Parcel is here to stay, but players in the market are adjusting to the “New Reality”
Small parcel shipping continues to grow as a large segment of the logistics market as customers’ demands increase. Currently, parcel shipments account for about twelve percent of the total value of shipments in the U.S. Research shows that globally the number of parcel packages could grow to over 100 billion parcels by 2020. That’s a lot of packages!! More companies are getting a grasp of what role parcel will play in their overall supply chain, and are looking for cost efficient and effective solutions to handle their shipping needs. While the parcel is here to stay, a few changes are happening in the market that all the players will have to respond to.
Customers love the idea of free shipping, but we all have to keep in mind that free shipping really isn’t free. E comm retailers are encouraging larger cart sizes because studies show that consumers will add to their cart to get the next level of discount. Stats also show that they will abandon their cart if the shipping costs become too high. With free shipping as a marketing tool though, retailers’ revenues rise and consumers can save money in the long run.
Today, e-commerce supply chains have to be all things to all shoppers, letting them have real-time visibility into the inventory they are considering. Consumers expect typical retail availability as well as online ordering and parcel delivery, and phone or digital purchase with an in-store pickup if they choose. Customer choice is really the key to the new reality. They want to be able to return purchases through any channel, regardless of the channel they used for purchase. The new reality will also require shifting to a fulfillment model that relies on a broader network of distribution centers rather than just the one traditional centralized DC. The goal for all of us in the business is to create and deliver a seamless and easy shopping and delivery experience that encourages the consumer to come back for more.