Why are you Letting Amazon Take Over Every Part of Your Life?
December 02, 2021
So, everyone knows Amazon. For years they have dominated e-commerce. But now, they are heavily investing in end-to-end logistics. We all know that Amazon is in business to make huge profits. And they do. But isn’t that your goal as well? The question we ask you, as a seller, is why are you letting Amazon take over every part of your life?
The global third-party logistics market is expected to expand to approximately$1.5 trillion by year-end 2026, up from $889 billion in 2020. Based on Amazon’s Q3 2021 earnings call, Seeking Alpha reports that Amazon’s logistics business is worth approximately $310 billion today and is poised to reach $1 trillion by 2031. If Amazon meets its target, it will be the dominant logistics player by 2031.
Along with a fleet of cargo planes to support their same-day to second-day business model with Amazon Prime, Amazon also has 40,000 semi-trucks and20,000 sprinter vans with115,000 workers transporting goods and services worldwide. It’s no surprise that they are eyeing a near-total takeover in terms of volume and service to major logistics companies like UPS, DHL, and FedEx. We are guessing that their next play might be to buy up airlines. They already employ pilots of major airlines—this is a logical next step for them.
As a seller, what should you do about this? The first thing you need to tackle to be competitive with Amazon is to differentiate and make it simple for you and your end-to-end logistics and not rely solely on Amazon, FedEx, DHL, USPS, or UPS as your logistics carriers.
Differentiating end-to-end logistics will accomplish a few things:
- You will control the process from shopping cart to delivery to your customer.
- Your business has more revenue potential because you will not be paying external logistics providers like Amazon, UPS, DHL, or FedEx and their surcharges.
- You will have greater brand control.
Acquiring a new customer is five times more expensive than retaining a satisfied customer. As a seller, you recognize the importance of getting your goods to your customer on time. Nearly 9 in 10 shoppers will go elsewhere for products if they experience a bad last-mile delivery.
Amazon wants to be your primary sales channel, warehousing, and first-to-last mile provider. But there are technology solutions that will allow you to have control over the logistics process. Doesn’t that sound like a better option for you and your brand?
Understanding the E-Commerce Supply Chain in Emerging Markets
October 25, 2021
The worldwide pandemic and consumer behavior shift to online shopping propelled the 2020 global e-commerce growth rate to 29%. With the COVID-19 Delta variant, among other variants emerging mid-year 2021, having a successful e-commerce strategy has never been more critical to retailers in developing markets. E-Commerce retailers, particularly in emerging markets, must be nimble and ready to quickly adapt to the supply chain issues currently forecast for the rest of Q3 and throughout Q4 2021. There’s never been a more acute and necessary time to dig in to understand your e-commerce supply chain better.
A Look at Mexico and India: Two Promising Regions for E-Commerce Growth
E-Commerce expansion continues to widen for emerging retail markets including, Mexico and India. These two regions show immense promise in e-commerce growth by 2024. In 2020, Mexican e-commerce saw a significant rise of 37%, while India witnessed a more measured 7-8% growth rate. However, due to a considerable uptick in the use of mobile, India’s e-commerce growth rate is expected to rise to an impressive $70 billion by 2030. We anticipate that both emerging markets will continue to quickly adapt to mobile adoption for e-commerce as accessibility continues and will generate excess revenue for retailers.
Larger retailers serving Mexico, like Wal-Mart, Amazon, and Liverpool, are responsible for 15% of Mexico’s online revenue today. Mexico has an 8% CAGR e-commerce forecast for 2020-2024, according to Statista. The primary shipping service providers for the last mile in Mexico are FedEx (27%), DHL (23%), and Redpack (12%).
India’s top three e-commerce retailers are Amazon, Flipcart.com, and Alibaba. India, likewise, is expected to have exponential growth in e-commerce by 2024, reaching a massive 27% CAGR between 2019 and 2024. In Q4 2020 alone, India saw a 36% increase in e-commerce order volume. India’s top three shipping service providers are Blue Dart, Delhivery, and FedEx, with the top three alone servicing almost 20,000 pincodes each. Due to the size and scale of India’s geography, the top ten (including DHL) allow for many options for e-commerce providers of all sizes.
