipping hubs that handle last-mile delivery to the consumer. The more a truckload can be fully utilized, the lower the shipping cost per individual item.

This principle applies to every retail operation. If you have an emerging business and want to reduce the cost of reaching your customers, partnering with a 3PL service may be a great option. This would allow a company to take advantage of the 3PL’s scale and technology, for a fee, and to tap into a wider consumer market for less than it would cost to internalize their logistics. Similarly, 3PL partners can be advantageous from a time-to-value perspective. By providing a pathway to quickly spin-up and initiate customer engagement via e-commerce distribution, a 3PL partner can provide scale and reach faster than internalizing. However, this time and cost equation changes as sales volume increases. If a company continually achieves a high sales volume, and can afford to implement a lengthier planning horizon, moving to an internalized operating model may be the better option.

This is where understanding and applying the technology utilized by logistics industry leaders, along with adhering to best practices for warehousing and distribution, become critical to a business’s success. On the other hand, if a company does not meet the sales threshold where partnering with a 3PL is advantageous, options certainly exist to improve fulfillment speed, reduce costs and grow an operation by adopting these technologies and best practices on a smaller scale, all while keeping retail operations independent.

TECHNOLOGY

For any operation that desires growth, investing in and improving the technology used to conduct business is a great place to start. This is especially true in a world where anyone who is a maker, creator or inventor can turn ideas into profits by simply creating a website marketplace using common services such as Shopify or Squarespace. Entry into the e-commerce space has never been easier. It is, however, difficult to know what to do next when the sales orders start piling up.

Is too much success a bad thing? Of course not. However, as a retailer, the obligation to customers is to provide them with the products they purchase in a timely manner while reducing defects and incurred costs as much as possible. It sounds simple but gaining brand popularity and maintaining it are two different things. The former is largely based on marketing or innovation while the latter is predominantly due to a high level of organization and business efficiency.

Systems

Let us revisit our scenario mentioned at the end of the “Insourcing vs. Outsourcing” section. In this example, consider a retailer that has introduced an innovative product or brand to the e-commerce market, and sales are taking off. The success is there, but what do you do next to improve organization and efficiency? First and foremost, getting a grasp on inventory and understanding the product movement within the “four walls” of your operation will prove critical to the long-term success of the business. This is where a warehouse management system (WMS) can help. In years past, the acronym WMS has been synonymous with large-scale, highly sophisticated and automated operations. Today, however, this landscape has changed significantly. Gone are the days of high start-up costs and expensive on-site equipment with an army of consulting resources to get a basic WMS up and running. Those kinds of deployments are now predominantly reserved for the most sophisticated large-network fulfillment businesses where subject matter expert resources can provide their highest value.

So why adopt a WMS? A warehouse management system should be thought of, to use a computing analogy, as the “operating system” for your fulfillment business. It can funnel in orders that you receive from your e-commerce web portal and manage workflow—from directed put-away of product to batch picking orders—with the goal of timely fulfillment to consumers. It can track inventory from receipt to storage and replenishment to sale. Furthermore, it will function as the nucleus of your operation where additional systems and technologies can be built out to continue enhancing operational capabilities. These additional systems may eventually include a transportation management system (TMS) for optimized truck-load planning and parcel shipping, a labor-management system (LMS) for improving workforce engagement and order management or distributed order management system (OMS/DOM) for managing various order streams coming from multiple points of sale.

The WMS can even serve as the basis for attaching automation components such as a warehouse controls system (WCS) or warehouse execution system (WES) for use with conveyor, robotics, sorters or storage and retrieval systems. According to a study by APQC, organizations utilizing a WMS spend roughly $3.63 less per $1,000 in revenue across the entire logistics process than those not using a WMS. This may not appear to be much, but as revenue increases, these savings do as well. Likewise, the efficiency gained by implementing a WMS can result in significantly higher-order accuracy rates and reduce the overall number of expedited orders shipped, further lowering overall shipping costs for a seller.

Low-Cost Options

The core function of a WMS is to better manage the flow of goods within an operation by increasing organization, with the thought being that a high level of organization leads to increased efficiency. This is something any operation, big or small, can take advantage of. Vendors today are providing system options for all sizes of fulfillment businesses. On the smaller side, vendors such as Systems Logic’s “Wireless Warehouse in a Box” and Ship Hero’s suite of products provide excellent cloud-hosted and subscription software options for a quick, easy and affordable deployment.

