How the logistics industry is responding to the challenging consumer demands

From as far back as 1884, when Michael Marks and Thomas Spencer opened their first Marks and Spencer store in Leeds, the high street shop has played a prominent role in consumer buying habits. Whilst that is unlikely to ever go away completely, it goes without saying that the growth of digital commerce has reduced the role of the traditional bricks and mortar high street store. Consumers simply walking to their local shopping centre or independent retailer, and picking their items then paying for them, is not seen as wholly convenient anymore. Sadly this is evidenced by the succession of closures of some of the retail world’s biggest names in recent months.

One of the obvious obstacles for the high street retailer is the challenge of offering competitive pricing models while managing overheads. The ONS reported that online sales accounted for 17.4% of all retailing, seasonally adjusted in March 2018, compared with 15.9% in March 2017, which shows a significant increase in the online arena. The popularity of online shopping has meant huge growth for the logistics sector at a time when high-street retailers fight to maintain their competitive edge. Logistics can benefit from this growth and has a big part to play in the shift in consumer spending where it can serve both high street and online equally well it if remains proactive

Personalising the customer experience

Customers want value for what they spend but they will also want a good experience during that process. Like Tesco and others, Ocado – the online supermarket, have a comprehensive supply chain process in place for their deliveries. They recommend that the shopper books their delivery slot before shopping and they have 60 minutes to complete their purchase. The shopper can book the same delivery slot every week if they register for added convenience and Ocado have minimum and maximum delivery charges. The attraction to the shopper here is that the shopping experience is set out clearly beforehand, it’s easy – Ocado even has a mobile shopping app - and to build brand loyalty and consumer engagement, they teamed up with marketing specialist Selligent to target customers with more relevant messaging, creating a unique and personalised shopping experience.
Retailers adopting the ‘total retail’ model, which incorporates, bricks and mortar, online space, and mobile retail operations, have made the role for the logistics practitioners more important than ever and opens the door for personalised marketing, under the umbrella of one core brand. Nike Inc., currently allow shoppers to customise footwear online to which they can add their name, favourite numbers, or a message, and their delivery options range from home or work address deliveries, or Click & Collect pick-up points. This type of scenario has enabled logistics to become a key player in the digital supply chain and in many cases, the delivery person becomes the face of the retailer’s entire business.

Utilising technology

Consumer’s expectations for instant access to products, anywhere at any time, continue to grow fast, so logistics practitioners have to meet the demand for more flexibility and more speed, and lower costs, by utilising the existing technology. Cloud computing makes it possible to get the most from platform solutions like warehouse management systems (WMS) and align them with customer data analytics. The data is already starting to help improve transportation performance and customer delivery service, but getting a firm understanding of the data long-term, will also help those within logistics to accurately forecast. 
Automated solutions are already in force and logistics practitioners will need to continue to update their existing tech just to keep up with the advancements that are sure to come. Although kick-starting in the US, Amazon has already started using drones to deliver their goods, offering shoppers the chance to collect their products from Click & Collect pick up points, while automated cars and lorries are in development too. Yet, the one thing that these automated delivery options have in common is that they are a lot cheaper to run than paying a delivery team a monthly wage.

Collaborative partnerships

We’ve seen collaboration already playing a big part in logistics, DHL is one example, and more partnerships will help the logistics practitioners to flourish, with insights, innovation and market expansion opportunities. However, more accountability needs to be achieved to eradicate misalignments such as inconsistent service levels, and the fragmentation has to be lessened for practitioners to fully utilise the collaborative process and partner with more last mile operators.

Summary

Overall, logistics has a big part to play and utilising technology at hand to manage product and delivery data is a key component in personalising the customer journey. Getting the core retailing right by using integrated systems, extending partnerships, and understanding customer needs in the designated product areas, is key for the logistics industry to fully take advantage of retail’s next evolution, one that serves both the high street and online retail outlets in equal measure.
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