In the future, e-commerce retailers seek to act more independently of online marketplaces. However, as a recent study shows, deficits in key logistics skills are proving to be an obstacle.
Online marketplaces have long since established themselves as an essential part of European e-commerce: According to a recent study conducted by Accenture and Geodis, in the context of which a total of 200 European and US companies were surveyed, almost one in six brands (59 percent) trust in virtual sales platforms. In addition to providing access to a wide range of potential customers, these platforms also compensate a lack of logistics infrastructure and resources.
However, the visibility on Amazon, eBay and Co. also comes with disadvantages: While the importance of marketplaces has increased with the Corona pandemic, most of the online retailers surveyed consider excessive dependence on them to be unsustainable. Not least because significant margin shares have to be passed on. They would like to have a larger share of the growing e-commerce business and want to set other priorities in the near future.
Future priority: More direct sales via own channels
Almost two-thirds of the online retailers surveyed (64 percent) are striving for a shift to their own e-commerce channels. They describe reducing their own dependence on virtual marketplaces as the first or second priority for the next six months. A majority of US retailers (77 percent) and more than half of their European counterparts (56 percent) are seeking to generate 20 percent of their total sales via their own websites within the next three years.
At the same time, every other company admits that their own e-commerce potential is still limited due to the logistical possibilities.
Expanding cross-border logistics, improving customer experience
In order to generate more sales through their own channels, online retailers must expand their logistics capabilities. This does not only include improved e-fulfillment and flexible delivery options, but also a better visibility of shipment tracking and simplified returns processes. According to the study, the surveyed retailers are aware of the importance of these factors when it comes to creating a positive shopping experience. They are committed to providing greater shipping flexibility and simplifying returns. However, the majority (76 percent) of respondents identified improving the customer experience as their most significant long-term challenge.
International shipping: reducing delivery times
The timeframes for deliveries are, for example, still upgradable: For international (intercontinental) shipping, none of the American brands surveyed are offering two to three-day deliveries yet. However, at least almost one in five of the companies surveyed (17 percent) is keen to make this service possible within the next three years. To date, only 15 percent offer a four to five-day delivery service, although the majority (66 percent) would like to see this goal achieved within the next three years.
In comparison, the European online retailers surveyed are performing even below that benchmark: According to the study, they currently do not offer two to three day international or intercontinental shipping, and only seven percent plan to do so within the next three years. Delivery timeframes of four to five business days are only possible for four percent – alas, the majority (76 percent) of European retailers surveyed hope to introduce this service within the next three years.
Lack of real-time transparency within the supply chain
The survey also shows that the potential of real-time transparency in the supply chain has hardly been exploited to date – a fact that is confirmed by the 13th Hermes Barometer.
According to the authors of Accenture and Geodis, a transparent supply chain is essential in order to ensure product availability, offering a wide range of shipping options and keeping customers informed about the shipping status. To date, only a small percentage of the companies surveyed are able to obtain real-time key performance indicators for their own supply chain: Only ten percent of European and 25 percent of American brands state that they already have access to this information. In many places, analytical capabilities are still rudimentary, and data is only generated in fragmented form, i.e. manually and without clear control.
To improve logistics performance, increase transparency and shorten delivery times, companies should consider working with an external service provider. Logistics experts such as Hermes International, a division of Hermes Germany, support companies along the entire supply chain with taylored solutions for efficient cross-border logistics.
All results of the study “Getting E-Commerce Logistics right” which are cited in this article can be downloaded here after providing your contact details.