The deduction from these vital statistics is that the giant e-commerce providers will likely rule the upcoming holiday seasons in late Q3 and all Q4—if only due to their ability to scale and volume. However, smaller e-commerce companies can still grow significant market share in the coming months and years by leaning on partners who can assist with technology and enhance customer experience through improved logistics. Being nimble and adaptable is a notable advantage for smaller retailers, particularly in emerging markets.
Four critical areas of the supply chain we believe are most important:
1) Invest or partner in technology to get your product from your e-commerce store to the doorstep of your customer in the most effective method possible,
2) Be innovative: try same day (Hyperlocal) and weekend deliveries
3) Decrease your shipping times by improving the last mile experience, and finally,
4) Be competitive with the costs of shipping
One Final Piece of Advice
We leave the last bit of advice for our emerging market e-commerce companies as they head into a busy Q4: don’t forget to personalize your offers using innovative technology and provide content driven off the end consumer like personalized 24/7 chatbots and customer support to give unparalleled customer service. In the end, while you may not be able to beat the Amazons and Alibabas of the world in terms of size and price, you can outperform them in outstanding customer service.
What’s Your E-Commerce Plan B?
October 19, 2021
The deadline to solve for the 2021 global holiday seasons will soon be in the rear-view mirror for most e-commerce companies. With only 24 days to the beginning of Diwali, 48 days to Hannukah, 75 days to Christmas, and 76 to Boxing Day, time is quickly running out to figure out how to get packages to consumers on time. Do you have your strategy and messaging approach ironed out yet? What about your logistics plan?
We know that we are in the ASAP economy. Essentially, consumers demand close to immediate gratification when they shop online, more often than not. This drive for speed continues to drive incredible stress on logistics partners across the globe. With current disruptions in the supply chain, we are not anticipating a smooth and seamless Q4 for e-commerce retailers. If you haven’t already, now is the time to set expectations with customers that their packages may be delayed if not ordered well in advance.
The reality is that stress on e-commerce retailers has never been more evident than what we see at present, with the possible exception being the peak of the global pandemic in 2020.Right now, there are cargo ships backed up in ports all over the world, a lack of containers available for product transport, worker shortages, and traffic congestion. And we are just a little over three weeks out from Diwali, one of the earliest of the more global holidays.
For example, in the United States, the USPS just announced starkly slower and more expensive service for first-class mail—a whopping30% slower, on average, than previous delivery times. Furthermore, they plan to increase package delivery rates throughout the holiday season and increase the use of ground transportation over faster and more reliable air to cut their internal costs. In short, the result for e-commerce companies is slower delivery, higher prices, and, undoubtedly, lower customer satisfaction.
UPS and FedEx, likewise, are increasing rates for Q4 by way of implementing surcharges. FedEx recently said, “We are entering another holiday peak season during which we expect continued high demand for capacity and increased operating costs across our network. ”UPS is anticipating a whopping five million packages daily over capacity, which will create an incredible bottleneck and delayed delivery for e-commerce retailers. To offset this, UPS plans to focus on higher-margin deliveries, air logistics, and adding two million square feet of additional cargo space.
So Now What Should E-Commerce Retailers Do?
First, we cannot stress enough that you need to establish expectations now that deliveries may not make it on time during the holidays. And, you need to have some sort of backup plan for customer inquiries like setting up online chats and 24/7 customer service lines.
Second, now is an excellent time to examine (or begin) relationships with 3PLs and key logistics partners. They can help satisfy the growing ASAP demand of consumers while increasing the chances of getting your products to the right place at the right time. These logistics partners have the underlying expertise to automate many aspects of the logistics relationship for e-commerce retailers. There are new entrants to the field that take care of the infrastructure needed to fulfill e-commerce goods. According to ShipBob, 3PLs enables e-commerce retailers to meet customer orders better using specialized technology, warehousing, and inventory management. Whether it be a 3PL or another logistics partner, there has never been a more opportune moment to explore your logistics options. The major integrators are making that abundantly clear.
