Logistic business
Retail and eCommerce Delivery Challenges
May 25, 2022
One prominent challenge with retail and eCommerce is order fulfillment, as specific factors hinder the efficient delivery of customers' purchases. This issue results in customers waiting longer periods to receive their orders, damaging the retailer's rating and public perception.
In this article, you'll learn about the specific challenges that plague the delivery sector of retail and eCommerce businesses and possible strategies for evading them
Warehouses play an essential role in eCommerce as it allows businesses to quickly find, package, and ship items to customers. Furthermore, the closer the warehouse is to the customer's address, the more likely their delivery will arrive early, and vice-versa.
According to several news articles and logistics experts, the shortage of commercial warehouses and industrial space is the latest side effect of the pandemic. This problem is due to increased online shopping, which shows no signs of slowing down.
While merely buying more warehouse space to tackle the problem may seem like the most obvious solution, the increased costs in real estate has made this infeasible. In other words, warehouses are in high demand but in short supply due to their price.
Due to the high cost of buying a warehouse, research from Linnworks reveals that 4 out of 5 retailers repurpose part of their store to tackle the challenge. While this remedy doesn't bring the warehouse any closer to the customer, it ensures orders can be packaged and shipped since they're more available.
Similar to warehouses, there's also a shortage of truck drivers, numbering approximately 80,000 and may double by 2030, according to the ATA. This factor is exceedingly detrimental to retailers and eCommerce businesses as freight carriers are a crucial component in the distribution of goods.
Essentially, having fewer truck drivers translates to fewer goods moving to their destination, and without a consistent flow to and from the warehouse, the entire supply chain is affected. Customers will have to wait additional hours or days to receive their orders, thereby directly affecting the business.
Companies that operate the B2B model will suffer since trucks are essential for refilling their stock and supplying bulk purchases to their customers. In other words, these organizations will have less stock to sell and fewer orders fulfilled monthly.
While retailers and eCommerce companies can't directly increase the number of Truckers, they can set their businesses to meet customers' needs by preventing massive out-of-stock situations.
This remedy is possible by automating the inventory management process, giving merchants better insights into real-time order statuses. Furthermore, business owners can automatically determine fulfillment workflow and forecast supply and demand data through sales patterns.
Currently, customers shop more often and in more places than ever despite the global pandemic and supply chain challenges. This increased shopping trend is mostly attributed to the lock-down and social distancing rules, resulting in people having their goods delivered to their doorstep.
While an increase in demand is a positive occurrence for businesses, the supply chain stains make it difficult to consider the event a positive experience.
Businesses struggle to meet customers' expectations, which can be more detrimental to smaller retailers and eCommerce businesses that don't possess sufficient financial reserves to stay competitive.
One recommended option for tackling this increased demand is for businesses to have the proper tools to keep track of all selling channels and optimize their inventory distribution correctly.
By employing the correct platform, businesses can forecast increased demand for specific products and ensure their warehouses are stacked on time to meet the need. It's an excellent way to stay competitive, especially with other supply chain stains.
Retailers and eCommerce businesses have faced challenges with lowering the cost of transportation before the pandemic. However, the introduction of Covid-19 has made the issue a bigger worry than in previous years.
Controlling Transportation costs directly impacts the company's profit as reduced costs mean a bigger bottom line. However, with current economic issues, warehouse scarcity, and increased demand, transportation rates remain significantly high with few opportunities for relief.
In addition, the recent plummeting of supply truck drivers during the pandemic played a substantial role in raising transportation costs as several factors prevented the drivers from working.
It's worth noting that the recent increase in fuel prices directly contributes to transportation costs, making it even harder for business owners to save on product delivery. One way to tackle this problem is to get another manufacturer closer to your business since it reduces the distance needed to reach your location.
Additionally, retailers can also increase the number of goods they buy, reducing the number of times the company needs to reach your business. However, ensure your warehouse is sufficient to handle the increased purchase before opting for this remedy.
Despite the significant problems plaguing the eCommerce industry, many customers search for free shipping amongst retailers, creating more pressure on the delivery chain. Essentially, companies that can meet this delivery requirement receive more patronage than less fortunate ones.
This challenge is mostly due to the eCommerce giant, Amazon.com, which popularised and heightened the expectation of free-shipping, leading to what's now called "The Amazon Effect."
A common way to tackle this pressure on the supply chain is to offer free shipping on specific items, especially those with greater margins and can absorb the cost. Retailers can also create a membership program where customers pay annual fees for free shipping on some or all items.
The challenges that plague the delivery sector of retailers and eCommerce businesses are substantial and won't disappear overnight. However, to ensure businesses remain competitive during the discomfort, it's best to leverage technology and automation to facilitate the optimal distribution of goods in warehouses and across other selling channels.
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