Whether Omnichannel, Experiential or Voice Commerce, a lot of things are changing very rapidly. An increasing number of companies are joining the online marketplace segment. Small and medium-sized retailers, in particular, are not having an easy time competing against big players like Amazon. Demands are rising and digitalization is creating a new sense of self. One that requires immediate satisfaction of needs and personalized service. Not to forget flexibility and transparency in ordering and delivery. Retailers are now faced with the challenge of doing justice to this sense of self, while implementing efficient logistics solutions that comprehensively cover warehouse management as well as dispatch and returns management.
Response time vs. profitability
The balancing act of keeping inventories low, on the one hand, and maintaining attractive delivery times for the customer, on the other, is hardly a challenge for the majority of all retailers. ERP and APS systems are used for foresighted, realistic planning of all business activities anchored in the value chain including purchasing, logistics and finance. Numerous open source offerings also offer smaller retailers simplified, free access to Enterprise Resource Planning.
Search and pack
The times when buyers come to the product are long gone. This also means that, in addition to procurement and storage, putting packages together and shipping are now also part of retail business activities. This results in a need for more time and resources. In many places, warehouse management systems are already being used for these tasks. Due to extremely small shipping volumes, however, small and medium-sized retailers usually do not have access to the professional warehouses where the latest technology is used for searching and packing. This is one of the reasons why large marketplaces like Amazon dominate online retail. In order to circumvent this challenge, numerous fulfillment service providers such as odc, fuljoyment or byrd are offering network solutions.
If the mountain does not come to the prophet…
The third challenge facing the digital retail industry is the shipping process. Customers don’t care how packages gets to them as long as it is fast and safe. Transport management requires comprehensive planning. It can even be impossible for an individual to combine this with constant transparency pertaining to delivery. This is one of the reasons why transport management systems are now a must. In the future, delivery fully driven by artificial intelligence is not unthinkable. The first tests have already been carried out.
Optimization through digitalization
For the entire e-commerce sector, digitalization signifies an increasing logistics volume, smaller orders, more returns and damages. For small retailers in particular, this can only be achieved with a good network and the right service providers. Then the main goal is attainable, namely the optimization of the order and dispatch processes, resource employment and the development of an interactive network for small and medium-size retailers as well as founders.
The advantages of digitalized logistics and fulfillment processes at a glance:
- Tremendous cost savings
- Error minimization
- Improved customer satisfaction
- Global sourcing
- The possibility of opening up new sales markets
- Ensuring data quality
- Establishment of a global network
The bottom line
To harness the full potential of artificial intelligence in logistics, small retailers and start-ups should rely on collaboration with external service providers, who have access to large warehouses and logistics centers. Customer loyalty is playing an ever-increasing role and therefore all activities should be centered around ensuring buyer satisfaction. If certain basic rules such as clear inventory management are followed, nothing can block the path to success and even past the big players.