Making the Last Mile Count
October 12, 2021
Are you fully prepared for what’s at stake if you neglect to meet customer expectations on an e-commerce delivery? With customer demands ever-increasing and driving shorter and shorter time horizons from shopping cart to doorstep, it’s crucial to ensure that your brand does not get damaged by a bad last-mile experience. It’s good to know which level of service your customer expects and how you can better offer expedited shipping solutions to them.
Do You Have to Offer Free Shipping?
Thanks to the somewhat misguided perception of “free shipping” through services like Amazon Prime, an annual subscription service, free is still king. If you cannot offer free shipping, some customers will undoubtedly choose to either go to a physical location or shop at a competitor who does.
Most customers(72%) will buy the same products online versus a brick-and-mortar store if they have the option of free shipping. Free shipping offers can make or break holiday online shopping experiences, with the majority seeking the lowest possible cost and quickest delivery on purchases. We recommend exploring the lowest consumer shipping fees (yes, even free) when creating your online cart experience.
The Good News
According to Statista, 41% of all consumers are willing to pay some amount for expedited shipping (same-day or next-day). Any time a customer agrees to spend even a nominal amount in additional shipping costs can mean more profitability (or at least less loss in last-mile expenses) for your business. If you are a smaller retailer, you may be able to promote offers of reduced tiered shipping rates for expedited shipping for a small fee and remain competitive.
What is the Operational Definition of “Now”?
As recently as 2019 (pre-pandemic), many customers were pleased to receive e-commerce parcels in three to five days. Today, in part due to changing consumer expectations and the ever-evolving growth of e-retail, companies are now having to solve for same-day as a more prescient delivery option. Now has become the norm, not the exception.
Making the Last Mile Count
With last-mile taking up as much as 53% or more of all logistics costs, e-retailers must be savvy with all aspects of the first-to-last mile. Is your infrastructure able to handle same-day, next-day, or two-day as a standard mode of delivery? If not, now is the time to solve for the significant competitive advantage of streamlined services to compete with the Amazons and Alibabas of the world. Everyone needs to differentiate in this global marketplace. We recommend offering quick and low-cost shipping to come out on top this coming holiday season.
Have you thought about going beyond the traditional carriers if they are at capacity? Have you considered Uber, Door Dash, and other more non-traditional methods of getting packages to doorsteps?
The last mile is the most significant pain point for e-commerce retailers, and it accounts for most of all delivery costs. Take advantage of new technologies and companies offering out-of-the-ordinary last-mile opportunities to gain competitive advantages for your business.
The Global Holiday Season is Closer than You Might Think
September 16, 2021
The pandemic has forever changed the way people buy goods and services. Now, more than ever before, customers are seeking online e-commerce solutions and home delivery to solve everything from basic needs to more expensive technology and appliance purchases. While most people are just beginning to think about fall and back to school, the 2021 holiday season is closer than you might imagine. With less than 50 days to Diwali and only 100 days until Christmas, companies will need to identify their e-commerce logistics strategies and implement them now rather than later.
At least in North America, the major push for the holiday shopping season is expected to start in a few weeks from now, rather than in late November or early December. In a recent study, Facebook found that there was a stark 47% increase in U.S. holiday e-commerce sales last year, and “nearly half of shoppers we surveyed also started shopping before—and often in place of—in-store doorbusters on Black Friday.” We have seen similar trends in Asia, Europe, and Latin America.
Last year, many e-commerce companies felt this pinch of increased demand. The primary delivery carriers: UPS, FedEx, and USPS, often failed to deliver products on time, disappointing customers and damaging e-commerce brands. 2021 is only expected to compound the issue for companies hoping to reach their customers’ doorstep with timely deliveries.
According to Qubit, close to a third of all shoppers will increase the number of products purchased online versus 2020. With this substantial increase in online shopping, e-commerce companies will need to figure out how they will handle substantially more volume than in years past—coupled with increased expectations of how quickly a package should arrive.
