Lack of logistics expertise hinders independence from marketplaces

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.