Blog Category: eCommerce

Introduction:

In the rapidly evolving tech industry, maintaining optimal inventory management practices is crucial for sustained growth and competitiveness. This blog delves into industry-leading inventory management best practices.

Distinguishing Inventory Management from Supply Chain Management:

While inventory management and supply chain management are closely related, it’s important to recognize that these terms are not interchangeable. They represent distinct facets of the broader logistics and operations landscape.

Supply Chain Management:

Supply chain management takes on a comprehensive role in overseeing the entire journey of products, from their origin as raw materials or components through the stages of production, sourcing, and ultimately, final distribution to end customers. It encompasses the strategic planning and coordination of activities that drive the flow of goods and information across the entire supply chain network. This includes optimizing processes, managing supplier relationships, and ensuring timely and efficient delivery to meet customer demand.

Inventory Management:

Conversely, inventory management focuses specifically on the products a business holds within its operations. It involves receiving, tracking, and efficiently storing these products. Beyond physical control, inventory management provides essential data and insights that enable informed decision-making in areas such as procurement and stock replenishment. It plays a vital role in maintaining the right quantity of products on hand to meet customer demands while avoiding overstocking or stockouts.

Supply chain management encompasses the entire product journey, while inventory management hones in on the precise control and data-driven aspects of the products a business maintains.

1. Demand Forecasting and Predictive Analytics:

Leveraging advanced demand forecasting and predictive analytics tools empowers large tech companies to anticipate market trends and demand fluctuations accurately. A data-driven approach ensures that inventory levels are optimized, reducing excess stock and minimizing the risk of stock outs.

2. Dynamic ABC Analysis:

Introducing a dynamic ABC analysis strategy that categorizes inventory items based on both value and demand volatility allows large tech companies to align their inventory management strategies with changing market dynamics, resulting in optimized stock levels and efficient resource allocation.

3. JIT Inventory Excellence:

Just-in-Time (JIT) inventory management methodology, backed by robust supplier relationships, helps large tech companies achieve operational excellence. Seamless coordination with suppliers enables on-time deliveries and efficient production processes while minimizing carrying costs.

4. Real-time Inventory Visibility with Advanced Technology:

Cutting-edge inventory management technology provides real-time visibility into inventory levels across multiple locations. These solutions offer large tech companies the tools to monitor stock movement, track trends, and make data-driven decisions, ensuring optimal stock allocation and avoiding disruptions.

5. Collaborative Supplier Partnerships:

Recognizing the significance of supplier collaboration, these strategies foster strong partnerships, allowing large tech companies to achieve faster lead times, accurate order fulfillment, and cost-effective procurement. Together, they ensure a responsive supply chain that adapts to changing demand. Managed services can help continually evolve business functions to keep up with ever-changing targets while hitting key stops along the way.

6. Strategic Safety Stock Management:

Strategic safety stock management methodologies tailored to the tech industry’s dynamic nature involve analyzing demand variability and market trends to assist large tech companies in maintaining optimal safety stock levels, balancing customer satisfaction and cost-efficiency.

7. Technology Integration and Process Automation:

Seamless integration of inventory management technologies enhances accuracy and efficiency. These solutions incorporate automated tracking systems, barcode scanners, and RFID technology to minimize errors, optimize order picking, and streamline warehouse operations.

8. Continuous Improvement and Performance Metrics:

Large tech companies benefit from continuous improvement initiatives driven by performance metrics. Analyzing inventory turnover ratios, stock accuracy, and fill rates ensures that inventory management strategies stay aligned with business goals.

Conclusion:

These expertise-driven practices can benefit your business and elevate your inventory management practices. When customers use ModusLink to manage their inventory, we have robust processes in place to ensure world-class inventory management as part of our VMI service. If you’re in search of logistics support, we’re here to assist you.

Bibliography

https://advisory.kpmg.us/services/kpmg-managed-services.html

OpenAI’S GPT-3

Information was also provided by OpenAI’S GPT-3 language model.

Disclaimer:

Content is the opinion of ModusLink Corporation and is not intended to act as compliance or legal advice.

In the ever-evolving world of freight and logistics, volatility has become the new normal. Procurement experts face transportation costs, customer demands, and high pressure on global container and air freight rates. 

Any logistics provider will be well aware of these issues, but it’s possible to overlook how much things have changed in recent years. 

Consider global container shipping rates. 

Container rates in late July 2023 reached $1323 per TEU, significantly surpassing the late-2019 rates of $1236.87 before the COVID lockdown (Freightos). 

Ocean shipping rates will remain high and unpredictable until the end of 2023, compared to pre-pandemic years, so shippers need to adjust and find new ways to succeed. Supply chain optimization software can help companies navigate challenges, streamline operations, and achieve sustainable success. But what does that mean for future strategies in procurement?