Additionally, these products incorporate direct one-click integrations to many common sales channels for immediate organizational benefits while also providing a foundation for future technological enhancements that may be desired. According to the company FAQs for both vendors, typical setup time for a system of this type is roughly one week but can depend on several factors. These variables can include the size of the product catalog that needs to be loaded in, the number of sales channel APIs you would like to connect and the extent to which you would like to custom configure certain aspects of the product. Notably, purchasing a WMS and utilizing it for fulfillment within one to two weeks should appeal to any seller that views organization and efficiency as primary drivers for the future success of their business.

Mid-Tier Options

On the mid-level side—keeping the cloud-deployed and subscription basis requirements—many players have forayed into this market providing a wide array of capabilities and advantages. Some vendors in this space have begun to incorporate controls systems, labor and order management modules, KPI dashboards and reporting, as well as additional configuration options. Other capabilities of these products include multi-site and multi-tenant deployments, lite-kitting and build-to-order needs, and space-cube and pick-path optimization functions.

Strong vendors in this space include Deposco, Intellitrack, Path Guide, Ship Edge and SKUVault. Further investigating these options may appeal to businesses that are already utilizing a low complexity system but recognize additional capabilities are needed to sustain and expand upon their success. Uplifting systems in this space will likely require coordination with vendor resources as well as possibly employing contract labor that specializes in WMS installations and configuration. Once live, however, these systems give any mid-sized fulfillment operation significant capabilities that they can continue to develop and utilize for years to come.

Top-Tier Options

If you are familiar with the current WMS landscape, then the vendors servicing the top end of the market should not come as a surprise. These offerings service the most technologically complex distribution operations and provide a level of capability that other systems simply cannot match. They are also on the cutting edge of supply chain innovation, often incorporating native control systems, advanced order streaming (opposed to traditional waving) functions, sophisticated put-away and allocation configuration options, as well as enhanced labor and capacity planning tools. Some vendors are even revolutionizing the way their systems are sold and maintained by converting their products to what is known as a “version-less” architecture. This, in simple terms, means that once you purchase a subscription to the product, you will not have to purchase its successor version in the future. It also means that updates and software patches, along with product upgrades, can be pushed out to the customer with minimal intervention or disruption to day-to-day processes at a lower overall cost.

When considering systems of this scale, products offered by Blue Yonder, Infor, Manhattan Associates, Körber-HighJump and SAP come to mind. Other vendors that fall just short of the very top tier include Avectous, Click Reply, Made4Net, Microlistics and Softeon, among others. It is worth noting that these systems will require significant capital investment to purchase, deploy and maintain over their life cycles. The previously mentioned version-less example is a way in which vendors are attempting to address some of these long-term cost concerns. However, the price of adoption is still quite high. That said, if a business requires intelligent and automated decision-making from its systems, along with high visibility and control over distribution operations, these are the best solutions available.

Extended Systems and Other Options

WMS solutions receive significant attention due to the organizational and process capabilities these systems present, but a key feature for sellers may be left out of the vendor-provided solution. This feature is called parcel shipping. Parcel shipping is defined as shipping small and light boxed items, usually weighing less than 100 pounds, that can be moved without equipment assistance. The process of parcel shipping involves packaging the sold items, weighing and measuring the shipping container with its contents inside and addressing the box to the end customer with a printed shipping label. Parcel shipping capabilities can be introduced to the fulfillment process as standalone systems, part of a TMS or within a WMS solution. Many options are available in this technology space so it is pertinent to research the various types of parcel shipping solutions that will best fit your current business’ size and complexity while allowing for future growth and development.

BEST PRACTICES

While incorporating supply chain technologies and automation into a fulfillment model can drive widespread efficiency gains and reduce operating costs, these tools must be utilized effectively to achieve the desired benefits. The parameters that define the successful use of these tools are known to industry specialists as supply chain and warehousing best practices. Now, it should also be stated that these best practices can and should be incorporated to all distribution models regardless of size and complexity. Any distribution operation can reap widespread benefits by implementing these methods to improve organization and streamline processes.

Slotting

The concept of effective slotting can be a major driver of efficiency gains for any size business. Slotting, as a warehousing strategy, is the idea that goods should be stored in areas of an operation that ultimately reduces the overall travel time needed for laborers to complete outgoing orders. A “slot,” so to speak, is where an item lives within the building. This is the primary place you store an item or product to be readily accessible for boxing and shipping. For instance, if workers are consistently traveling back and forth across a building to obtain the most ordered items a business sells, this becomes inefficient. Instead, consider grouping the highest sales volume items together in the most easily accessible zone of an operation to reduce the amount of travel time required to collect and fill orders. It should also be mentioned that these high-volume items will likely change over time and as such, slotting strategies should change as well.

