Over the last decade, e-commerce has grown exponentially throughout the world. Between 2014 and 2020, the overall growth rate of e-commerce was 220%. The pandemic further fueled this growth as lockdowns and quarantines left consumers with little choice but to shop online. As a result of these developments, businesses had to adapt rapidly. Initial approaches involved multichannel distribution to accommodate e-commerce demands, and this has since given way to omnichannel strategies to better meet customer needs. But while this approach is certainly favored in today’s markets, it poses challenges to e-commerce logistics. This is why businesses that want to succeed must appreciate how best to approach logistics within this climate.
Multichannel Versus Omnichannel Strategy
In order to understand how to effectively approach e-commerce logistics, businesses must distinguish multichannel from omnichannel strategies. Multichannel approaches offer customers multiple ways to access a product. This may involve in-store, online, or other options with the same product being available from different sites. In this regard, multichannel strategies are product-focused in nature. The different distribution channels for each offering run parallel to one another. But they are not truly integrated in their approach.
In contrast, an omnichannel strategy is not product-focused but instead customer-centric. In essence, it too provides products through a variety of distribution channels. However, each channel is well integrated with the others, allowing the consumer to have a seamless experience across domains. Customers receive similar communications and messages regardless of the channel they select. And customers’ preferences and behaviors are shared among channels to enhance their overall shopping encounters. This is the desired approach today in dealing with e-commerce logistics.
Challenges and Approaches to Omnichannel E-commerce
Given the integrated and complex nature of an omnichannel strategy, e-commerce logistics requires invested attention. Whether speaking about order fulfillment or distribution activities, a dedicated effort is needed ensure the customer’s experience is optimal. Sophisticated solutions should therefore be used to add value and ensure customer satisfaction. In order to achieve this, however, standard cookie-cutter approaches are not available. Instead, businesses must perform in-depth analyses of their own customers and services. And they must look to leverage their expertise and competitive advantages to promote the best offerings and encounters. From an e-commerce perspective, this is easier said than done.
In considering an e-commerce logistics strategy, some key best practices have been noted. Companies must be extremely flexible in terms of their fulfillment, distribution, and delivery services. They must also demonstrate a high degree of connectivity among different channels while maximizing efficiency. Order processing should be available whether goods are shipped directly via a warehouse or from within a store. And consumers should have extreme versatility in delivery modes that they may want. Naturally, this requires investment in a strong IT network as well as detailed system workflows that complement one another. This is where a qualified third-party logistics (3PL) provider such as Fratogo can greatly help.
An Omnichannel Strategy and 3PL Providers
In a business’s pursuit of effective e-commerce logistics within an omnichannel strategy, 3PL providers are a worthwhile consideration. As companies become progressively pressured to reduce fulfillment and delivery times and lower shipping costs, 3PL providers offer effective solutions. Specifically, 3PL providers can efficiently coordinate various distribution channels. They can also streamline activities within supply chain management systems. And quality 3PL providers like Fratogo do so while improving efficiency and cost-effectiveness. Ultimately, this is what drives high-level customer satisfaction and, in turn, company success.
Projections currently suggest that the e-commerce sector will exceed $6.4 trillion in 2024. Therefore, it’s clear that companies need to invest in quality e-commerce logistics as well as an omnichannel strategy. Foundations for these may be established within company workflows and processes. But to truly excel and remain competitive, businesses should consider 3PL partners to facilitate the desired results. Without question, omnichannel activities that are well integrated represent the future of e-commerce logistics. And given their complexity, businesses should recruit all the expertise they can in order to excel.