Two speed world

The insight comes in MetaPack’s new white paper Unboxing Europe’s Future Delivery Landscape, which you can download from the carrier management platform provider’s website. The paper reviews the trends and market developments that will shape the eCommerce value chain of 2020.

Here we collect a handful of those insights.

1

Forrester predicts that online sales will account for 17% of all US retail sales by 2022, up from a projected 13% in 2017. And where the US leads, the rest of the world follows. According to the Ecommerce Foundation, online retail is growing exponentially – by over 19% in Europe, and 17% globally in 2017. China and the US represent 69% of all global eCommerce. Cross-border shipment volumes are expected to account for 15% of all eCommerce deliveries, making seamless interface management increasingly vital. 

2

Amazon accounted for 53% of online sales growth in the US last year, according to Slice Intelligence. 

In the race for global domination, Amazon (CEO and founder Jeff Bezos pictured) and Alibaba are constantly exploring revolutionary new retail concepts and entering new markets. For retail companies and carriers, the competition to create value just keeps getting tougher.

Amazon is no longer just a retailer. In the US, Amazon ships more than one billion parcels a year and is rapidly building more capacity to ensure its Amazon Prime orders arrive on time. Here in the UK, it has taken Amazon Logistics just four years to grab a 7% share of the UK delivery market by parcel numbers – the question now is whether it plans

to open up its logistics business to carry parcels for competing retailers.

3

The number of manufacturers selling directly to consumers grew 71% in 2016. Already under attack by Amazon, retailers must now also worry about their wholesalers selling direct via the Internet.

4

MetaPack’s 2017 consumer research reveals 54% of shoppers now want a one-hour delivery in metropolitan areas and 15% want the freedom to reschedule deliveries. Forward thinking retailers will concentrate their efforts on creating a path to shop that integrates in-store technology, mobile, cloud, analytics and social media to boost customer engagement.

5

It’s a two-speed world. The polarisation of retail is accelerating. Consumer-centric relationships will require a like-minded supply chain and operating model. Some shoppers will pay more for specific products, faster delivery, sustainable attributes, or higher product quality. Others will trade down to lower cost products with none of those features. Retailers will need to understand where they sit on that continuum. Delivery price, quality and convenience will continue to drive consumer shopping behaviours – regardless of which channel they use to make a purchase. But personalisation is rising quickly up the agenda; 15% expect providers to re-schedule deliveries and 29% expect delivery to wherever they are.

6

Collaborate or die. Under pressure to sustain long-term growth and profitability, get ready for more joint ventures and greater collaboration to enable real-time fulfilment that maximises consumer expectations.

7

eCommerce, logistics and supply chain management will be critical to enabling rapid order fulfilment and returns. E-fulfilment networks will need to be optimised to support a variety of touchpoints – collection points, Click & Collect, home – using AI to predict shopper demand and enable automated delivery.

8

As freight volumes grow, companies like Amazon and Google and crowdsourcing platforms like Uber and Deliv are aggressively trying to establish marketplace models to reduce the cost of same-day delivery.

9

Metropolitan leaders like London’s Mayor Sadiq Khan are looking to reduce freight traffic in a bid to lower congestion and carbon emissions in cities – introducing ‘micro-distribution’ centres and demanding shipment consolidation.

10

Consumers love loyalty programmes. The success of Prime is paving the way for other retailers looking to offer differentiated perks that include free or same day shipping, discounts on purchases and other incentives that ensure consumers turn to them first to meet their shopping needs. And consumers love loyalty programmes. Our 2017 consumer research found that over a quarter (27%) of shoppers belong to at least one programme, with a further 22% subscribing to two or more schemes. More than half (55%) would prioritise one e-tailer over another if it offered a delivery loyalty programme, with 31% viewing it a benefit to pay a monthly fee and get unlimited next-day deliveries.

11

Scale matters – volumes will consolidate in the ‘big five’ – Amazon Logistics, Cainiao, DHL, Fedex, and UPS.

12

Expect an explosion of well-funded last-mile services from niche players – but most won’t make it.