The number of high-volume products grouped together may expand or contract and may also be swapped out with other products as sales figures and forecasts change. It also does not have to stop there. Many businesses organize their entire operations such that the least commonly purchased items are at the farthest end of their building with the most purchased items located closest to pack-out and shipping. Again, the whole idea is to reduce the amount of time and effort it takes to get products out the door and into the hands of customers. This can also be further supplemented with automation such as conveyors, goods-to-person systems and even AI-assisted software algorithms included in some high-end WMS solutions. However, technology and automation are not a requirement to implement this strategy and reap immediate benefits.

Storage Mediums

A question many businesses periodically ask themselves is, “What size building is needed to store and effectively distribute product?” In some cases, the question should instead be framed as, “Is the available space we have being used effectively?” Evaluating and refining the way in which products are stored can be equally as important as determining where they are located and will likewise be a key component of defining how much space a business requires. Like slotting, which functions as a strategy to reduce travel times, determining which storage mediums to use is all about reducing the amount of wasted space, or “air,” that exists in a product location. For instance, if a section of full-size pallet racking is being used to store quarter- or half-size pallets, this space is not being properly utilized. There could be anywhere from 50-75% of unoccupied space in each of these locations. In this example, if these products are consistently stored in pallets of this size, consider reducing the location opening height of the racking bays. Depending on the product weights, it may be possible to add one or two more overall levels of storage to this area and consolidate products without requiring additional square footage.

This is a straightforward example, but now consider how much space is potentially being wasted when you examine a full-size warehouse. What other consolidation opportunities exist? If a business is carrying a large amount, think multiple pallets of certain products at a time, there could be an opportunity to implement a double-deep pallet storage system. This would lead to an increase in the volume that can be stored at one location while minimizing the overall square footage required to do so. Likewise, strategies exist for handling smaller quantities and sizes of products.

Decked shelving systems can provide a way to mix cases of products in smaller locations, further minimizing the amount of wasted space. These mediums can also be quite sturdy, with the ability to stack high, allowing for large volumes of various products to be in one centralized area. Just be sure to keep track of where everything is placed. These strategies can be further expanded upon by incorporating technologies such as automated storage and retrieval systems (ASRS), pallet shuttle systems for very high-density full-pallet storage, as well as both horizontal and vertical carousel systems for small item storage and high throughput rates. Last, but certainly not least, do not underestimate the potential of building a mezzanine. The overall takeaway from this best practice should be before building out, consider what can be accomplished by building up, and strive to effectively use the space available before acquiring more.

Product Handling

When thinking about overall operating efficiency, the goal is to move product from storage to the customer as fast and accurately as possible. A factor that can directly affect this, within the four walls of a fulfillment operation, is the amount of product handling required to complete a sale. Like reducing travel times within the building, minimizing the number of steps required to go from storage to the customer can greatly increase the number of sales that can be completed in a given timeframe. One way to do this is to look for opportunities where processing steps may be redundant. When filling orders, instead of placing items in an intermediary bin to take to a packing area, where they must be transferred from the bin to an outbound shipping carton, consider placing the ordered items directly into the shipping box to eliminate this double-handling.

Expanding upon this idea, another strategy is to fill multiple orders at a time. Think about using a cart or other simple equipment to collect the ordered products from storage directly into their shipping containers and then taking this batch of orders to a pack-out or shipping area. By adopting this strategy of “batching,” further improvements can be made such as grouping similar orders together and minimizing the overall travel distance required. Or alternatively, if volume is high enough, it becomes possible to collect all of the items needed for a group of orders and then sort the products to the right shipping containers at a downstream area, enabling operators to process more volume in a shorter period of time. This is an area that most WMS systems excel in, especially higher-tier systems where more automated decision-making tools are included.

New products and sellers are emerging in the retail market daily. Those enterprises that experience success will continually look for new ways of expanding customer engagement. Whether that means outsourcing operations or taking steps to internally build a robust fulfillment model, the decision to pursue either avenue will be unique to each individual business. Developing an internal distribution operation may seem like a daunting task, especially as success mounts and orders begin to accrue. However, abundant success should not be thought of as a bad thing, but rather a challenge to innovate. The tools required to capitalize on this success and grow towards the future have never been more accessible, though it can be confusing knowing just where to start. Hopefully, the information presented here helps to provide clarity on these topics and outlines a roadmap for improving operations regardless of a business’s size or complexity.

