E-Commerce and Holiday Logistics
The holiday season is right around the corner - well, at least it's coming up fast. For shippers and freight pros, holiday logistics have already been on the brain for some time. We've discussed some general freight guidelines relating to Christmas and holiday retail already, but as Christmas in July gives way to August, we'd be remiss if we didn't spotlight the type of holiday shopping growing the fastest - e-commerce - and the logistics of the online shopping game. E-commerce brings with it some different shipping terminology and its own unique challenges, which we’ll take some time to discuss here.
What does blind shipment mean?
A blind shipment means a shipment in which the buyer is not aware of the shipper or its origin, with a double blind shipment referring to one in which both the buyer is unaware of its origin and the shipper is unaware of its destination. Blind shipments are common in e-commerce as the online shopping store often does not want the consumer to know where the product comes from and/or the shipper to know where it’s going to prevent both sides from coming together in a direct transaction – thus cutting the retailer out of the process. Some use the term blind shipment interchangeably with drop shipment, but they are different. A drop shipment is when an item is sold by a retailer but not directly kept in stock. So rather than the retailer keeping shelves full of a particular item, when a customer places an order in a dropshipping scenario, it gets shipped via another party like the manufacturer, a wholesaler or even another retailer. The other key difference between a blind shipment and a drop shipment is, there are no secrets, as in, all parties know where the product originates and where it is delivered in dropshipping.
What is omnichannel?
When it comes to retail, omnichannel is a scenario in which a consumer can go to one place to buy/return a product in any number of ways. For instance, a retailer implementing an omnichannel strategy allows a consumer to
Buy online, then pick-up at the brick and mortar store
Buy online, then have it delivered to the home or another location
Purchase in store, with the delivery either to the home or another location
Drop ship from a warehouse or manufacturing center to store, home or other location
Buy online, then return at store or online
Buy online, then return online
Omnichannel has been a growing push in recent years, as consumers come to expect these options and the convenience they offer. Without omnichannel implemented, retailers can be left behind for more appealing options and miss out on potential revenue growth, reduction in costs and improvements in logistics on top of the positive customer attitudes it engenders.
What is e-commerce logistics?
E-commerce logistics is simply the logistics behind online retail. Also called e-logistics, this refers to the process used by an e-commerce retailer to make products available, fill orders and get those products into the hands of the end consumer. A complete e-commerce logistics strategy would ensure packing, shipping, last mile delivery and even a return option. In other words, e-logistics for an online retailer should include
- Robust inventory management to integrate inventory with the shopping experience
- Storage and warehousing (or a dropshipping arrangement) to ensure products are in stock and ready to ship when purchased
- Order fulfillment to get the purchased products out the door quickly
- Shipment tracking to provide transparency to both the business and consumer about where the product stands in its shipping journey
These components are all important to get an e-commerce logistics operation up and running, and keep it running smoothly.
What are e-commerce logistics challenges?
Whether for the holiday season or the rest of the year, e-commerce logistics does bring with it some unique challenges, including
- Fast delivery – If you’re an online retailer not named Amazon or Wal-Mart, you still need to try to compete with the speedy delivery times they offer, and doing so requires the right resources – likely involving third-party providers
- Managing shipping costs – Going back to the Amazon example, not only do they offer speed, they offer many free shipping options. Figuring that into the budget so consumers aren’t turned off by shipping fees is another e-commerce logistics challenge.
- Software glitches – It’s important to have reliable software for inventory management, shipment tracking and more. Errors or unreliability in any step of the process will send customers elsewhere.
- In stock issues – Just as with any retailer, if supply chain issues cause delays in products making it to distribution centers or components to be unavailable to manufacturers, e-commerce retailers will feel the pinch. So it’s imperative to plan ahead for demand and focus on keeping key products available.
- Unreliable partnerships – As e-commerce retailers not named Amazon know, reliable partnerships are a must, whether that be with providers of products or with logistics providers. It’s imperative to work with a 3PL (third party logistics) provider your operation can trust to make many of these pieces fall into place.
Whether your e-commerce and holiday logistics operation is working well and just needs a tweak or two, or you need help getting off the ground, let us know, and we'll work with you on solutions. For now, can also visit our Learning Center for more on freight and logistics - and us. Or start with one of the links below:
- Domestic Freight Services: Intermodal, Truckload, LTL
- Outsourced Managed Transportation Service Solutions