Let’s consider the challenges and define a few strategies to help. Let’s think back on demand forecasting and warehousing management. Let’s rethink everything to figure out what it might be for the future of procurement in light of it all. 

The Challenges of Freight Procurement for Today’s Shippers 

Understanding and addressing the unique challenges of today is the first step in crafting a future-proof procurement strategy. The shifting dynamics between carriers and shippers and frequent disruptions have made it increasingly difficult for shippers to navigate the market.

Ongoing Optimization

Shippers must optimize their procurement strategies. Handling mini-bids, for example, can be challenging for companies operating with limited data and analytics. The lack of real-time market insights can hinder shippers’ ability to make informed decisions and seize opportunities.

Advanced Technologies

The growth of e-commerce has led to increased demand for advanced technologies and functions. However, identifying the right technologies, implementing them, and training staff takes time and effort. Shippers must also contend with the complexities of integrating new technologies into their existing systems.

Quick Responsiveness

Volatility means shippers must recover from disruptions quickly and apply lessons learned faster. Achieving this level of agility in fulfillment and manufacturing requires robust processes, effective communication, and a supportive culture. Shippers must be prepared to pivot their strategies in response to market changes and external factors.

Proactive Risk Mitigation

Companies should prioritize risk management and mitigation, but developing and implementing mitigation strategies can be complex and challenging. Shippers must assess potential risks across their supply chains, from factory to final mile delivery, and implement mitigation measures.

CO2 Emissions Regulations

As McKinsey & Company highlighted, emissions and new regulations will inevitably impact supply chain procurement processes (Kaiser et al.). Shippers must stay informed about regulatory changes, assess their impact, and make necessary adjustments. This requires a proactive approach to compliance and a commitment to sustainability.

How to Approach and Overcome the Procurement Issues 

To navigate the volatile freight and logistics industry successfully, shippers must employ targeted strategies that are proactive, agile, and data-driven. Here are some key strategies, along with more detailed explanations:

Automate Optimization

Shippers can leverage data analytics and market intelligence tools–core functions at ModusLink–to automate the initiation of optimization efforts. Shippers can make more informed decisions and capitalize on emerging opportunities by harnessing real-time market insights. Predictive analytics can also anticipate market trends and proactively adjust procurement strategies. This approach allows shippers to stay ahead of the curve and respond effectively to changing market conditions.

Adopt Advanced Technologies

The adoption of advanced technologies is crucial for supporting e-commerce logistics and fulfillment. Shippers should invest in technologies that enhance supply chain visibility, automation, and efficiency. Integrating technologies related to transportation services and understanding shipping costs can be instrumental in streamlining operations.  

Logistics providers know these issues but may need to realize how much things have changed lately. Choosing a logistics provider that applies and offers advanced technologies can streamline this process too. Of course, there are some risks to consider. 

It’s important to carefully select technologies that comply with the company’s specific needs and implement robust integration strategies. This approach can help shippers improve customer service, gain a competitive edge, and effectively manage inventory management.

Pursue Proactive Risk Mitigation

Shippers must find and deal with possible risks in their supply chains, from the factory to the final delivery. They should assess and reduce threats to minimize the impact of problems. Shippers can ensure they receive good service and value from their logistics partners by making suppliers accountable for meeting goals. This helps strengthen the supply chain, allowing shippers to handle a changing market better.

Visualize Network Optimization

Shippers can use data visualization tools to improve their supply chain performance and reduce costs. They should also evaluate their suppliers to ensure they meet goals and provide good service. This helps build strong relationships and optimize supply chain operations.

Core Benefits of AddressThose 

Addressing shippers’ challenges means retooling communication and execution processes to do more with less (Keelvar). That may include using advanced technologies, proactive risk mitigation strategies, and supply chain optimization software or services. Those impacts will help shippers ensure compliance, foster transparency, react to market changes, and achieve sustainable success.

Create a Better Supply Chain Management Plan With ModusLink

Logistics disruptions are bound to happen, but the right partner can help you change how your organization deals with them. Planning and optimizing your supply chain to handle these disruptions effectively is essential. Procurement should adapt to the market and manage inventory levels, reducing them strategically when necessary. Luckily, partnering with ModusLink can help your organization achieve these goals. Contact a team member today to begin.

Works Cited

Freightos. Freightos Terminal – Global Air and Ocean Market Intelligence, https://app.terminal.freightos.com/fbx. Accessed 16 August 2023.

Kaiser, Felix, et al. “Managing supply chain risks.” McKinsey, 19 May 2022, https://www.mckinsey.com/industries/chemicals/our-insights/procurement-early-warning-systems-and-the-next-disruption. Accessed 1 August 2023.