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Sam Nichols is a Project Consultant for Tompkins Solutions. Tompkins Solutions, a subsidiary of Tompkins International, is a global supply chain services firm dedicated to helping clients achieve supply chain excellence and profitable growth. Founded in 1975, Tompkins has integrated its decades of experience in strategy, commerce, logistics and technology to provide unique supply chain consulting and material handling integration solutions. By combining best-in-breed services and technologies, Tompkins delivers a true end-to-end supply chain solution, enabling clients to improve the customer experience and ensure long-term success. Tompkins is headquartered in Raleigh, North Carolina and has offices throughout North America. For more information, please visit www.tompkinsinc.com.

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Archives, Global Logistics, Global Trade Daily, Warehousing

Supply Chain Executives Implementing Warehouse Visibility Solutions

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The last 18 months have truly tested the supply chain. Between a global pandemic, shipping bottlenecks, and surprising inclement weather, the impacts were felt across various industries. There’s still a shortage of microchips and other consumer goods due to the events of 2020, even as we move on from many pandemic-era consumer needs with items like sporting goods and furniture. Weather, gas line disruptions, and cyber-attacks are now affecting the production of new items, from plastics to chicken wings and meat supplies, and even cheese. Whether it’s the result of a singular event or that of multiple mini disruptors, the supply chain has been struggling to keep up with demand, which makes disruption the new normal. 

Even as experts attempt to navigate ongoing disruption, many supply chains today still have some components or areas that remain disconnected, which ultimately hinders the ability of all businesses involved (from the DC to the 3PL) to understand operations completely. To stay competitive, modern supply chain managing experts are focusing on better visibility and their use of data inside the warehouse, looking to provide better continuous improvement options to their teams as products go in and out of the warehouse – managing disruption before it becomes a transportation issue. Companies that have remained competitive during the last 18 months are turning to warehouse visibility to provide warehouse operators with valuable insights needed to turn analytics data into real-time, actionable process improvements. 

Many leading supply chain experts have found that continuous improvement processes need just that – their own continuous improvement. To that point, a recent industry survey revealed where inefficiencies are taking place within the warehouse, and where a lack of real-time, easy-to-use analytics data is still preventing operators from making integral, real-time decisions.  

Survey Results for Improved Insights 

In March 2021, Merit Mile commissioned an online survey that was presented to approximately 2,500 supply chain and warehouse executives. The survey revealed that over 75% of executives are seeing an increase in efficiency from implementing warehouse visibility technologies, with a quarter seeing between a 10% – 15% increase, and more than half seeing between a 5% – 10% increase.  

In addition, a third said they’re seeing a 10% – 15% increase in operational savings and another half said they’re experiencing a 5% – 10% operational cost savings as a result of warehouse visibility technologies that were implemented.  

Finally, nearly 70% of organizations said they need better visibility into the procurement functions of their warehouse, followed by production and labor (65%), and fulfillment (37%).   

Supply chain systems globally are feeling pressure of various types, with everything from constrained transportation systems, labor workforce challenges and supplier material shortages. What this survey shows is that thousands of supply chain executives realize that the warehouse is central to the entire supply chain operation. Incorporating better visibility regarding what data means to their operation will enable quicker decisions in real-time.  

Transitioning to New Supply Chain Strategies  

Using the data gathered, warehouse executives can now view what they need to implement and improve in order to create the best visibility for warehouse operators. With it now being made clear that almost all supply chain systems need a makeover, most companies have already begun transitioning to new and improved strategies.   

Over the next 12 – 24 months, 72% of businesses said they will be focused on aligning traditional supply chain strategies with both digital and analytics solutions. Sixty-four percent said they’ll be focused on defining an advanced supply chain systems strategy. Another 34% said their focus will be on executions and refinement of newly installed systems and solutions.  

Half of all companies polled said they plan to implement warehouse visibility technologies over the next 12 months. A third of those companies polled said they will be considering the implementation of such systems. These steps are just the first of many to come in order to perfect the supply chain systems and reduce the visibility issues of the supply chain.  

