The COVID-19 pandemic has disrupted supply chains on an unprecedented scale. But along with the difficulties, many people have gradually switched to e-commerce and embraced new opportunities.
First is the opportunity to increase the reach of e-commerce, its importance, and change the habits of stakeholders, from cargo owners and freight forwarders to consumers. As consumers shift to online transactions, the success and survival of companies depend on their ability to reach customers online, while satisfying their needs, from increasing product choices, providing advice, and after-sales service, to delivering goods to consumers safely and quickly. In many cases, companies have to adopt an omni-channel model to suit different customer groups.
For example, according to Digital Commerce 360 statistics, consumers on Amazon spent $11,000 per second on online shopping, and Best Buy’s online sales have increased by 155% since March 2020, illustrating the surge in online e-commerce activity during the Covid-19 pandemic.
Recent surveys show that even after the pandemic has passed, the business environment and shopping habits will not completely return to the pre-pandemic era. An Accenture survey found that consumers will increase their online shopping from 32% to 37% after the pandemic.
Many astute companies are realizing that e-commerce will remain a key sales channel for manufacturers and packaged goods retailers after the pandemic. Investing in factories or distribution networks to adapt to new trends will help shape future business operations. However, switching to beneficial omni-channel models will require more tools and platforms than just a website or some simple online marketing channels. Companies need to consider the quality and reliability of their entire supply chain and how to minimize the cost of fulfilling e-commerce orders, including logistics and transportation planning as well as multi-carrier parcel shipping strategies.
To succeed, companies will need to develop assets and expertise in these areas or work with partners who can fill these gaps. For example, TAGG Logistics and their subsidiary Le Saint Logistics recently joined forces to close the loop on e-commerce fulfillmentt with a nationwide transportation hub and fulfillment center network.
Retailers undergoing digital transformation have more new customers.
During the pandemic, companies have proven more loyal to brands than retailers, creating great opportunities for retailers with inventory. According to Digital Commerce 360, 30% of consumers shop at different retailers when their preferred brands are not available or delivery will be delayed. Of those consumers who switched to online shopping during the COVID-19 pandemic, 45% said they plan to continue shopping with new vendors they found online.
A Numerator survey shows that three e-commerce groups were very successful during the Covid-19 pandemic: Walmart with 49% new online shoppers and 40% continuing to buy, Target with 29% and 25% respectively; and CVS with 9% and 18%.
The lesson about logistics for e-commerce during the pandemic becomes clear: timely delivery and always having a ready supply. TAGG Logistics provides customized omni-channel fulfillment services to support the consumer brand experience with resources and delivery expertise to ensure same-day fulfillment as well as next-day and two-day delivery to most locations in the US. The agility of the omni-channel environment is evident in the increasing trend of using “Click and collect” – buying online and picking up at their chosen location/store (BOPIS). Consumers are driving this trend and retailers are benefiting from it. Three-quarters of consumers recently surveyed by Numerator have placed home delivery orders and more than half have placed “Click and collect” orders.
The largest providers of these channels are some of the biggest beneficiaries including Walmart, Target and CVS. Numerator says two-thirds of consumers say they will continue to choose “click and collect” post-Covid-19.
Meeting the high and challenging demands of omni-channel consumers requires logistics companies to have a comprehensive solution with reliable facilities, infrastructure and information systems.
Manufacturers score points as consumers care more about brands.
The supply of goods in the e-commerce environment has become more diverse and dynamic. However, many products and brands have not yet been put on electronic shelves, so online consumers have to choose other brands. Digital Commerce 360 surveys show that 44% of shoppers in the US tried at least one new brand during the pandemic because their familiar products were not available or delivery would be delayed.
Consumers who are aware of new brands have created opportunities for businesses to find new customers. Notably, customers are increasingly open to new experiences in the e-commerce environment and are looking for opportunities to buy directly from manufacturers. Digital Commerce 360 shows that 39% want to shop directly on the business’s own website instead of on general shopping websites.
