E-commerce strategy critical to success post-COVID finds new report
Capitalising on e-commerce growth will be critical for many companies after the pandemic according to an industry survey, but many are struggling to understand underlying demand patterns
E-commerce is booming and companies are asking how they can reconfigure their businesses to cope with the changes in buying patterns and therefore supply chain operations upstream. According to a survey conducted by Reuters Events: Supply Chain of nearly 600 executives in supply chains, just 11% of shippers have decreased their e-commerce operations this year, compared to 47% who have expanded their support for digital shoppers.
“E-commerce has been the biggest story in consumer for the past 15 years,” exclaims Erik Caldwell, Divisional Chief Operations Officer, XPO Logistics - Supply Chain (Americas & Asia Pacific), “and that’s only going to continue. It is especially happening as consumers become more comfortable buying literally anything online, from heavy goods to groceries.”
“E-commerce has increased significantly as many organizations have had to shift sales channels to online,” notes Nabil Malouli, VP, Global E-commerce Lead, DHL Supply Chain. “The rise of e-commerce is one of the major trends and I believe that this pandemic will accelerate the adoption of e-commerce significantly for the years to come in multiple product categories.”
The research, part of Reuters Events: Supply Chain and CalAmp’s new Emerging Out of the Pandemic Supply Chain Report, which is free to download now here, has found that the transition is creating challenges for many however.
When asked what the biggest bottlenecks were in the supply chain, 51% of shippers and 46% of Logistics Service Providers (LSPs) said that the lack of clarity on customer demand is an issue, making it the most significant bottleneck they noted.
It is clear that the sudden shifts of demand from physical stores to online and also between product categories is creating major issues for operators across the supply chain as they try to keep up with these sudden changes of trajectory.
“For a lot of retailers that have been focused on brick and mortar, we’re helping them make the shift to omni-channel and particularly e-commerce. That’s a big priority for us,” explains Caldwell.
The issue is compounded with difficulties in sourcing goods caused by the disruption to various production facilities and transportation methods as a result of COVID-19. Among shippers, 33% noted that breaks in their sourcing from their usual suppliers was also an issue.
Organisations will therefore need to look at changing their methodologies and technology bases in order to cope with the surge in e-commerce demand and direct-to-consumer operations.
“The direct-to-consumer model has fundamentally shaken up siloed supply chains in favour of transparency and interoperability,” says Jeff Newman, Vice President, Supply Chain Visibility Solution Salesa at CalAmp, “and in some cases, an agile architecture can make the difference in maintaining a share of the market.”
Click here to download the complete report for free and get direct insights to 587 supply chain executives’ responses.
Click here to find out why e-commerce is boosting warehouse demand and here to understand how those warehouses are adopting automation to try and handle the load.