A changing global e-commerce market is forcing retailers to re-examine how they engage with consumers, according to SmartFreight's managing director, Europe and South Africa, Kerry Holmes.
He said to survive in an increasingly saturated online retail space, smaller companies had to maximise how they meet changing consumer demand or risk failing. Unless they work quickly to embrace the latest technologies to optimise the logistics function, implementing the associated business advantages, it would be hard for any to compete at all.
"Market conditions are changing fast for e-commerce providers and we are starting to see a situation where every tiny difference in business model can become a critical factor in their survival. We have certainly found that customer engagement is critical. It's always been important but it has taken on a whole new level in 2019 and it has now reached a point where those companies who fail to do so may simply not survive. The shipper needs to continually talk to the consumer and provide total visibility. It's paramount," he said.
Speaking at a panel debate on 28 March in Central London, hosted in conjunction with the Australia-UK Chamber of Commerce, he said start-ups and smaller online retailers in particular, were facing some tough choices to remain competitive in a maturing market.
Left to right: Bobby Shome, VP EMEA of Microlistics; Kerry Holmes, MD Europe and South Africa; Abbey Baker, Co-Founder and Director of The Edible Blooms Group; Elizabeth Ames, Executive Director, Australia-United Kingdom Chamber of Commerce.
Joining Kerry at the ‘Shipping the Economy: e-commerce and freight' event was: Tim Robinson, CEO of Doddle; Bobby Shome, Vice President EMEA of Microlistics and Abbey Baker, Co-Founder and Director of The Edible Blooms Group. They each shared their insight and first-hand experiences on how e-commerce was changing and how distribution companies were facing unprecedented pressure to ensure they had the right infrastructure in place to fulfil a seamless consumer experience.
During the discussion, attendees heard how the scale of the e-commerce challenge was reaching a tipping point for many shippers. The cost pressures on many distribution companies were reaching a critical point and the warning signs were already showing for those not fully optimised for their specific markets.
It was discussed how online retail in the UK hit 1.5bn shipped parcels in 2018, a 50% growth since 2014. 96% of those goods were delivered to 27.5 million unique addresses. With a move towards delivering items to a specific person at a specific location, as opposed to a residential address, the number of possible delivery destinations was becoming limitless. News headlines tended to focus on struggling high street retailers but little has been covered by those pure e-commerce retailers who are struggling to scale their business quickly.
Last year, both John Lewis and Next sold more goods online than they did in-store, dramatically altering their traditional face-to-face customer approach. This was described as a defining moment for the sector and a big shift towards parcel carriers becoming brand ambassadors for retailers. However, growing concerns over air pollution (and the subsequent move in London toward adopting an Ultra-Low Emission Zone) with growth expectations for e-commerce in double-digits concerns are rising for a ceiling on volumes.
Kerry went on to say: "One of the mandates we have always tried to adopt with our customers is one of choice. It's about giving the shipper and therefore the consumer a multitude of options. The reality of the supply chain technology landscape is that there is not one platform that can be a fit for all businesses. As businesses diversify the need for optimised supply chains, and technology that can facilitate that, becomes paramount. At SmartFreight our challenge is one of connectivity across a multitude of platforms and ERP, WMS and CRM systems.