Keelvar. “Strategies for Sourcing Excellence in a Volatile Supply Chain Market.” Keelvar, https://www.keelvar.com/documents/strategies-for-sourcing-excellence-in-a-volatile-supply-chain-market. Accessed 28 July 2023.

Disclaimer:

Content is the opinion of ModusLink Corporation and is not intended to act as compliance or legal advice.

Global trade is essential today as it allows countries to specialize in producing goods and services that they are most efficient at while enabling them to access a broader range of products worldwide. This leads to higher efficiency, lower costs, improved digitalization and automation, and more significant innovation. Ultimately, this benefits both producers and consumers as supply chain optimization depends on smooth global relationships and trade. Still, the future of omnichannel supply chain optimization is changing to reflect a growing consensus around the importance of tracking data and keeping everything fair. This is on full display with the German Supply Chain Due Diligence Act now in effect, as shared by IBM (German Supply Chain Due Diligence Act (SCDDA) explained). Let’s take a closer look at the implications of the law and how it’ll impact global trade and compliance.

Overview of the German Supply Chain Law

Global supply chains face mounting challenges on multiple fronts, especially with omnichannel 3PL services, network management, and operation. The convergence of geopolitical events, the Covid pandemic, and natural disasters have conspired to disrupt supply chains globally. In addition to these external pressures, companies must contend with an increasing number of legal requirements for supply chain management.

This represents a notable shift in the omnichannel supply chain landscape, with more countries moving away from voluntary measures and self-commitments towards mandatory regulations. Several countries have taken concrete steps in this direction, and this newest piece of legislation’s impacts can only be explained by breaking down the facts of how they’ll impact companies operating in or with Germany.

The German Supply Chain Law entails due diligence obligations relating to human rights and environmental risks and violations. It impacts traditional import and export relationships and e-commerce in the EU. Improving supply chain operations, managing transportation costs and profits, and ensuring safe and ethical operations is the primary goal of this new law. As explained by Global Supply Chain Compliance, these can include the following (Thoms and Fischer).

• Prohibition of known child labor and unsafe employment of minors.
• Prohibition of work of those believed to be trafficked and slaves.
• Prohibition of all forms of oppression within manpower.
• Prohibition of non-compliance with labor protection obligations.
• Prohibition of discrimination in supply chain optimization.
• Prohibition of withholding pay or failure to provide adequate wages.
• Prohibition of efforts to deny the right to form trade unions.
• Prohibition of attempts to block human rights and environmental protections.
• Prohibition of torture, manipulation, and unsafe conditions.
• Prohibition of mercury use, production, raw materials, and waste handling.
• Prohibition of production and use of chemicals under certain restrictions.
• Prohibition of hazardous waste imports and exports in some situations.
• Prohibition of unethical omnichannel supply chain practices.

Global fulfillment, shipping, and transportation companies focused on customer demands and order fulfillment rely on multiple channels to maximize the opportunities global import and export trade allows. E-commerce fulfillment, omnichannel 3PL services, 3PL partnerships, retail and wholesale relations, and supply chain integration are all impacted by the German Supply Chain Ruling.

The German Supply Chain Law obliges companies to observe the human right and environmental due diligence obligations in their supply chain appropriately. The due diligence obligations covered for global trade with German businesses include a range of points that touch on everything from e-commerce challenges, e-commerce fulfillment, omnichannel supply and omnichannel fulfillment, and supply chain management:

• The establishment of an integrated end-to-end risk management process.
• The internal designation of duties and responsibilities with hiring practices.
• The performance of routine and in-depth risk analyses and responses.
• The adoption and enforcement of human rights policies and protections.
• The enforcement of ethical practices focused on forecast demand and budgeting.
• The establishment of preventive measures for direct and indirect suppliers.
• Taking remedial action in the event of a violation of a protected legal position.
• The establishment of complaints procedures for omnichannel supply chains.
• The implementation of due diligence measures regarding risks at indirect suppliers.
• The documentation and reporting of the required paperwork to the authorities.
• The use of ethical practices involving supply chain optimization and monitoring.

Compliance Challenges and Strategies for Importing and Exporting Companies

A central aspect of the legal framework is the requirement for companies to implement measures within their own business operations and in relation to their direct suppliers. In some instances, such as when there are indications of violations, companies may even be obligated to take action concerning their indirect suppliers. This effectively extends the scope of responsibility of companies beyond their primary operations and into their supply chain.  

However, it’s important to note that these obligations are generally framed as duties of effort, meaning that not every infringement of human or environmental rights will automatically be considered a violation of the German Supply Chain Law. Instead, companies must demonstrate that they have taken appropriate measures and done everything reasonably possible to prevent such violations from occurring within their supply chain.

