DHL identifies four key e-commerce supply chain trends
Online retailers need to prepare for a continuation of some of the supply chain issues which arose during the COVID-19 pandemic.
DHL E-commerce Solutions, a division of global logistics company Deutsche Post DHL Group, has identified four overarching trends that impact the e-commerce sector in the U.S. These themes are based on DHL E-commerce Solutions’ U.S. customer feedback and post-COVID-19 lightweight parcel industry developments.
The four market trends identified include:
Multi-carrier approach a must: DHL finds that multi-carrier approach is gaining popularity, but more so after the COVID-19 pandemic. During 2020, a few online merchants found themselves without a logistics partner. Some logistics operators could not take on excess volume due to capacity constraints in their network, and many placed caps on volume and added surcharges.
DHL expects logistics operators’ volume caps and surcharges to remain throughout the year. By taking a multi-carrier approach and establishing a shipping strategy before the second half of the year, DHL says online retailers can better mitigate unexpected interruptions and shifts in market conditions.
Capacity constraints continue: Capacity was a topic of concern for logistics operators in 2020, and DHL recommends it should be a topic on e-tailers’ radars in 2021, as well. Due to the expected continuation of business-to-consumer growth, the capacity crunch of 2020 is anticipated to remain in 2021, and it is unlikely for logistics operators to have extra secured space in the fourth quarter of the year. DHL forecasts that online shippers may take a different approach in the upcoming year by paying a premium to secure peak holiday season capacity.
Cybersecurity and data privacy concerns increase: The COVID-19 pandemic exposed many online merchants’ supply chain vulnerabilities and online security shortcomings. For brick-and-mortar stores with an online presence, the speed to advance or accelerate their digital transformation meant many had to invest in real-time cyber threat intelligence with centralized monitoring and risk analysis.
According to DHL, the most agile and resilient merchants are also employing unconventional tactics to identify their company’s vulnerabilities through bounty programs, which invite white-hat hackers and security researchers to test their systems’ security. In light of increasing data breaches and security threats, DHL says retailers must implement tighter security measures and controls to ensure an optimal safe online shopping experience.
The reinvention of brick-and-mortar: With brick-and-mortar retail stores shut down due to stay-at-home orders at the beginning of the pandemic, many retailers shifted their fulfillment strategies. For some, this meant a permanent shift to a “dark store” model, in which traditional retail stores are converted to local fulfillment centers.
According to DHL, these dark stores provide customers the option for pickup or delivery while reducing the strain on retailers’ main fulfillment hubs. With the advent of buy online and pick up in-store (BOPIS), parcel locker footprint and technology are growing worldwide. For online retailers, parcel lockers get products into consumers’ hands at a reduced cost, conveniently and securely.
“In 2020, by working closely with our customers and expanding our forecasting processes, at DHL E-commerce Solutions, we successfully navigated the pandemic and helped our customers plan better to overcome future hurdles,” said Lee Spratt, CEO, DHL E-commerce Solutions, Americas.