Unlike other retail businesses, online stores don’t need to rent properties in expensive locations or to hire salespeople, merchandisers and cleaning staff. Their business operation is incredibly simple. It requires a great product, a nice-looking web presentation, and a perfect supply chain.
Since the supply chain is one of the most essential factors in e-commerce business success, its structure and methods are constantly being reassessed and updated. Every new year brings new supply chain trends that influence the business operations of online stores.
In 2017, the logistics industry will amaze us with automated warehouses, drone delivery, and a revolutionary crowdshipping model. But how will these trends affect the growing eCommerce industry?
Automation will simplify the eCommerce supply chain
Experts often point out that automation will reduce the number of workers in the logistics industry. Before we hit the streets with “They took our jobs!!!” banners, we should think about all the benefits automation will bring to e-commerce logistics.
One of the most important benefits of eCommerce is the fact that people can run their companies from their homes before they’re able to generate high returns. Automation plays on the same card and enables entrepreneurs to run complex shipping operations from rented warehouse, with only one or a few employees in their team.
At the moment, automated warehouse systems and distribution solutions are quite expensive. Their price will, however, decrease in the next few years, due to fast tech development and even small business entrepreneurs, who sell their goods through Shopify and other similar platforms, will be able to afford them.
The Internet of Things and the e-commerce supply chain
The wide use of the IoT will create a major disruption in many industries. Now we know for sure that the wide implementation of IoT technologies in warehousing will improve the e-commerce supply chain. IoT trends will introduce the concept of the Supply Chain Control Tower. These towers will execute S&OP processes, collect data and help warehouse managers organize their work environment and coordinate supply, stacking, sorting and shipping operations. IoT systems will also help eCommerce entrepreneurs improve supply chain resiliency for inbound strategic materials.
No more holiday meltdowns
The increasing popularity of e-commerce has initiated many positive trends in the logistics industry. Holidays are the most challenging time for both eCommerce and logistics professionals. In the previous years, we’ve seen huge delivery system meltdowns, caused by the Black Friday and Cyber Monday shopping crazes. In 2013 for example, more than 2 million packages across the United States were delivered late.
In 2017, shipping companies will continue to improve their networks and orient them more towards smaller eCommerce deliveries. Of course, holiday delivery jams won’t disappear completely in 2017, but the number of undelivered and late packages will decrease significantly.
Big shipping companies like DHL are already investing millions of dollars into crowdshipping models. There are also several highly popular startups that promote this idea. Crowdshipping is an ideal solution for eCommerce companies. This concept is similar to carpooling, but instead of passengers, drivers take packages and shipping orders. It enables commuters and other drivers to earn a second income and helps eCommerce companies decrease the costs of their shipping operation.
Crowdshipping uses the infrastructure and the means of transport that would otherwise go to waste. That’s why it can bring huge returns and completely overshadow traditional e-commerce delivery models. At the moment, crowdshipping is a $375 million industry and it’ll grow significantly in 2017.
This is a very important year for drone delivery. Unfortunately, from 2015 onward, drone delivery has been forbidden in all US states. Both eCommerce entrepreneurs and shipping companies expect that the controversial FAA regulation will be abolished in 2017. They’ve already made a significant exception to this rule when they’ve allowed a program called “Let’s Fly Wisely” deliver medicine to clinics in rural Virginia.
At the moment, the benefits of drone delivery are mainly used by drug dealers. Cartels often smuggle different types of contraband across the US-Mexican border with GPS-guided drones. The abolishment of the FAA rule would create a huge disruption in the shipping industry since it would motivate many tech companies to start their own delivery operations. This fuss will benefit eCommerce businesses because it’ll help them decrease their shipping costs. Amazon is one of the first eCommerce corporate entities to plan the introduction of a drone delivery program, immediately after the FAA lifts its ban.
Successful marketing is driven by happiness. One of the reasons why eCommerce has been so successful in the last few years is that this concept allows customers to have a dash of happiness delivered to their doorstep. In order to keep their customers happy in the future, e-commerce businesses will need to introduce a “free shipping “ model. Entrepreneurs who want to deliver their products without charge will need to optimize their shipping chain with the latest tech and cut all unnecessary costs.