The Outlook For Companies Impacted by the Law

As of January 1, 2023, the German Supply Chain Law took effect and significantly impacted businesses operating in Germany. The law will apply to all companies, regardless of their legal structure, that have a head office, principal place of business, administrative headquarters, or branch office located within Germany. This means many aspects of global trade networks and partnerships will be impacted.

Initially, the law will only be enforced on companies with a minimum of 3,000 employees. However, starting from January 1, 2024, the scope of the law will be expanded to include companies that employ at least 1,000 employees, and based on the business register of the Federal Statistical Office, this criteria will apply to nearly 3,000 companies in Germany. The determination of the number of employees can be challenging, particularly in the case of affiliated group structures. Omnichannel supply chain, e-commerce, and other supply chain logistical challenges will be brought front and center with implementing these new laws and regulations.

Stay in Compliance With the German Supply Chain Act With ModusLink.

Global supply chains face increasing pressure from various sources, including geopolitical events, natural disasters, supply chain optimization challenges, and the COVID-19 pandemic. Additionally, there is a trend towards mandatory regulations rather than voluntary measures and self-commitments. Countries such as the UK, France, and Germany are introducing laws related to supply chain and supply challenges management.

The 2023 effects are already being felt as the first wave of German Supply Chain Laws roll out, and more changes will come when the 2024 laws take effect. Contact ModusLink today to learn more about supply chain compliance, improved supply chain, enhanced inventory management, and better international trade relationships with Germany and other EU countries.

Bibliography

“German Supply Chain Due Diligence Act (SCDDA) explained.” IBM, https://www.ibm.com/blog/german-supply-chain-due-diligence-act-scdda-explained/. Accessed 11 March 2023.

Thoms, Anahita, and Kimberley Fischer. “New German Supply Chain Due Diligence Act: The early bird catches the worm.” Global Supply Chain Compliance, 4 November 2022, https://supplychaincompliance.bakermckenzie.com/2022/11/04/new-german-supply-chain-due-diligence-act-the-early-bird-catches-the-worm/. Accessed 11 March 2023.

Disclaimer:

Content is the opinion of ModusLink Corporation and is not intended to act as compliance or legal advice.

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Environmental, social, and governance (ESG) and its growing importance in supply chain management is a top priority for global fulfillment managers. ESG supply chain management is critical to maximizing the benefits of omnichannel ecommerce and warehousing and distribution services. ESG in supply chains refers to the three key factors companies consider when evaluating their environmental, social, and governance impacts. As supply chains become increasingly global and complex, ESG considerations are gaining importance in supply chain management.

Companies are now expected to manage not only their own ESG supply chain risks and impacts but also those of their suppliers and partners. This requires a focus on transparency, accountability, and sustainability across the supply chain. As reported by the Harvard Business Review, “an organization must view the available options and then adapt in near-real time by collaborating with external partners” (Padgaonkar). Let’s take a closer look at the top five things to know about ESG in global trade for 2023.

The Shipper’s Role in Global Fulfillment and Trade

Shippers are responsible for transporting goods from the point of origin to the end of consumption. As such, they play a critical role in global trade and are a crucial stakeholder in ESG supply chain management. Shippers are expected to comply with emissions, labor practices, and product safety regulations. They are also responsible for selecting carriers and modes of transportation that are environmentally sustainable and socially responsible.

Today’s global trade fulfillment and supply chain management depend on advanced and integrated technologies such as mobile apps, cloud-based platforms, real-time data analysis, on-demand communications, and intelligent predictive analysis. Establishing an innovative and effective marketing strategy boosts communication with all involved parties easier. That includes increased collaboration to handle load and product information, marketing campaign points, or import and export logistics.

ESG management within the modern supply chain makes it easier to stay ahead of the competition and overcome the most common ecommerce challenges. Consider the impact in the value chain. According to Forbes, “businesses need to start tracking emissions, diversity and other ESG data and reporting it, similar to how they annually report financial data. This already represents major challenges for many organizations, even before considering that much of the same data will need to be gathered from suppliers. That’s because emissions that can be traced back to supply chain activities are categorized as “scope 3” emissions and must also be reported. Given that up to two-thirds of a company’s emissions can fall under scope 3, this isn’t a regulation that organizations should delay preparing for” (Three International Regulations That Will Impact US Supply Chains In 2023). Clearly, shippers that need to gain control over their full emissions in the value chain can do so with a better overall network design.

Increased Emphasis on ESG and Integrated Supply Chain Design:

ESG in supply chain considerations is now integrated into supply chain design decisions, including product design, supplier selection, and transportation planning.

This requires reducing carbon emissions, promoting social responsibility, and ensuring good governance throughout the supply chain. Companies are also enhancing their supply chain transparency and traceability, allowing them to manage ESG risks and impacts better.

