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When you think of the world’s most advanced technology companies, you think of Google, Amazon, Californian start-ups. What you don’t think of is traditional 3PLs. But the explosion of growth in e-commerce means that, in fact, some of the most complex technology is at work in the field of logistics.
The success of e-commerce depends almost entirely on delivery. In fact, it is delivery which defines e-commerce. Whereas before the customer did the work, getting to the shops, paying and returning with the goods, now it is the shop that has to do the work – at less cost, and faster.
And when the success of etailing depends on delivery, it becomes the logistics service provider that holds all the cards. From instant ordering to next-day delivery, the characteristics of e-commerce – and the technology involved – are in the remit of forwarders which, with global flows, can open up new markets to retailers overnight. New sales channels are in the hands of the suppliers, not the shops or the manufacturers.
We spent a month speaking to executives across the e-commerce and technology departments of CEVA Logistics, as well as retailers and etailers. We examined the differences in traditional retailing, final-mile and returns, technology and the growth potential of e-commerce – as well as what the consumer wants. E-commerce has been a significant disrupter of traditional retailing – marketing, forecasting, promotions have all altered in this brave new world.
In 2017, e-commerce was expected to grow 23%, bringing in sales of $2.29 trillion, about one-tenth of total retail sales worldwide. While it is generally agreed that e-commerce, at most, will end up being about 50% of the total retail market, no bricks-and-mortar retailer can ignore online sales. And with logistics a crucial part of e-commerce, neither can 3PLs, which have it in their power to be the new disrupters and innovators.