Across the world, ecommerce businesses are increasingly focused on navigating the downturn. How they plan for and respond to the situation will determine how well they emerge from it. The winners will continue to grow, despite the increased uncertainties they face. Whereas, the too-cautious will be constrained and adopting a self-damaging survival mindset.
It is clear that ambitious product businesses should be looking at the emergence of DTC as a great opportunity to add an incremental revenue stream to their earnings potential. However, the need for eCommerce businesses to achieve efficiency extends beyond DTC delivery, important though that is. Ultimately, whatever channels they focus on, more organisations will realise that when it comes to order fulfilment, the answer should be all about agile, real time execution.
Addressing efficiency and sustainability in parallel
There are multiple business drivers in the need to optimise efficiency in the last mile of delivery. One of the most urgent is that the supply chain has to start becoming more efficient in reducing packaging and eliminating risk. That’s beginning to happen but more needs to be done.
Awareness has heightened regarding half-empty delivery vans being driven round the country, as well as multiple deliveries from the same retailer to the same address on the same day. To address this effectively, organisations need the spirit of innovation, together with the necessary business agility.
We are already witnessing some brands making tentative steps towards consolidated deliveries, especially where delivery speed is less of an imperative for the consumer, by offering a preferred delivery day vs soonest possible, for example. Looking ahead, and also the individual fulfilment provider consolidating their own deliveries, we would expect to see moves towards enhanced collaboration across competitors. The public sector has a role to play, perhaps with legislation that encourages retailers to collaborate on delivery runs. Some European cities are already considering a ban on individual deliveries in central areas and replacing them with consolidated customer deliveries from edge-of-town shared staging centres.
We will also see the push towards nearshoring and re-shoring the supply chain gather pace during 2023. This is primarily being driven by the business need for responsive chains that can accommodate unusual changes in demand patterns more readily as they emerge. Again, agility and enhanced efficiency are the core requirements here.
A consumer centric operation allows the business to drive up loyalty and as a result more closely tune the service required to customer needs, reducing costs even as inflation and the cost-of-living crisis continue.
A route map forward
So how can ecommerce sellers, particularly those looking to integrate new DTC channels into their offerings, best achieve the agility to keep customers engaged (and away from their competitors) through economic turbulence?
To deliver the level of service that ensures customers remain onside, they will, above all, need to know where all their stock resides. Organisations are crying out for a single-pane-of-glass view of inventory across their landscape – from traditional warehouse to retail store to fulfilment centre. That will enable them to dynamically plan where to best source stock from. This is to fulfil the specific requirements of each customer – and keep them loyal through the downturn.
In parallel, they will need to match demand with viable sources of stock in real time and consider the most sustainable delivery option all in one environment. Those organisations that deploy Distributed Order Management (DOM) understand they need to deliver multiple channels-to-market to engage and retain customers. But they must also find new ways to drive operational efficiencies across complex warehouse environments in these difficult times.
That’s why we see a growing role for DOM, combined with ecommerce capable warehouse operations as the downturn plays out.