Best ESG supply chain design practices include setting clear ESG performance goals, developing a comprehensive ESG strategy, engaging with suppliers and partners on ESG issues, and incorporating ESG in supply chain considerations into product and process design.

Growing Importance of Global Fulfillment in ESG Goals

Global fulfillment plays a critical role in supporting sustainable supply chains. Companies are increasingly looking to reduce their carbon footprint and other ESG-related impacts by using more sustainable transportation modes, such as rail and sea, and by consolidating shipments to reduce waste and emissions. They also explore alternative fulfillment models, such as regional distribution centers and direct-to-consumer delivery, to reduce transportation-related emissions, including those occurring in warehousing and distribution.

Companies can use global fulfillment strategies to reduce their carbon footprint and other ESG-related impacts by optimizing transportation routes, selecting carriers with low emissions, and consolidating shipments. They can also use technology to improve visibility and traceability throughout the supply chain, allowing them to manage ESG risks and impacts in global fulfillment effectively.

It also helps improve the customer journey and simplifies tracking of all steps involved in any transaction- whether the goods are moved from a distribution center, a brick-and-mortar store, or from a shop online.

The Rise of Omnichannel Ecommerce Reshapes ESG Supply Chain Management

The growth of omnichannel ecommerce is creating new challenges for ESG supply chain management. Companies must deliver products quickly and efficiently across multiple channels while managing their ESG in supply chain risks and impacts. This requires focusing on sustainability, transparency, and innovation across the supply chain.

Omnichannel and multichannel processes complement the ecommerce trend and make it easier for retailers, wholesalers, and consumers to get what they need when needed. With an innovative and fully integrated omnichannel approach, ecommerce, omnichannel retail, and even wholesale companies implement ESG processes much more efficiently. And funding is projected to be more accessible following additional investment on behalf of governments.
For example, WBCSD noted that, “The US Inflation Reduction Act, which is projected to pour over $400 billion into the US sustainability market over the next decade” (ESG Insights: 10 Things That Should Be Top of Mind in 2023).

Potential solutions for managing ESG risks associated with omnichannel commerce include using data analytics to optimize transportation routes and reduce emissions, using sustainable packaging materials, and exploring alternative fulfillment models. Companies can also engage with their customers and stakeholders on ESG issues, promoting sustainability and social responsibility throughout the supply chain.

Innovation in Warehousing and Distribution for ESG in Supply Chains

New technologies and processes are improving ESG performance in warehousing and distribution. Companies use automation, robotics, and artificial intelligence to reduce waste, improve efficiency, and reduce emissions. They are also exploring new warehouse designs that promote sustainability, such as using renewable energy sources and optimizing natural lighting.

Specific innovations in warehousing and distribution supporting sustainable supply chains include green roofs, energy-efficient lighting systems, a focus on improved omnichannel ecommerce, and renewable energy sources. Companies are also exploring alternative delivery models, such as drone and autonomous vehicles, to reduce emissions and improve efficiency. But regardless of what options exist, companies must take notice and get the right data. As reported by Matt Rickerby of Extensiv, “Inventory analytics are an essential part of any inventory management solution. They give you valuable data about how your inventory is performing, how much it costs, and more. Multi-location inventory management solutions often provide a variety of Key Performance Indicators (KPIs) and reports to help managers make informed decisions about their business operations. (‘How to Improve Your Multi-Location Inventory Management’)”

This use of data will guide companies toward a more sustainable future.

Streamline Omnichannel Fulfillment With ESG in Mind by Partnering With Moduslink.

Mastering ESG services are more accessible with the right global fulfillment partner who can offer warehouse and distribution services that meet your needs. Reward your loyal customers and offer the finest personalized experience and shipping services with ModusLink. Omnichannel marketing and ecommerce integration is the way of the future for supply chain management and operations. Contact ModuLink today to learn more and to see how environmental, social, and governance integration can improve your global trade processes.

Bibliography

“ESG Insights: 10 Things That Should Be Top of Mind in 2023.” World Business Council For Sustainable Development (WBCSD), 16 January 2023, https://www.wbcsd.org/Overview/News-Insights/Member-spotlight/ESG-Insights-10-Things-That-Should-Be-Top-of-Mind-in-2023. Accessed 10 March 2023.

“How to Improve Your Multi-Location Inventory Management.” https://www.extensiv.com/blog/multi-location-inventory-management, https://www.extensiv.com/blog/multi-location-inventory-management. Accessed 10 March 2023.

