Do logistics put the brakes on?
The future of online trade and its logistics has been analysed in detail by Accenture and Geodis. They interviewed 200 European and US brand name suppliers.
The French logistics service corporation Geodis, and Accenture Interactive, which is a subsidiary of Accenture, published a white paper recently on the subject of e-commerce. The study revealed that many shippers and brands reported that e-commerce is expected to account for almost half of their sales in 2020 – and that this trend is set to grow further in future. The least surprising fact that the paper confirmed is that the ongoing pandemic as well as the concomitant mass quarantine regimes gave online sales everywhere something of a boost.
Turning the crisis into an opportunity
Before the current economic downturn started, companies generated around 34% of their sales online, that is to say 28% through online platforms and 6% through their own websites. During the quarantine, this figure rose to about 65% of sales made online, with a better distribution between market places (38%) and company websites (27%). The Europeans, whose digital revolution started a little later, were substantially more online-oriented than US Americans. “The rise in Europe is even significantly higher than in the United States,” the study stated.
Customer interest may have gone through the roof, but providers’ possibilities haven’t done the same. The analysis shows that more than half of all the firms (52%) are of the opinion that their e-commerce potential is restricted by their logistics services. Thus 59% of all European enterprises bank on market places for their online sales, for example, a figure that is far higher than with their US counterparts (46%).
Demand alone won’t do the trick
All this is now due to change. Naturally enough, most of the brands surveyed believe that selling goods through their own e-commerce channels is more promising. Almost two thirds of all brand suppliers (64%) said that one of their top two priorities for the coming six months is to reduce their dependence on market places. 77% of US American firms surveyed and 56% of the European ones said that they want to sell directly to consumers through their own websites within three years, and generate 20% of their total sales directly. The key issue therein is this – the level of logistics services will answer the question of who will come out on top over the coming years in the competition between direct providers and market places.
Geodis president and CEO for Northern, Central and Eastern Europe, Thomas Kraus confirmed that “customers consider both the purchase experience as well as the delivery solution to be decisive. Brand suppliers are keen to improve their e-fulfilment services, provide flexible delivery options, offer better visibility along the entire supply chain and also present simple returns solutions.”
Reality leaves plenty of room for improvement. Currently, 25% of European and 38% of US brand suppliers offer pan-national delivery in two to three days. 17% of US brand suppliers want to be able to offer the same for intercontinental shipping within the next three years. The field has been prepared for logisticians.
77% of all US brand suppliers expect to be able to sell more than 20% of their goods through online trade directly through their own platforms in the coming three years.
56% of European companies expect the same. Dependence on online market places such as Amazon or Alibaba will thus be reduced. Many a logistics issue remains unresolved, however.