The Increasing Importance of Logistics for Multichannel Retailing

Over the years, logistics has been a part of back office functions and hardly considered a driving force for revenue generation. However, things have changed drastically, especially after the e-commerce industry came up where the efficiency of logistics is a key differentiator between a market leader and a pursuer.

Logistics as a stand-alone industry has already gone through various tough challenges such as economic volatility, credit crunch, infrastructural limitations, changing consumer preference, spiking fuel cost, stringent regulations, and of course dwindling revenues. Later, when the retail industry took the centre stage with a lot of hype and more hope, they brought along a silver lining for the logistics sector. However, the challenges we just talked about still remain, and in fact have affected the bottom line of the retail businesses.

The changing consumer preferences and intense competition in the retail industry have surely posed serious challenges, though at the same time they have opened up new avenues. In order to turn those challenges into lucrative opportunities, the logistics industry needed a revamp, particularly for Indian eTailers that are trying to catch up big players like Amazon. It is only possible by sprucing up an overhaul of the “last mile” delivery process.

The main purpose of this post is to touch base on the role of logistics in the overall retail strategy, profitability, and market expansion.

Key Logistics Goals

Marketing these days revolves around three channels — retail, catalogue and Internet, which intensify logistical complexity. Consumers, who walk into physical stores, want in-stock product on the spot, while catalogue and online shoppers expect their orders to be shipped next day along with tracking their order status in real-time. Keeping up with such demand needs a streamlined supply chain and an overall seamless operation, starting from the warehouse, courier hub, to last mile delivery.

From retailers’ point of view, the key logistics goals are below:

• Higher efficiency
• Improved customer service
• Reduced shipping cost

The ongoing challenge for retailers is to blend back-end operations and logistics without any overlap and provide consistent customer experience regardless of the channels. For this purpose, online retailers need to tie up with logistics vendors to optimize the flow of goods, reduce overhead cost, and break free from the breakeven when it comes to revenue.

It is no more a secret that the success of retailers in terms of growth rate, profitability, and sustainability, depend on the logistics to a large extent. That’s why for high-performance supply capabilities, e-commerce companies are seeking unique avenues like X2C models containing parcel lockers, drones, and bike delivery. It is because, besides adding up costs and increasing lead times, traditional logistics limits the possibility of expanding into new markets.

All Roads Lead to Creating Customer Experience

Customer experience is the focus area of every aspect of retail marketing including advertising, packaging, product/service features, usability, reliability, and quality of customer care. But what is the differentiator that can truly shape up customer experience? So, things eventually boil down to a foolproof logistics blueprint that will work every time. Logistics now go beyond the traditional and operational view and become a driving factor for cost rationalisation in the long run.

A myriad of roles that logistics play these days are in the following areas:

• Moving inbound merchandise from offshore/domestic vendors to warehouse
• Deliver outbound packages through zone skipping or vendor drop-shipping
• Replenishing stores for both warehouse operations and vendors
• Reverse logistics to return package for single to multiple customers
• Actualizing transfers such as warehouse-to-warehouse, store-to-store and store to customers

Despite the fact logistics either has an inbound or outbound focus, this part of the complex supply chain can be simplified with the help of innovative and technologically advanced logistics service providers.

Rolling Towards the Future

In this intensely competitive and volatile market, there is hardly any room for inefficient logistics service, and retailers realize it all too well. If products are not delivered on time and customer’s expectations are not met, even the most promising retailer can drop off the radar. Run-of-the-mill and careless delivery will drive away customers and increase the overall operational cost.

Businesses that are struggling due to their logistics can get back into the fray by opting for logistics consulting services. There are evolving concepts of third-party (3PL) or fourth-party (4PL) logistics to find the right supply chain solution.

A new-generation logistics firm can streamline your chaotic “last mile” delivery, and ensure impressively quick product delivery as well as return, low cost, and customer delight. If you are curious to know how, just dial +91-8882-760-760 or send an email to info@smartbox.in; and we would take things forward from there.
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