E-Commerce Companies Must Solve Logistics Challenges Now or Risk Falling Behind
The pandemic continues to add significant wrinkles in e-commerce logistics. The COVID-19 variants, Delta variant being the main one right now across much of the globe, will continue to stress all parts of the supply chain. Additionally, there are labor shortages everywhere, from the retailer to the warehouse. Salesforce suggested in August that “logistical challenges could pose a $223 billion retail headwind in the second half of the year.” The logistical hurdles are significant, and we expect retailers unable to adapt in time will not stay in business for long.
Retailers must create products their consumers desire, market them successfully online, and deliver in as little as a day. With more and more customers discovering products on their mobile devices and making quick, seamless transactions, e-commerce companies need to start putting all their logistics systems in place or risk potential failure as a brand.
The Race to Solve Last-Mile
UPS CEO Carol Tome’ predicts that 2021 parcel delivery demand will exceed capacity by approximately “5 million parcels a day.” Translated into practical terms, the expected rise in e-commerce this fall will require additional last-mile providers to perform essential logistics services. Few providers can provide actual shopping-cart-to-door experiences for e-commerce retailers, while most will focus solely on last-mile. Because the last mile accounts for over half of all delivery expenses, it is the most cumbersome and challenging obstacle for a retailer.
If you are a retailer and haven’t figured out your e-commerce logistics solution, it may soon be too late for this holiday season. The key to success is finding a partner who can seamlessly get your packages from your online store to your customer’s door in just a few hours or days. The time to act is now.
Great Brands are Transparent
August 13, 2021
Very simply customers want be communicated with and to know the truth at all times. This is no different than what we expect from others in other areas of our lives. E-commerce companies must ensure they are communicating appropriately and providing transparency across the entire customer journey—from the ads that drive prospects to the site—to the package being delivered to the customer's front door. This has become even more important now as a result of the pandemic because it has changed the way companies sell, market, and deliver their e-commerce experiences. In short, your brand experience is enhanced by great customer communications and transparency.
Inside companies, the term “Brand” is often used as a sword and a shield. All departments will use phrases like “that will hurt the brand” to defend their position and their departments. Making sure you communicate across the buying process and across the customer journey should be an easy choice. It solidifies your brand and ensures your customers feel you are living up to your brand promise, whether it is stated in your positioning or simply expected by the customer. A customer should be able to see things like price, offers, complimentary items, inventory and the package delivery process easily.
On the delivery side, it is not often seamlessly integrated into the customer journey. E-commerce companies often do not provide the communication customers want. Think of the excitement a customer has in waiting for that new phone, jeans, sneakers and etc. Their anticipation is high in many cases as they wait to receive that item. It is also the last chance to ace that transparency and communication with the customer. Regardless of size, all e-commerce companies need to be able to communicate accurately where a customer's package is according to the given milestones—from printing the label to, the first-mile, air transportation, and finally to the last-mile and delivery at destination. Customers hate surprises and even if there is an issue, people are willing to accept some level of issues.
Making sure that transparency is effortlessly part of your brand is not easy. Organizations need to apply the principles of transparency across all components of the customer journey. Efficient communication and collaboration with internal stakeholders and external partners is essential. Having the technology to enable constant, accurate and transparency that is accessible via mobile or desktop devices is a must to ensure an excellent customer experience, that ensures repeat business. If you build transparency into your brand, you will have more repeat customers, more word-of-mouth recommendations and will build great customer loyalty along the way.
The Evolution of ASAP Delivery
August 13, 2021
Economies around the world have adapted to fast-evolving consumer behavior as Covid has changed the world in many ways. The shift to e-commerce across the globe has certainly been one of the biggest changes. In countries like Mexico and India who had a slow, but growing, adoption of e-commerce prior to the pandemic have seen an increase of over 30% in e-commerce purchases. It is clear that those who formerly had avoided e-commerce, preferring to shop in stores, malls and in shopping throughfares tried and liked the convenience of online shopping. As consumers do not typically revert and go backwards, home delivery of goods will likely become the standard for many consumers going forward.