Padgaonkar, Pranav. “How to Build Supply Chain Resilience Without Sacrificing ESG Goals or Inflating Costs – SPONSOR CONTENT FROM GEP.” Harvard Business Review, 29 March 2023, https://hbr.org/sponsored/2023/03/how-to-build-supply-chain-resilience-without-sacrificing-esg-goals-or-inflating-costs. Accessed 31 March 2023.

“Three International Regulations That Will Impact US Supply Chains In 2023.” Forbes, https://www.forbes.com/sites/forbesbusinesscouncil/2023/03/09/three-international-regulations-that-will-impact-us-supply-chains-in-2023/?sh=2c18b7186b3f. Accessed 10 March 2023.

Disclaimer:

Content is the opinion of ModusLink Corporation and is not intended to act as compliance or legal advice.

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Returns management remains a vital part of today’s supply chain processes. According to data shared by Vue.AI, “more than 60% of online shoppers say that they look at a retailer’s return policy before making a purchase. When an e-commerce site says ‘no returns or refunds,’ it makes a shopper nervous and less likely to trust the retailer (Ravishankar and Rao).” 

It’s not enough to hope customers don’t return products; they will. Today’s supply chain companies need to make money on returns. Unlike the forward view, reverse logistics follow the opposite process. This unique point of origin leads to possible damage to the bottom line and challenges in supply chain management. 

Further, depending on the product, it may be necessary to recycle, restock, reuse, or retire (properly dispose of) each returned item. That’s a tall order to meet. Understanding such processes begins with understanding the facts of the reverse logistics meaning and process, its common mistakes, and a few best practices for maximizing their value. 

Reverse Logistics and Returns Management Are an Opportunity for Profit. 

Returns management and reverse logistics have become crucial components of any company’s business strategy. Of all the supply chain trends, finding ways to enable true optimization remains elusive. In that realm, better returns management is still far from a reality for many e-commerce companies. With returns accounting for 30%, reselling returned products on secondary or export markets can help offset losses and expand market share.

Even more importantly, returns rates have hit their highest in the 2022 holiday shopping season. According to industry data experts, “Salesforce reported a 63% spike in returns during November and December, year over year (Ravishankar and Rao).”

Not only does this mean lost profit is recouped through returns generated from the secondary markets, but it also means an enlarged pool of potential customers in places that may not otherwise have been accessible. Embracing returns as part of a company’s plans can increase revenue while growing market share and securing a more secure end-to-end supply chain process.

Common Mistakes in Returns Management.

Companies make a few common mistakes when handling returns processes and identifying strategies for a more successful reverse logistics operation. These issues include:

• Not having a dedicated logistics team causes delays and inefficiencies in processing returns. It also creates an additional workload for other team members, leading to increased customer dissatisfaction.
• The lack of trackable return shipping options leads to difficulty tracking returns and can also make it difficult for the company to keep track of returns. This causes frustration and potential lost or misplaced returns for customers.
• A proper reverse logistics process must be clarified for handling returns and creating other missteps in downstream processes, including restocking. 
• Failing to create a system for identifying and documenting defective products makes it difficult to track the source of defects and also makes it difficult to identify patterns or trends in defects.
• Having a plan for dealing with overstock or excess inventory from returns results in unnecessary costs for the company and makes it challenging to manage inventory levels.

Best Practices for Returns Management.

Following best practices for returns management is essential for businesses to create a streamlined, cost-efficient operation. However, the strategy behind reverse logistics isn’t always about managing inbound flows. Instead, it should consider recycling goods, reclamation of raw materials, and reuse cases, especially for e-commerce goods. Still, a few additional best practices transcend these “r’s” of reverse logistics and return management. These best practices include:

1. Dedicate a logistics team to manage returns. A dedicated team ensures all returns are handled quickly and efficiently, including packaging or other kitting processes to ready items for resell. 
2. Provide customers with a trackable return shipping option. Providing real-time information on the status of their product’s journey reduces complaints. 
3. Develop and implement an effective reverse logistics process. Tracking data minimizes the cost and environmental impact of returns processes.
4. Create a system for identifying and documenting defective products. Knowing what’s working will help to avoid costly errors or discrepancies down the line.
5. Establish a plan for dealing with overstock or excess inventory from returns. A method for every possibility will aid in decision-making based on data insights.
6. Ensure adequate communication and customer service during the returns process. Transparency and communication improve customer satisfaction and loyalty.
7. Regularly review and update return policies and procedures. Regular updates and changes to operations are essential to supply chain optimization and keep your returns strategy ahead of the competition. 

Boost Returns Management Processes With ModusLink.

Today’s consumers have the ultimate power of choice and the power of the purse. If a product doesn’t meet their expectations, or even if they simply decide they dislike it, shippers need to have a clear strategy for handling returns management. That’s the only way to avoid the inevitable backlash associated with zero or poor returns policies. Fortunately, working with a 3PL can help you understand your opportunities and threats within returns and what’s needed to succeed. Choose ModusLink, and don’t sweat the details of returns management. Connect with a ModusLink expert to get started now. 

