The rapid acceleration of online shopping is forcing ecommerce shipping to evolve and it’s likely this transformation will continue throughout 2022. Here are five predictions for trends that will emerge or intensify over the course of the next twelve months and beyond.
- Expect a broader mix of retailers to adopt gig economy couriers
During the pandemic so far, it has been mainly restaurants, cafes, supermarkets, and grocery stores embracing on-demand courier and messenger services to add delivery capabilities as orders soared. In 2022, we are likely to see this trend continue and broaden as other retail sectors opt to deliver products directly from the store to the consumer, often within just a couple hours of order placement.
Traditional carriers such as DHL can’t do two-hour delivery, but the likes of Uber and Lyft can. And who says they can only deliver food and groceries? In the UK, Currys, the consumer electronics retailer, has recently partnered with delivery service Uber Eats to offer Londoners the opportunity to grab emergency chargers, printer cartridges and other items in as little as 30 minutes. In the US, drugstore company Walgreens Boots Alliance is partnering with DoorDash, Uber and others to offer same-day delivery – in as little as one hour.
- External data feeds and machine learning will help optimise delivery performance
Optimising the ecommerce delivery experience while controlling transportation costs is more important than ever for online retailers. And in coming years we’re likely to see increased use of data analytics and machine learning to optimise delivery – potentially using external data feeds to augment Business Intelligence (BI) data within the multi-carrier shipping systems retailers use to track and provide analytics on the delivery performance of their parcel carriers. For example, BI platforms could measure available road traffic data against in-transit carrier deliveries and use historical benchmarking of traffic data to alert retailers and enable them to proactively notify customers of potential delays.
Another fascinating potential application is anomaly detection through social media activity tracking. For example, a spike in unusual activity on a social platform in a particular location could signal a disruption is affecting carrier networks or delivery processes. The actual incident might be a major accident, an unplanned protest march, or even a riot and algorithms can often recognise these spikes before carriers are aware or traditional news media reports them. Marking these incidents as impactful or not, helps machines learn about their impact over time. Which carriers were most affected and how, for example?
- It’s going to be a carriers’ market
With increased demand for ecommerce deliveries, parcel shippers learned even the biggest carriers including the likes of FedEx, UPS, and DHL, can reach capacity thresholds and turn away business. These capacity issues are not only set to persist but will also be compounded by continued driver shortages. This scenario means most organisations would be wise to stick with their existing carrier partners and protect the agreements they have in place, at least in the short to medium term. Those ecommerce shippers with lower volumes will likely be hardest hit, as carriers are prioritising their bigger customers. But unfortunately, 2022 will not be the year to go out to tender for carriers. Those already attempting to switch or negotiate with their existing carriers are quickly learning they’re playing hard ball – even finding they’re being offered less attractive rates and terms than those currently in place.
- Get ready for more international parcel shipping
The boom in cross-border ecommerce triggered by the pandemic is set to continue – creating ongoing demand for international parcel shipping services. Leading ecommerce platform Shopify certainly agrees – it recently launched new features to help merchants tackle the barriers to opening international storefronts, including taking care of currency conversion, localisation and regional SEO.
In fact, 57% of online shoppers purchased cross-border during the pandemic, with clothing and footwear the most popular categories for future purchases according to a Logistyx Technologies survey across the UK, US, Germany and Australia. The research also suggests retailers will need to improve their parcel shipping and fulfilment performance, as many online shoppers have a poor view of the delivery experience when ordering from abroad. 66% of those questioned believe international purchases will arrive later than promised; 47% that they are more likely to be damaged in transit; and 73% expect they will be more difficult to return.
- Retailers will collaborate, merge, and acquire to eclipse Amazon’s shipping capabilities
Most retailers do not currently have the resources to compete with the shipping and delivery capabilities of Amazon. So, we’re predicting more alliances and collaborations in the retail sector as companies try to challenge Amazon.
In the US, for example, Walmart is building a delivery-as-a-service business, shipping online orders for other retailers such as Home Depot. In a similar vein, the merged grocery conglomerate, Ahold Delhaize, is going through a supply chain transformation, including a number of acquisitions to help it transition to a self-distribution model. The aim is to improve cost control, increase distribution speeds and satisfy ecommerce demand. Experts suggest it’s a reaction to Amazon’s push into the online grocery market.
The events of the last two years have had a hugely disruptive impact on many aspects of ecommerce shipping and supply chains. And these trends are just a small sample of the ways the sector is reacting by embracing transformation.
Ken Fleming, president of Logistyx Technologies