2020 saw many e-tailers forced to rethink their logistics needs. With the Coronavirus pandemic affecting international shipping services around the world, merchants have had to find ways to store their stock in-country where their customers live, and then fulfil orders from there. On the plus side, this has allowed retailers to get orders out to customers quicker and in more cost-effective ways, without having to worry about pandemic-related delays.
Furthermore, pandemic restrictions have meant many bricks-and-mortar stores have had to close their doors, creating a rising demand for global returns solutions. But, again, by working with platforms that integrate storage, fulfilment and shipping, savvy retailers have been able to expand to new markets in days rather than months.
Retailers are also increasingly mindful of their impact on the environment, working with fulfilment providers to find eco-friendly solutions for their shipping needs.
Here are four ways that forward-thinking e-tailers are continuing to fulfil their ambitions in spite of the restrictions and changes in consumer purchasing wrought by this most craziest of years.
In-country storage and fulfilment
Fulfilment networks are notoriously difficult and expensive to build. By partnering with global logistics platforms that provide storage, fulfilment and shipping in-country, brands are able to leverage global networks quickly and with low upfront costs.
Growing demand for 3PLs (third party logistics providers) is being driven by pandemic pain points like rising supply disruptions, increased air freight prices, transportation delays, and capacity issues. Sending goods cross-border via air freight has become prohibitively expensive, at times doubling in price. According to this report, 58% of shippers indicate they are increasing their use of outsourced logistics services this year.
By partnering with global platforms offering services available in countries across the world, retailers are able to flexibly place their goods closer to their customers. They can ship their inventory to local warehouses and take advantage of cheaper local mail and courier services whilst avoiding extra costs, delays, and further pandemic uncertainty.
Traditionally, e-tailers gained success in their local market first and then slowly expanded. Expansion necessarily involved interviewing many 3PLs and shipping providers, testing different software, and going through several rounds of quoting. Once a retailer had chosen a provider, they then often had to deal with integration fees and multiple customer service providers leading to a fragmented and expensive service for them and their customers.
By working with integrated platforms, retailers can now streamline their services as well as adapt to a new market demand quickly. Consolidated platforms can help not just through unifying customer services, but also by providing integrated courier solutions, and enabling retailers to manage customs clearances and achieve better delivery times and prices.
Global returns, from anywhere
According to Allied Market Research, the 2017 global reverse logistics market (customer returns) was pegged at $415 billion and is projected to reach $604 billion by 2025. This growth is fuelled by the rise of online shopping and accelerated by the pandemic. Local lockdowns have meant in-person shopping has had to stop, with the all important act of trying on clothes now taking place inside peoples’ homes.
Customers are therefore looking for returns solutions that are easy, quick, and affordable. Narvar’s consumer report shows that 57% of shoppers exchanged the last item they returned, and more than two-thirds of shoppers say they’re deterred by having to pay for return shipping.
Retailers have the flexibility to create their own returns strategy by partnering with global logistics providers that support worldwide returns . Retailers can decide if they want their customers to arrange shipping back to a local 3PL, cutting out international shipping rates and ensuring refunds are given to customers faster.
Alternatively, retailers can provide pre-made returns labels on their orders so their customers have the flexibility of dropping off returns at local post offices or nominated locations. Retailers can then absorb this reduced cost, even ensuring free returns in many cases. And returns can be fully tracked, giving retailers and their customers full oversight and control of their orders at every step of the way.
The rise of full loop logistics
More e-tailers than ever are concerned about the environmental impact and reputational implications of using single-use packaging to ship their products.. This is being caused by increased consumer demand for eco-conscious offerings as well as regulatory changes on a global scale. Data from McKinsey (shown below) shows the different measures that some nations are taking to minimize packaging waste. Almost all of the top 100 fast-moving consumer goods companies have made bold declarations and commitments to drive sustainability over the coming years.
Innovations in packaging solutions mean there are now many sustainable packaging options available to retailers. With schemes like Cradle-to-Cradle certification, retailers can focus on how to make their products and packaging safer, more sustainable, and ready for an emerging circular economy.
An example of this in action is an Australian coffee company. Based on customer feedback, they recently switched to a full-loop logistics solution. Here’s how it works: Their customers receive coffee pods in fully biodegradable packaging. This even includes the outer label and the tape that is used to seal the box. Within this packaging is a returns satchel that is also biodegradable. Used coffee pods are placed in the returns satchel and sent back to a local 3PL instead of being sent back to Australia, thereby reducing the product’s carbon footprint. The satchel then gets put in a biodegradable bin and is broken down, eventually to be used again to manufacture new pods.
Here is a diagram of how this process works:
More and more retailers are harnessing in-country fulfilment, integrated platforms, global returns and sustainable shipping solutions to move their business forward.
Borderless 360 has been a leader in its agile adoption of shipping trends. We can offer in country fulfillment, integrated platforms, global returns and sustainable shipping solutions for your e-commerce business that are quick to set up, easy to use, and come with a satisfaction guarantee.