The e-commerce world continues to evolve, driven by technological advancements, changing consumer behaviours, and market dynamics. In 2021, the European B2C e-commerce turnover reached €718 billion, marking a 13% increase from the previous year. Projections indicate continued growth, with revenue expected to surpass €1 trillion by the end of 2024. E-commerce businesses must focus on automation and digital transformation to meet the rising demand and changing consumer expectations.
Enjoying rapid growth in e-commerce sales is a significant problem to have. However, scaling up too quickly without proper planning can often lead to periods of poor service. It’s decision time! Do you outsource warehouse and delivery operations to a third-party logistics company (3PL)? Or do you expand and upgrade your in-house operations and take on more fixed costs and new commitments? We discuss how the e-commerce world is changing and what you need to do to scale up your operations, whatever your volumes.
Distributors and retailers combine online and offline channels to provide a seamless shopping experience. This includes online and in-store purchases, click-and-collect, and return-in-store for online purchases. More e-commerce businesses are offering subscription-based models, providing customers with regular deliveries of products, often with added convenience and savings. Customers want consistent service across all touchpoints. The challenge is to manage inventory in real-time across all channels.
More consumers are shopping on their smartphones and tablets. Mobile payment solutions like Apple Pay, Google Wallet, and various mobile banking apps make it easier for consumers to buy on the go. Dedicated branded shopping apps offer personalised experiences, exclusive deals, and push notifications to engage customers. Social media platforms like Instagram, Facebook, and TikTok use AI, machine learning and chatbots to provide personalised shopping experiences. Augmented Reality (AR) enhances the online shopping experience, allowing customers to visualise products in their environment before purchasing.
Warehouses and fulfilment centres increasingly use an Inventory Management System (IMS) and/or a Warehouse Management System (WMS) to optimise their logistical operations. E-commerce companies are using automation tools such as robotics and sortation systems to speed up order processing and reduce errors. Customers want flexibility, including same-day or next-day delivery options and easy returns. To achieve this, Transport Management Systems are used to manage various such as shipping, tracking, and delivery.
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As your business grows, you need the operation to become more sophisticated. A main focus must be having reliable product and sales data to support your business goals. Continuing growth, seasonality, and changes in customer profiles can make a specialist shared-user 3PL option very attractive. You benefit from shorter contract commitments (e.g., three years) and synergy benefits from sharing labour, a warehouse management system (WMS) and space. The 3PL typically provides sophisticated picking strategies, pick-face replenishment, high stock accuracy, and efficient packing and despatch. They will have strong relationships with transporters and couriers, giving you flexibility and more attractive rates.
Larger-scale e-commerce businesses tend to operate their warehouse operations themselves or work closely in partnership with a dedicated 3PL. Whatever the direction you choose when ramping up, there are costs and technology implications. Here are our suggestions:
Do you manage more than 5000 packages per day within your facilities? You may need to ramp up your automation solutions to manage increased order volumes and stay competitive efficiently. These may include adding automated sortation and shuttle systems or autonomous mobile robotic vehicles. The e-commerce landscape is becoming more dynamic, customer-centric, and technologically advanced. A high-volume operation requires an efficient omnichannel strategy and a smooth integration with other supply chain operations. This is reshaping how your business will operate in future. Will you be ready?
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Are you looking to scale up your e-commerce operation, enhance customer satisfaction, and achieve sustainable growth? Contact SCG today to learn how we can help you streamline your supply chain and drive your business forward. Ring us at +44(0)1926 430 883 or email at info@sccgltd.com.