Retail Logistics – Trends, Challenges and Tips to Improve

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  • What is retail logistics?
  • How do eCommerce retailers benefit from logistics?
  • Retail logistics trends to stay on top of in 2022

Ordered clothing to be delivered to your home? Opted for curbside pick up or click and collect? These are all forms of retail logistics.

The coronavirus pandemic has caused a massive shift in consumer expectations, with shoppers expecting brands to offer a speedier, more flexible service.

From managing inventory flow to perfecting your order fulfilment process to ensure customers receive shipments within the specified time, logistics will help you streamline the various stages of your supply chain to ensure your eCommerce business runs efficiently.

What is Logistics?

Logistics refers to the process of managing how large volumes of goods are obtained, stored and distributed to reach their final destination.

Where retail is concerned, logistics is consumer-centred, with success measured by the smooth flow of goods to customers via efficient and effective supply chain management.

As the shift to digital continues to accelerate and eCommerce sales experience turbocharged growth, online retailers must revisit their logistics strategy to ensure they can effectively:

  • Meet consumer expectations
  • Minimise risk
  • Streamline operations
  • Reduce shipping costs
  • Offer more delivery options

While many eCommerce businesses have benefited from the opportunities brought about by COVID-19, coronavirus-related disruption has also exposed weaknesses in global supply chains.

Retail leaders must develop a more resilient logistics strategy to shockproof business against supply chain disruption and improve the customer experience.

What is Retail Logistics?

Retail logistics is centred around effective supply chain management to ensure customers receive orders when they want them.

It refers explicitly to managing merchandise flow from manufacturer to consumer through efficient logistics to reduce the risk of delays and solidify relationships to encourage repeat purchases.

Retail logistics involves both inbound and outbound processes and includes the following stages:

The key to producing a sustainable retail business is optimising a solid logistics strategy. Why?

A retailer’s success largely depends on the relationship between brand and consumer, with the ability to meet their expectations around fast, affordable delivery likely to enhance customer loyalty and boost conversion.

As shopping becomes more accessible to consumers through mobile phones and other smart devices, it’s become more important than ever for retailers to optimise their logistics strategy. Ensuring continued growth means keeping abreast of trends, maintaining good inventory management and understanding customers to remain competitive.

How Do ECommerce Retailers Benefit from Logistics?

Logistics is key to the retail industry as the timely delivery of goods in a cost-effective manner will ensure current and future profit maximisation.

Without logistics, customers wouldn’t receive their products. And as retail evolves to offer a more seamless omnichannel experience and physical locations become more involved in online distribution, a solid logistics strategy can help brands experience continued growth.

We’ve listed eight ways logistics benefits the retail industry:

Streamline Supply Chain Management

Logistics plays a massive role in supply chain management, given that it encompasses manufacturing, supply, transportation and distribution of goods.

A solid logistics strategy will help you streamline your supply chain processes to fulfil orders quickly and efficiently while reducing costs to maximise profitability. Failure to effectively manage your supply chain could spell disaster for online retailers, potentially resulting in price hikes, delivery delays and damage to goods.

Faster Delivery

Speedy delivery has become crucial to the modern-day supply chain, as consumers expect to receive their goods faster than ever before.

To avoid disappointing your customers, develop a properly planned logistics strategy to help you ensure faster, more direct delivery and anticipate potential disruption before it affects the end consumer.

Introduce more shipping options, such as next-day delivery, which has increased order volumes and effectively encouraged repeat custom. According to the 2021 Consumer Insights Survey, 65% of consumers are willing to pay more for faster delivery services.

Research also reveals that 59% of consumers opted for same-day or two-day delivery during the coronavirus pandemic. In comparison, 73% view fast delivery as a priority for online shopping.

Software Solutions to Support Order Fulfilment

New technology to support order fulfilment has led to numerous breakthroughs in logistics, with automation and artificial intelligence (AI) streamlining processes, enabling better management of customer relationships and expanding the boundaries of efficiency.

Some of the best software solutions encompass all key areas of retail logistics, including:

  • Order management
  • Inventory management
  • Warehousing
  • Transportation
  • Tracking
  • Forecasting

Some advanced software solutions will also produce metrics to help measure and adjust the order fulfilment process and facilitate trends data, which is extremely important in the current transformative decade.

Inventory Management

Effective organisation and stock tracking through logistics software solutions can help maintain the order of inventory levels, eliminating guesswork to ensure you have the optimal amount of products available in your warehouse at all times.

Gone are the days of tracking and organising stock with a clipboard and pen, which could take hours for large retailers. Instead, automated reports, digital programmes and instant data have transformed the way retailers manage their inventory, maximising efficiencies.

Reduce Supply Chain Costs

Whether retailers decide to outsource their order fulfilment or rely on in-house procedures, optimising your logistics process will result in more cost-effective business.

Most brands tend to in-house their logistics and order fulfilment operations when they start. Still, once you’ve established your brand and received numerous orders, the advantages of outsourcing to a third-party logistics (3PL) provider are plentiful.

Why spend money on hiring warehouse staff, paying for training, renting storage space and purchasing software solutions when you can invest in an experienced 3PL to do all that work? And for an affordable price!