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Sarah Caro has nearly 15 years of experience in the public relations industry working preliminarily in the agency setting. Her expertise lies in the B2B realm, garnering client media placements in top-tier outlets including Forbes, The New York Times and Bloomberg, in addition to top industry-specific outlets. To date, she has worked within the mining and manufacturing, supply chain, automotive, healthcare, technology and non-profit sectors. As Senior Account Executive for Merit Mile, Sarah regularly gets client stories into the hands of the media, making them the go-to source for news stories.   

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Archives, Global Trade Daily, Imports/Exports

How Your Business Can Benefit from Importing Under Section 321

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Import taxes often have a huge impact on businesses, especially U.S. e-commerce companies that rely heavily on goods made overseas. Many of these companies are drastically lowering their import costs by taking advantage of a little-known U.S. customs statute, Section 321. Let’s look at how these businesses are benefiting.

Section 321 Cuts the Costs of Chinese Imports

What you’re importing and where you’re importing from can considerably affect the duty rates you have to pay. While this applies to lots of countries around the world, China is a central focus for many U.S. businesses. In 2020, Chinese exports to the United States topped a whopping $430 billion! And shipping directly from China to the U.S. can often cost around 20% in import taxes.

The high price of bringing goods from China to the United States was exacerbated by recent trade tensions between the U.S. and China, respectively the world’s largest consumer of goods and the world’s largest manufacturer of goods. Over half of the overall trade between the U.S. and China has been negatively impacted. The affected U.S. businesses report that the increased tariffs have considerably raised their operating costs, and many of these companies turned to Section 321 and Canadian fulfillment companies for economic relief.

How Does Section 321 Work?

Section 321 allows for the duty-free importation of qualifying goods into the United States that are valued at $800 or less. But most companies buy from China and other countries in much higher quantities at much higher dollar values. A problem, right? There’s a simple workaround to that: bring the goods to Canada, where import tariffs are much lower than they are in the United States.

A company can, for example, buy a shipment of Section 321-eligible goods valued at, say, $8,000 from China, and have them sent to Canada. Then they can have those goods brought to the U.S. in ten separate $800 shipments, on ten separate days, without paying about $1,600 in total U.S. tariffs they would otherwise incur if they imported in bulk directly from China to the United States.

Who Handles Section 321 Goods on the Canadian Side?

That’s where a Canadian fulfillment company comes in. Using a “pick-n-pack” process, Canadian fulfillment companies receive bulk shipments at a Canadian warehousing facility that’s usually strategically located close to the U.S. border. The “picking” part includes pulling items from large shipments and readying them for smaller orders that often go to multiple locations. The “packing” gathers these items according to customer needs and requirements.

From receiving the goods to final delivery confirmation, a good fulfillment company will have the ability to handle and electronically track every shipment. A good fulfillment company is also skilled in “kitting,” taking items from multiple SKUs and bundling them together under one SKU for a more economical and streamlined shipping process.

Section 321 is a Speedy Solution

Can anybody bring goods into the U.S. under Section 321? Technically, yes, but not everyone can do it with the same speed and efficiency as fulfillment companies. The detailed documentation that U.S. customs requires has to be perfect and delivered before the shipment gets to the border if you want to get the goods through smoothly. How? Fulfillment companies enjoy participation in the Section 321 Data Pilot Program, allowing them to submit the needed documentation electronically to ensure their clearance is ready before the shipment arrives at the border crossing.

And the closer to the border the better. Many Canadian fulfillment companies are close enough to the U.S. border to guarantee same-day fulfillment, bringing products into the United States that are then handed off to U.S. carriers including FedEx, UPS, and DHL for swift delivery to their ultimate destinations.

It’s been famously said that the only two certainties in life are death and taxes. But that may not be entirely true. At least not the second part if you’re taking advantage of Canadian fulfillment and Section 321.

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3pls, Archives, Global Logistics, Global Trade Daily

Here’s How Quadient Helps Your Company Box Smarter

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Following the first-ever all-digital ProMat experience, Global Trade Magazine had the opportunity to learn about the companies changing the way the supply chain is optimized. We talked with Sean Webb, Director of Automated Packaging Solutions in North America for Quadient to discuss how the company’s CVP models are supporting businesses of all sizes. Quadient’s machines showcased at ProMat include the CVP Impack and CVP Everest Automated Packaging Systems – each offering solutions dependent on specific applications each customer has.

What operations challenges do the automated packaging solutions solve for the supply chain?

