Online Retail
It’s undeniable — in the last couple of years, Online Retail has gone worldwide. In 2017, depressed oil prices lowered retail sales for brick-and-mortar stores, while online retailers saw a 27% revenue growth, reaching nearly $2 trillion in sales. With established markets like North America already part of this digital revolution, Asia-Pacific and in particular China also became major players in the Online Retail market more recently. As the middle class across these developing regions expands, and internet penetration grows, increasingly consumers and businesses are looking to global markets to source their need for electronics, fashions, and communications.
Explore more about IOR Service in Hong Kong China
With increased interest comes greater expectations. Empowered customers now demand quick delivery, accuracy, quality, and easy returns from their retail experience. Fulfilling these requirements in the international market places unique technical and logistical challenges on any online retailer. Here are some of the issues they face.
Flexibility
Product Ranges
Global online retailers like Amazon and Alibaba handle a diverse range of products, from small electronics to heavy packages over 50 kg. Their logistics system or third-party provider must handle this variety without consigning goods to the non-conveyable category. This is vital for driving efficiency and reducing costs.
Scalability
Online retailers constantly deal with fluctuating order volumes and a changing mix of products in each shipment. Online retailers must create scalable logistics systems that can quickly adapt to varying capacity needs, with planned processes, system flows, and staffing requirements. A system that only runs efficiently at full capacity will be ineffective during low volumes, so accounting for downtime and overcapacity is essential.
Developing Markets
Asia-Pacific and Africa are becoming key players in e-commerce supply and retail, but sourcing from and shipping to developing nations involves risks.
Read more about E-commerce Fulfillment Costs
Payment Options
Payment options in these markets are often limited; instead of credit and debit cards, customers will pay via cash-on-delivery or mobile money. Integrating multiple local payment options into existing services can be difficult. Payments that are made will be in local currency and systems must account for payment in multiple currencies.
Poor Infrastructure
Many of these countries have poor transport networks. Roads are often poorly constructed or maintained, and major routes are often subject to extreme traffic volumes creating costly bottlenecks and unavoidable delivery delays. Warehouses may also be inadequate for large shipments, with a lack of automated tracking, below-standard storage facilities, and inadequate monitoring and controls.
These issues will often result in inaccurate or botched deliveries, and in worst-case scenarios cause deliveries to fail altogether. For example, if customers are not available to sign for packages or if they have provided incorrect addresses, in some cases retailers may ask customers to pick up packages from a central shipping hub to reduce these failures, however, this does adversely affect the customer experience.
Recent Comments