Bibliography

Atkinson, Helen. “Sick of Returns? Use Them to Drive Brick-and-Mortar Buys.” Supply Chain Brain, 17 January 2023, https://www.supplychainbrain.com/articles/36426-sick-of-returns-use-them-to-drive-brick-and-mortar-buys. Accessed 17 January 2023.

Ravishankar, Shyam, and Abhirami Rao. “20 Biggest E-commerce Challenges in 2023 + Simple Solutions.” Vue.ai, 5 January 2023, https://vue.ai/blog/ai-in-retail/ecommerce-challenges-in-2021/. Accessed 16 January 2023.

Disclaimer:

Content is the opinion of ModusLink Corporation and is not intended to act as compliance or legal advice.

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As shippers and importers, there are many factors to consider when packaging and shipping products. In e-commerce, variety and agility are core to success. That includes packaging and distribution resources. It’s your role to figure out to reoptimize efforts and reduce costs. That’s a basic premise in any supply chain optimization strategy. Of course, it’s difficult to understand the importance and how packaging can influence operations on a global scale when rates are still so unstable. 

Consider this. Despite declines in the shipping industry, rates are still higher than average, putting new pressure on packaging and distribution strategies. According to Reuters’ data sources, “long-term contract rates finished 2022 about 20% lower than the pandemic peak of more than $8,000 per container. [And] maritime consultancy Drewry […] expects contract rates to halve in 2023. That forecast would put rates at about $3,200 versus the pre-pandemic rate of around $1,500 (Baertlein).” 

Rates at this level are simply inefficient globally, meaning that shippers should rethink their packaging and distribution strategies. Specifically, finishing product packaging closer to end users will yield significant benefits and opportunities. Here are the top benefits of such a strategy. 

1. Leverage Bulk Packaging Solutions to Get Lower Costs.

Companies looking to reduce their packaging and distribution costs should consider bulk packaging solutions. Bulk packaging is typically sourced from packaging distributors that partner with various manufacturers. This allows them to provide clients with a wide selection of packaging materials and design options. Packaging distributors buy in bulk and save money on packaging costs. Thus, businesses can often save significantly more than they would on their own. 

2. Improve Flexibility to Create Brand or Region-Specific Packaging.

Working with a packaging supplier to improve flexibility and create multiple packaging designs tailored is an advantage. Imagine building packaging to target specific brands or regions. Plus, packaging customization allows for unique packaging formats that help the product stand out from its competitors. For brands in highly competitive industries, custom packaging presents the possibility of increased visibility, eventually leading to higher sales. Custom packaging also makes it easier for companies to incorporate their branding messages into the packaging design, defining their presence in the market.

3. It Enhances the Optimization of Resources.

Optimizing packaging and distribution is essential to increase efficiency and minimize costs. Understanding the packaging and distribution process can help businesses save more resources, enabling them better to adjust their resources for a more significant impact. This includes reducing resource requirements across departments within your organization. Plus, knowing and understanding your global fulfillment footprint is invaluable to running a successful business

Streamline Finishing in Your Packaging and Distribution Strategy With ModusLink.

Doing more with less will always be paramount to supply chain management. Today’s shippers and global trade parties need to understand the vital benefits of finishing closer to consumers and how that translates into improving their manufacturing and distribution networks. The right packaging system and strategy take advantage of this fact. ModusLink can help you utilize these benefits to optimize your packaging and distribution process. Request more information on how ModusLink can reposition your finishing strategy for success to get started.

Bibliography

Baertlein, Lisa. “Analysis: Some ocean shipping rates collapsing, but real price relief is months away.” Reuters, 9 January 2023, https://www.reuters.com/business/retail-consumer/some-ocean-shipping-rates-collapsing-real-price-relief-is-months-away-2023-01-09/. Accessed 17 January 2023.

Disclaimer:

Content is the opinion of ModusLink Corporation and is not intended to act as compliance or legal advice.

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The state of cross-border e-commerce in the EU comprises a complex and dynamic array of factors that influence consumer behavior and the success of online retailers. E-commerce remains a popular trend in the EU, with many consumers turning to online retailers for shopping. This trend is particularly evident in the UK, where e-commerce accounts for a significant share of retail sales, and brands desire to reach customers through online channels. Let’s take a closer look at what’s happening throughout EU e-commerce and what companies can do about it. 

Rising Cross-Border Logistics Costs

Logistics costs and delivery times are important factors that can influence the success of e-commerce in the EU. Rising logistics costs refer to the increasing cost of transporting goods from one location to another, including fuel, labor, and other expenses. These costs can significantly impact the prices of goods and services offered by online retailers, as well as the overall profitability of the e-commerce industry.

