Over the years we have seen significant shifts in the way consumers shop. We have watched closely as the the increases in ecommerce shoppers has changed supply chains and the ways in which goods are moved throughout the country. The holidays in 2017 appears to be no different, as online sales are predicted to rise once again.
2016 brought about record cyber shopping numbers. Between Nov. 1 and Dec. 31, online sales totaled to $91.7 billion, an increase 11% from $82.5 billion from 2015. There were $3.45 billion in online sales on Cyber Monday alone. These insights remind us of the importance of creating a holiday shipping strategy that accounts not only for distributing goods to brick-and-mortar stores, but also takes into account the effects of online shopping.
Here are a few ways that online shopping will affect the logistics industry this holiday season.
A demand for faster and cheaper shipping
Consumers have had years to become comfortable with online shopping, but many people are still resistant to paying shipping prices. The larger companies like Amazon, Walmart and Target are leading the way in making shipping affordable (and by that we mean free) for consumers. This trend is making is expensive for smaller retailers who need to entice online shoppers to purchase from them. The need to cheaper and fast shipping has increased the prices shippers must pay in order to meet this demand.
It is now more important than ever for retailers to invest in strategies such as LTL freight shipping in order to reduce their shipping costs and better serve holiday ecommerce shoppers.
An increase in drop shipments
Many distributors and manufacturers have recognized the increases in online shopping as an opportunity to establish drop shipping programs with retail partners, increasing the need for carriers that can deliver products direct to customers. Distributors and manufacturers are now faced with the decision of keeping their fulfilment for these programs in house or outsourcing them to a reliable 3rd-party logistics provider.
The challenge of being able to coordinate and fulfil orders to consumers while maintaining regular shipments to regular retail and wholesale customers is now something that suppliers and manufacturers are faced with.
Smaller orders means more pick and packing
For those who manage their own warehouse and distribution centers, pick and pack is a familiar process. But while normal shipments to retail locations consist of full truckloads that have large quantities of fewer items, direct to consumer sales and shipping has created a larger need for better pick and pack strategies. Both retailer and distributors who sell direct to consumers must make room for workflow changes that consist of small pick and pack orders (that consist of one or two items) that must be moved quickly.
Even after the holidays are over, the logistics industry keeps on trucking. Increases in online sales are resulting in big increases in reverse logistics as gifts and purchases are returned throughout January and February. It is incumbent upon shippers and retailers to establish a reverse logistics process that enables them to handle the increases in returns, all while keeping in mind that quality customer service must be maintained.
Get ready for the holidays today
It’s not too late to create an effective shipping strategy for this holiday season. Choosing the right partner is the first step in the process. We want to hear about your shipping goals this holiday season. Contact King Solutions to talk about how we can help you bring some holiday joy (and products!) to your customers.