This disruption has had an effect on all stakeholders. Whether they are working from home or part of a generation that see digital commerce as the norm they expect their packages delivered to them, and fast. Many retailers who have just moved into e-commerce are changing their logistics and delivery practices. They now can take orders through multiple channels and need fast and reliable shipping, tracking and mobility to get the packages into their customer’s hands. The bar for shipment delivery and customer service has been set by the large online retail purveyors such as Amazon, Ali Baba, Mercado Livre and the like, all across the world. This is a bar that individual retailers must also reach to provide an expectation of customer service that consumers are used to. These expectations will only increase as consumers expect not just next day, but increasingly, same day delivery. And the newest stakeholders are delivery companies who are rising to meet this surge in demand for shipment delivery commensurate with online purchasing. They know they must deliver service that gets the package to the customer when they want it and how they want to receive the package.
The new delivery is really an As Soon as Possible (ASAP) transporter. A delivery company needs to have the capacity to ensure that the package is delivered from the online shopping cart to the customer’s door. Another factor is the network. Your network needs to be robust and always connected, in order to meet the needs of the retailer and their customer. Transaction transparency from end-to-end is a must for the transporter, as every stakeholder should be able to see where the package is along every milestone on the journey, from the retailer to the customer’s door.
All of this needs to be instant, in real-time. If a transporter has the right capacity, with the right network and featuring great transparency—then speed is a given. But in countries where e-commerce is just taking off, these components may not in place for a delivery provider.
SmartKargo has a reliable delivery resource for first- and last-mile transport in place for our customers to fill the need in these situations around the world. It is called, kart2door, our new delivery network that is available on demand for our customers adopting our e-commerce technology. Kart2door can be created to supply the capacity, speed, transparency and put the required network in place, across the world. In doing so, we provide a colossal win for Retail with a single solution that covers the entire e-commerce delivery chain. More importantly, it is a win for the customer, by keeping the customer informed at all times from purchase through delivery—ultimately getting their purchased product to them ASAP. Kart2door is an innovative solution that is built upon phenomenal advanced technology. We provide ground transport for packages using airline capacity and network strength for long distances, and bring in innovative hyper-local models making the ASAP factor easily possible with same day or next day delivery. Retail companies that are evolving to meet their customers’ needs must have a delivery solution that can deliver on the promises made to your customers.
For more info, look us up at https://www.kart2door.com. We help retail
get there, real fast.
Last-Mile Delivery Critically Important to Brand Loyalty
August 12, 2021
Online consumers expect consistent brand experience and expedient delivery from the point at which items are placed in their shopping cart to when they arrive at the front door. Perhaps the most significant threat to retailers getting constant brand loyalty is an issue with last-mile delivery to fulfill their consumer goods.
According to LoyaltyLion, retailers are up to 50% more likely to sell additional products to an existing, loyal customer than acquiring a new customer for the same or similar product. This translates to a meaningful conversion rate of online sales over time—provided that a company’s last-mile delivery and overall logistics operations can fulfill according to customer expectations.
During the pandemic, we have witnessed a solid conversion to e-commerce. With that conversion, we also see increasingly higher demands for same-day, next-day, and second-day shipping solutions for products. We are confident that these new dynamics will continue to expand in the coming years, not retreat to pre-pandemic levels. Customer expectations are closely tied to brand loyalty, and retailers must pay close attention to all aspects of product production, shipping, and communications.
Should logistics falter and a same-day, next-day, or two-day delivery fail to make it on time to the customer’s door, that same customer may not purchase from the retailer again. Brand loyalty will suffer, and customers may express dissatisfaction in online forums, reviews, and social media. Impacts on brand loyalty mean retailers will have to work significantly harder to acquire a new customer base. 50% harder, to be exact.
The last mile, while accounting for up to half of all logistics expenses
for a company, is indeed the most critical when it comes to customer
satisfaction—provided the products are as promised and expected by the
end-user. The threats to a retailer’s brand have become very real in today’s logistics
ecosystem. Without a reliable logistics partner, retailers are gambling their
brand reputation. Ultimately, that brand is their most important asset.