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Online shopping drives change outside of portals as well

Omnichannels will require delivery and logistics to undergo a radical makeover

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According to Frost & Sullivan, e-commerce in the UAE alone is estimated to be worth $10 billion (Dh36.73 billion) in 2018 as consumer habits change.
Gulf News

With Ramadan comes a rush of retail activity as households stock up on seasonal food items and gifts, as well as enjoy the extended shopping hours and offers But the times and shopping itself are changing. During Ramadan, there is a spike in online shopping activity.

According to Frost & Sullivan, e-commerce in the UAE alone is estimated to be worth $10 billion (Dh36.73 billion) in 2018 as consumer habits change.

The always-connected consumer has higher expectations than ever before. These include the latest in buying and shipping options, faster delivery and a seamless web experience. The same digital transformations that continue to fuel this on-demand economy are now challenging manufacturers, retailers and logistics firms to navigate a new fulfilment landscape.

With e-commerce expected to generate $4.48 trillion in retail sales by 2021, investing in new technologies and implementing digital, automated processes is no longer enough to keep pace. That’s why retailers are redefining their roles, exploring new business strategies and increasing collaboration as they transition to a more robust omnichannel platform.

Retailers are focusing on the new “ship from store” strategy, leveraging their store locations to double as online fulfilment centres for shipments and for returns.

Zebra’s ‘Future of Fulfillment Vision Study’ analysed how manufacturers, transportation and logistics (T&L) firms, and retailers are preparing to meet the growing needs of the on-demand economy. It found 76 per cent of retailers currently use store inventory to fill online orders.

And six out of 10 expect that number to continue to grow, and it’s anticipated that 96 per cent of retailers will have dedicated fulfilment centres for online orders by 2028.

With rising customer expectations for same-day and even two-hour delivery, fulfilling digital orders from brick-and-mortar store locations is one strategy key players are beginning to use.

It will soon become a requirement to succeed.

While both speed and accuracy are essential to develop a successful omnichannel, only 39 per cent of the survey’s respondents across manufacturing, retail and T&L believe they’re currently operating at the level necessary to meet today’s expectations.

How can these key players speed up the process to achieving improved visibility and accuracy while surpassing consumer expectations? The answer is simple: collaboration.

A growing number of retailers currently rely on drop-shipping, in which manufacturers themselves are responsible for delivering products directly to the consumers, bypassing the retailer’s inventory altogether. Expanding beyond these capabilities, retailers have also started to leverage strategies, including curb-side and warehouse pickup as well as third-party locations like parcel shops and lockers. As for logistics companies, 78 per cent of those surveyed expect to provide same-day delivery by 2023, and 40 per cent anticipate delivery within a two-hour window by 2028.

Through the collaboration of these key players to meet consumer delivery expectations, the future of fulfilment will also be characterised by new shipping options. New technologies such as autonomous ground vehicles, drones and droids will see significant growth between now and 2028, according to our study.

The new landscape will also give rise to unconventional shipping methods such as bicycle couriers and crowdsourced delivery, a method in which a network of drivers can choose to complete a specific delivery order.

What’s next for adopting the new fulfilment model? As this model continues to evolve, it will be essential for industry leaders to come together and empower their frontline employees to drive their performance edge, ultimately improving the customer experience.

This means embracing the digital transformation permeating the supply chain, proactively adopting new solutions to support the next generation omnichannel strategy, empowering employees and fostering collaboration amongst all key players.

Hozefa Saylawala is sales director for the Middle East at Zebra Technologies.

 

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