– By Yash Jain
In this new era of internet and smartphones, you can simply order anything and get it delivered to your home in no time. The need to travel long distances in order to visit your preferred store is long behind. Using a smart device, you can actually shop at your favourite store from the comfort of your home and have products delivered straight to your door. This trend highlights the rise of e-commerce businesses driven by changes in consumer buying behaviour. According to KPMG, the Indian e-commerce business will be worth $200 billion by 2026.
The significant rise in e-commerce has directly impacted logistics and supply chain management, necessitating the adoption of new strategies by businesses in order to cater to the demands of contemporary customers. India’s logistics market is predicted to be worth $435.43 billion in 2023 and $650.52 billion by 2028, rising at a CAGR of 8.36 per cent, according to a study by Research and Markets. This data highlights the fact that the logistics market is poised to witness unparalleled growth, driven by growing customer reliance on online retail. Especially with the rising demand for swift, effective deliveries and simple returns, modern businesses are increasingly relying on the logistics sector. This, in turn, has made it necessary for the sector to alter its strategies by adopting new tech-powered approaches.
Rise of e-commerce
Although the Covid-19 pandemic was nothing less than misery for nearly all industries, e-commerce was an exception. In spite of the fact that it had already existed prior to the pandemic, online retail experienced notable growth during that period. Restricted to their homes, people were left with no choice but to rely on online deliveries. According to Census Bureau’s Annual Retail Trade, e-commerce sales grew by $244.2 billion, or 43 per cent, from $571.2 billion in 2019 to $815.4 billion in 2020, the first year of the pandemic.
Following the pandemic, individuals who largely supported in-person buying were now entirely in favour of online ordering, signaling the growth of the e-commerce industry. The pandemic increased the online sales of fast-moving consumer goods, with an estimated 10.7 million households purchasing such items between April 2020 and March 2022, according to Kantar Worldpanel. The rapid growth of e-commerce necessitated a growing emphasis on effective logistics and supply chain management. This, in turn, led the logistics sector to adopt tech-enabled strategies to satisfy customers’ demands for quicker deliveries.
Substantial impact on logistics and supply chain management
Last-mile delivery: Quick and efficient delivery is no longer a luxury but rather has become a requirement in the modern era as more and more consumers turn to e-commerce for all their buying needs. As a result, it has forced logistics companies to employ cutting-edge tools and novel supply chain models to boost package volume and speed up delivery with the aim of pleasing consumers. Here, the concept of last-mile delivery comes into the picture, offering customers efficient and on-time deliveries. In fact, logistics companies are heavily investing in technology with the goal of improving last-mile logistics and optimising deliveries.
Greater transparency: Gone are the days when prolonged deliveries did not bother consumers. Modern-day consumers today, especially the most “proactive” generation- Gen Z seek quick deliveries. On top of on-time deliveries, transparency is something they actively demand. In response, logistics companies have adopted sophisticated real-time delivery tracking systems. Offering greater visibility, these systems allow businesses to monitor the status of the product up until it reaches the end user as well as customers to track their packages.
Adoption of new technologies: The logistics industry has been a keen adopter of cutting-edge technologies when it comes to integrating them into business processes. In an effort to develop the ideal supply chain system, maximize deliveries, and provide customers and businesses with better transparency and easy order monitoring capabilities, logistics organisations have embraced a number of solutions infused with AI, ML, and other technologies. To enhance decision-making, manage routes, and anticipate demands, these companies are extensively leveraging big data analytics and IoT in addition to gathering and processing data from other sources like real-time traffic and weather sensors. By decreasing the need for manual data entry and enhancing the speed, accuracy, and efficiency of logistics, these cutting-edge technical solutions also enable effective administration, storage, and seamless movement of commodities.
E-commerce and logistics: Road ahead
In the fiercely competitive marketplace of today, e-commerce brands need to be active and reactive to rightly meet consumer needs. And for that to happen, having robust logistics support is crucial.
The rising demands and shift in consumer buying behaviour have led e-commerce brands to offer quicker and more efficient deliveries. This, in turn, has resulted in brands primarily relying on the logistics sector to cater to the increased demand. With the aid of cutting-edge technologies, the logistics industry has developed modern methods and approaches to meet the expectations of both enterprises and consumers. Given the evident rise in e-commerce today, it is safe to assume that the sector will further grow in the future, directly influencing the expansion of the logistics industry.
(Yash Jain is the founder and CEO at NimbusPost.)
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