The delivery model to lockers is also increasing. This is an opportunity for consumers to receive goods delivered to their door while still ensuring safety protocols, limiting contact and being proactive in pick-up time. This is also an opportunity for brands to introduce their products. During the pandemic, Klaviyo found that twenty-three percent of consumers recently signed up for an online shopping service.
How to impress consumers and make them come back after the first purchase? The answer is: not just the product, but their entire experience in that transaction.
COVID-19 has forced companies with or without online sales plans to adjust to adapt to the new context.
According to Numerator, households switched to online shopping for essentials or items that accounted for the main part of their spending during the pandemic and shopped online more often and the volume for each transaction increased compared to when they shopped at traditional retail stores.
Most traditional consumer packaged goods (CPG) companies are not built to scale rapidly, a very costly and complex process if they want to achieve completion. Therefore, the risk is high for companies that choose to self-fulfill e-commerce. Companies need to find processes that ensure orders are fulfilled on time and accurately; A bad experience leads to bad reviews, not retaining customers and even damaging the brand they have worked so hard to build.
Third-party logistics (3PL) providers have proven their ability to meet increased demand and help their customers scale. In addition to carrying out e-commerce activities for some of the most successful companies in the US, these companies are also successful in fast-selling segments, segments with high pressure on delivery time or requiring turnaround ability. fast rotation.
Mitigate risk by diversifying your warehouse and distribution center network.
Hormel is one of many businesses, manufacturing facilities, and fulfillment centers facing closures due to the COVID-19 outbreak.
The negative impacts of the pandemic could force many businesses to shut down their distribution systems or at least damage their brands. Diversification is a necessary requirement to reduce risk in the order fulfillment process, the more fulfillment options, the less risk.
As the nation transitions to a “new normal” of both fighting the epidemic and restoring economic and commercial activities, e-commerce and e-commerce logistics are expected to provide consistent solutions for consumers and businesses.
Businesses need to create a consumer-oriented supply chain, prepared to respond to any fluctuations that the Covid-19 pandemic and the market create in a volatile and unpredictable context like today.
VITIC compiled from https://www.iwla.com/converting-covid-19-challenges-into-e-commerce-order-fulfillment-opportunities/
Reference: Distinguishing between Omni Channel and Mutil channel
What is Multi Channel?
This is a model that has been developed for a relatively long time since technology began to develop. Accordingly, this model will use many channels to attract customers. Businesses apply 5 popular sales channels as follows: POS – traditional retail point; Social networks – To promote businesses and sell directly on Zalo, Facebook; Website – Professional brand introduction and direct sales channel; Mobile application (mobile app) – selling via smartphone platform; Affiliate – Selling through a network of collaborators or through another website.
The highlight of this model is that each channel will have a separate sales and management system with its own warehouse, so the process is also different. Therefore, this model shows many drawbacks such as easy disorder in inventory management with too many separate management systems, inflexibility in inventory between channels (lack of goods channel, excess goods channel), etc. Therefore, this is a model that consumes a lot of resources, is difficult to manage, and is not effective in sales
What is Omni Channel?
This is a customer-centric model in reaching out through sales channels, maximizing sales from offline to online channels with just one system to manage.
All sales channels will be synchronized with each other in terms of management information such as products, customers, inventory, promotions, order fulfillment. Thus, this synchronized management chain will bring a consistent experience to customers anytime, anywhere and help you manage your business more easily.
The outstanding advantage of omni channel compared to multi channel is the unity in management, helping you to organize well, save resources and operate your business effectively. Managing multiple channels with the omni channel model provides you with a panoramic picture of inventory, shipping, cash flow, etc. so you can predict more accurately and easily make decisions for future plans. Besides, Omni channel is also easy for you to measure the operating efficiency of each store, compare stores with each other, and support each other in the online distribution chain to promote sales increase for businesses.
Source: http://logistics.gov.vn/