“Operationally, the ability to keep up with fulfillment has been a challenge for companies. Associated with that comes the productivity factor and labor. Some are throwing more labor at the issue to manage this environment, which creates more of a challenge. Having the right-size box is critical and has become a big issue. Many companies are getting hit with DIM weight charges, while transportation costs increase and are becoming quite significant. Additionally, there is the customer unboxing experience to consider as well. Having the right-size box without a lot of the dunnage to fill empty space becomes important.

This, along with material costs, are challenges in the market. We are seeing raw materials increase, so any way we can minimize that spend is critical – including the dunnage I spoke about previously. There are also negative environmental issues tied into the dunnage people are putting into those boxes as well.”

Discuss the eco-friendly benefits of automated packaging solutions.

“There are a few different ways the solutions affect the sustainability issue for customers. First, the materials themselves are biodegradable with corrugate that breaks down over a shorter period of time in a landfill versus indefinitely as seen with plastics. Once the dunnage is eliminated, it is no longer ending up in a landfill. Lastly, when you create a smaller box, you can put more in a truck, for example. This allows for fewer trucks on the road to carry products which translates into a smaller carbon footprint overall.”

Discuss the cost savings aspect businesses can benefit from with this solution.

“When we look at the three main areas from a savings standpoint, we break it down into labor first and foremost – you’re looking at automation that allows you to have a higher productivity level versus the manual approach. There is about an 88 percent savings on average per our data analysis from that alone.

In terms of transportation savings, when rightsizing the box, customers can see an average of 32 percent savings. We certainly see that vary with some customers depending on their applications, with savings that can be significantly larger.

Then you have material savings. If the customer is putting in void fill, there are significant savings that add up. On average, there is a 38 percent materials savings for our customers that make the transition to an automated packaging solution. In addition, by switching to fanfold corrugate rather than the standard RSC boxes, there is an average 29 percent less corrugate used.

The CVP Impack is designed for up to 500 parcels per hour, while the CVP Everest auto-boxes up to 1,100 parcels per hour and would meet the needs of high volume fulfillment or e-commerce companies. For either single- or multi-item orders of soft or hard goods, these automated packaging solutions do not require additional equipment, boxes or operators to eliminate or reduce the need for void fill materials.”

How do the solutions support employees?

“Certainly, these solutions support being able to fulfill the orders and meet the timeframes customers are expecting. By adding this automation, it allows companies to repurpose their workers and reapply them to different areas within their warehouse, making them even more efficient. Part of the challenge from a labor perspective is finding the workforce with the flexibility that businesses need and are looking for. For example, 10 people could typically support a normal order volume situation but 40+ people are needed for peak periods. Finding that labor force and space becomes a big challenge, and the automation allows for the flexibility required when it’s needed, without added costs.”

What size business is this solution for? Can smaller businesses benefit from this?

“There’s really no standard application. What we have seen are companies with a lower throughput number that we thought would be challenged to justify this kind of automation actually finding that they are able to use it and remove a bottleneck in their operations. Lower productivity numbers are essentially doubled or tripled because they are now able to get more orders out. These companies can increase efforts in driving product demand.

For larger operations, there is a need to put out many orders each day and this type of solution is great for them. It allows companies to meet high demands seamlessly. Both large and small companies can benefit from this solution and there is no “ideal customer” as it is extremely broad even on the industry level. We serve manufacturing, 3PLs, technical wholesalers, and really any company that is shipping products out to customers.”

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Sean Webb is the North American Director of Automated Packaging Solutions by Quadient. With over three years of industry experience, Sean is passionate about helping shippers relieve their daily challenges with automation to optimize their efficiencies, productivity and bottom line. Sean previously held partner and senior level positions in the financial sector.

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Archives, Global Logistics, Global Trade Daily

The Future of E-Commerce: Five Post-Pandemic Trends Sellers Will Need to Know

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Kenny Tsang, industry expert and Managing Director of PingPong Payments, provides his top five trends to define success in 2021.

In the past year, the rules of e-commerce have effectively been rewritten. In an increasingly touchless society, our lives have become digitized, changing how we engage, interact, and view day-to-day life. Now, new online buying behaviors have emerged, and millions of consumers that previously relied on brick-and-mortar sales are shopping online to meet everyday needs.

But the rise of e-commerce hasn’t been without shortcomings. At the height of the pandemic in May, sellers, welcoming millions of new consumers, were faced with supply chain disruption, shock shortages, and business loss. Many turned to international options to mitigate issues, and cross-border sales saw a staggering 21 percent increase in year-on-year sales in June.