3PLs can adapt their services in line with changes in demand and supply chain disruption, minimise risk to help retailers focus capital expenditure on brand growth and flexibly scale operations without compromising delivery or customer service.

Pointbid Logistics is a trusted eCommerce fulfilment provider committed to delivering excellent customer service. We provide same-day despatch, innovative technology with 24/7 access to order and inventory information, and scalable warehousing solutions.

Pointbid Logistics continually reviews and develops key technologies to help retailers take their eCommerce operation to the next level and provide a seamless service to their customers.

Improve Reverse Logistics Processes

A solid reverse logistics strategy is just as important as the forward process, with returns central to the customer experience.

The increase in online sales has driven the return rate higher. According to recent statistics, retailers lost approximately $218 billion to eCommerce returns in 2021, an 18.1% increase from the previous year.

While eCommerce returns can aggressively attack profit margins and spell headwinds for businesses, it also provides brands with the opportunity to deepen their relationship with consumers and provide a positive return experience.

When customers know there is a hassle-free returns process, they’ll shop more confidently and spend more on your products. Furthermore, easy returns can help encourage repeat customs.

Minimise Risk

Well-planned logistics and supply chain management strategies can help online retailers mitigate risk and safeguard their bottom line.

Logistics is exposed to numerous risks, including:

  • Supply chain disruptions
  • Shifts in consumer demand
  • Inflation
  • Natural disasters
  • Cyberattacks
  • Cultural, environmental and geopolitical factors

A disorganised retailer stands to suffer if they fail to develop a tried and tested logistics system that can effectively assess and respond to risks in a way that minimises business disruption.

Enhance Customer Experience

Consumers should be at the forefront of retailers’ minds as the digital transformation shifts into high gear.

Although most customers aren’t aware of the importance of retail logistics in order fulfilment, that doesn’t stop them from caring about your products and expecting timely delivery.

Foster the relationship you have with your consumers by improving your logistics. You can achieve this by providing supply chain visibility, offering real-time updates, quickly responding to queries, and encouraging feedback and reviews.

Retail Logistics Trends for 2022

We’ve covered some of the challenges inherent to retailers and how optimising your logistics strategy could boost your bottom line — now, let’s talk about retail logistics opportunities.

COVID-19 has driven eCommerce sales to unprecedented levels, and global retail sales show no signs of slowing down. Global retail sales are forecast to hit $26.7 trillion by 2022, a 6.6% increase year on year.

With new players entering the market and online competition expected to become more aggressive than ever before, here are a few retail logistics trends every online retailer should leverage to gain more exposure and streamline order fulfilment processes.

Peak Shopping Season to Start Earlier

Holiday shopping has started earlier than usual every year, and this trend is expected to gain further momentum in 2022 as omnichannel shopping experiences become more available to consumers.

To remain ahead of the curve and manage increased demand, retailers will need to prepare for peak shopping seasons in advance and risk-proof fulfilment services to avoid disappointing consumers.

Increased Demand for Omnichannel Shopping Experiences

Nearly 30% of the world’s population is shopping online. As a result, the modern customer journey has evolved significantly, with people browsing and purchasing products on social networks, websites, apps, in-store and via virtual means.

To deliver a seamless experience, retailers need to ensure online and offline shopping are blended to improve the chances of conversion.

Artificial Intelligence

While human workers will remain an essential part of logistics, retailers have the opportunity to boost productivity and minimise risk by investing in artificial intelligence.

AI can help retailers predict trends and generate more accurate forecasts than human experts. One of the biggest AI trends expected to hit the ground running in 2022 is collaborative robots, which will be especially useful during peak season. They can plug the gaps in your workforce and eliminate the need to hire seasonal staff.

Collaborative robots can also increase picking and packing efficiency, help organise inventory and scale operations relative to business needs.

Autonomous Vehicles

The logistics industry has widely accepted advances in automotive technology. Self-driving vehicles can help retailers supplement their existing workforce and fulfil their order fulfilment requirements in time to avoid disappointing the end consumer.

Several companies are building new autonomous vehicles, including Nuro, Starship Technologies and Zoox, owned by Amazon. Retail giant, Amazon, is going a step further by developing delivery drones, which will aim to deliver packages weighing up to five pounds in less than thirty minutes!

Sustainability

Sustainability has become a hot topic in recent years, with consumers becoming more aware of how their actions affect the environment.

Several countries, including the UK, have pledged to move to net-zero within the next 30-50 years, as recommended by the climate change committees. They have warned of the growing dangers of the increasing volume of greenhouse gases.

Growing awareness of climate change has caused consumers to make more conscious shopping decisions, and for retailers, this means that they need to offer more than eco-friendly products and packaging.

Consumers want to see brands actively tackling climate change and adopt an ethos of renewable practices to demonstrate their commitment to sustainability.

 

If you think that outsourcing your order fulfilment could help your e-commerce business save time and money in 2022, it could be time to give Pointbid a call. At Pointbid, we take the time to get to know your business to ensure that we choose the right fulfilment strategy for you. From goods in, picking and packing, to timely shipping, we take care of the order fulfilment process from start to finish. If you’d like to know more, please do not hesitate to give us a call on 0121 326 7368.

 

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