With uncertainty surrounding the year ahead, sellers will naturally be wondering if this growth is sustainable. It will be vital more than ever to plan for a post-pandemic environment.

To prepare, here are five key trends that will define success in 2021:

Growth of Cross-border, Global Marketplaces

In a year of uncertainty, the global marketplace has become one of the very few resilient, effective, and profitable platforms to weather the storm. Fuelled by the transformation of shopping, Alibaba, Amazon, Etsy, and Taobao all reported record figures this year as consumers turned to these new ‘virtual shopping malls.’

By the end of 2020, an estimated two billion people will have made an online purchase, and the rise in users is beginning to signal a shift in online sales. As important as the U.S. market is to this growth through marketplaces such as Amazon, eBay, and Etsy – sellers can often forget that 85 percent of the industry purchasing power lies abroad. In fact, in China, e-commerce sales have recently overtaken the U.S., and the country’s ‘Singles Day’ shopping event eclipsed Black Friday in the U.S.

At the end of December, the global e-commerce market was expected to reach $1 trillion and early forecasts anticipate the trend to continue. With new cross-border payment solutions that can manage overseas logistics, pay suppliers in a local currency, and make VAT payments in real-time, becoming an international seller is easier than ever before.

Diversifying Supply Chains

To say that lockdown restrictions affected supply chains in 2020 would be putting it lightly. At the peak of the crisis, disruption to factories highlighted the fragility of relying on one single source for inventory. With little to no option left for sellers, the shift to diversifying supply chains to mitigate financial repercussions has called for an industry-wide rethink.

However, disruption isn’t new, and one of the biggest mistakes sellers often make is overlooking future risk planning and the prioritization of corrective actions.

Instead of assuming there won’t be interruptions to one supply chain, consider other sources. With an abundance of cross-border services such as parcel consolidation, global fulfillment, and payment providers, sellers can – and should – explore international markets.

Faster, and Faster delivery

As the world changes, consumer preferences, schedules, and expectations are also rapidly affecting the speed and manner of how products are delivered. In an age of immediacy, the industry standard of the typical 7 to 10 delivery day window has become outdated. Over 90 percent of consumers are now willing to pay for same-day or faster delivery.

Thanks to online marketplaces such as Amazon Prime, Walmart, and Best Buy, the ‘new normal’ of instant delivery in as little as two hours has challenged sellers to rethink their customer service approach. Now, the speed, price, and the previously optional ‘add ons’ are differentiating sellers through competitive advantage in an e-commerce race that most cannot afford to lose.

The key is to be flexible. With diversified supply chains, robust inventories, and reliable fulfillment management, sellers can use their agility to deliver to the right customers at the right time.

The Rise of Social Commerce

The business advantages for retailers to sell directly through social media in a year that has seen e-commerce become a focal point of day-to-day continuity has drastically strengthened. The opportunities to buy, sell, or promote on one integrated platform through leveraging channels that millions of people are using now appears to be a no-brainer for most sellers.

Staggeringly, over 87 percent of e-commerce shoppers believe social media helps them make a shopping decision, and yet, only 40 percent of sellers are using it to generate sales. In 2021, experts project this number will rise significantly; we’re arguably already seeing its value in China, which has hosted its biggest sales event – Singles Day – on record so far. Through live-streaming, two-thirds of Chinese consumers said they purchased products via the platform in the past 12 months, citing “instant information” as a significant deciding factor.

Live-streaming is bound to become part of the U.S. shopping experience, and with more features evolving and launching alongside industry growth and demand – sellers should keep up with new trends.

The Transformation of Retail Shopping Events

As online commerce continues to prevail, annual in-store holiday season doorbusters promising discount deals have begun to lose their relevance. During the 2020 holiday season, deals popped up early, 24-hour sales lasted a month, and by late November, most of the ‘festive shopping’ had been done online.

Retail shopping events have changed, accelerated, and turned in favor of digital commerce, with sales increasing 30 percent year-on-year during the 2020 holiday season. More importance is being placed on the broader e-commerce market, and the increase in competition in an already saturated market will require sellers to work smarter.

Instead of waiting for domestic season events, think globally. By partnering with the right cross-border payment provider, sellers can enter new markets, effortlessly move money to all corners of the world, and grow a larger audience that will effectively move sales forward post-pandemic.