In recent years, logistics costs in the EU have been rising due to several factors, including increased demand for online shopping, the expansion of e-commerce into new markets, and the impact of global economic trends. Specifically, costs rose 5.4 index points quarter over quarter in 2022, hitting 129.7, which is also 26.4 points higher year over year (IRU).

This has led to concerns about the sustainability of cross-border e-commerce in the long term, as well as about the ability of retailers to offer competitive prices and delivery times to consumers.

Logistics costs and delivery times will continue to be a significant concern for the e-commerce industry in the EU. Fortunately, there are a few ways companies can combat these costs, including

• Pass charges to customers. One potential solution to the challenges of higher cross-border logistics costs and longer delivery times in the EU e-commerce industry is to pass some of these charges along to customers. Shippers can do this by using surcharges or other fees that are added to the price of goods or services. While this approach may not be popular with consumers, it can help online retailers cover some of their increased costs and maintain profitability.
• Increase the minimum order value. Another way to overcome higher costs and timelines is to increase the minimum order value for cross-border e-commerce orders. By requiring customers to spend a certain amount of money on qualifying for free or discounted shipping, retailers can encourage larger orders and reduce the impact of logistics costs on their bottom line.
• Leverage direct injection and dropshipping. Finally, retailers can leverage direct injection and dropshipping to improve their supply chain management and reduce costs. Direct injection refers to shipping goods directly from the manufacturer to the customer, bypassing traditional distribution channels. This can help to reduce lead times and logistics costs, making it easier for retailers to offer competitive prices and delivery times to their customers. On the other hand, drop shipping involves partnering with third-party suppliers to handle the storage, packaging, and shipping of goods on behalf of the retailer. This cross-border logistics strategy can also help to reduce costs and improve delivery times, as retailers can take advantage of the expertise and resources of their partners.

Uncertainty & Complexity Over Cross-Border Logistics of Warehousing

Uncertainty and complexity over cross-border warehousing and shipping can be a major challenge for businesses engaged in cross-border e-commerce. Here are a few ways to address these issues:

• Decentralize your warehousing and distribution strategy: Instead of relying on a single, centralized warehouse, consider decentralizing your warehousing and distribution strategy. This can help reduce the risk of delays and disruptions and make it easier to adapt to changes in demand or supply.
• Increase traceability of goods for EU storage and warehousing: Ensuring that your goods are properly tracked and traced throughout the storage and warehousing process can help to reduce uncertainty and complexity. This can be especially important when dealing with cross-border shipments, as it can help ensure that your goods are properly accounted for and that you comply with EU regulations.
• Trouble finding proper and available storage for goods: If you’re having trouble finding adequate storage, it may be worth considering outsourcing fulfillment and optimization to a third-party provider. This can help ensure access to the storage and warehousing facilities you need without heavily investing in purchasing cross-border logistics infrastructure.
• Consider outsourcing fulfillment and optimization to a third-party provider: Outsourcing fulfillment and optimization to a third-party provider can help to reduce uncertainty and complexity by allowing you to take advantage of their expertise and resources, including payment methods and customs clearance capabilities. This can help to improve the efficiency of your supply chain and can also help to reduce the risk of delays or disruptions.

It’s worth noting that 21% of online shoppers abandon purchases due to delivery issues, according to a recent survey. By addressing the challenges of cross-border warehousing and shipping, businesses can help to reduce the risk of delivery issues and improve the overall customer experience.

Handling the VAT-Related Issues in Cross-Border E-Commerce

As with any process for freight moving, e-commerce markets in the e-commerce are subject to different regulations and fees. The most common fee associated with cross-border transportation is likely the VAT tax. There are several common problems that businesses may encounter when managing VAT costs in a global market (byrd technologies):

• Complex VAT rules and regulations: VAT rules and regulations can vary significantly from country to country, and it can be difficult for businesses to keep up with the latest changes. This can lead to compliance issues and potential fines if a business fails to apply the VAT correctly.
• Difficulty in determining the correct VAT rate: In some cases, it can be challenging to determine the correct VAT rate to apply to a particular product or service. This is especially true when dealing with complex or multi-stage transactions.
• Administrative burden: Managing VAT can be time-consuming and burdensome for cross-border logistics businesses, especially when dealing with large transactions. It can be difficult to keep track of all the necessary documentation and ensure that the correct VAT is applied to each transaction.
• Potential for errors: Even with the best intentions, businesses can make mistakes regarding VAT. This can lead to compliance issues and potential fines if the errors are not caught promptly.

EU cross-border e-commerce naturally involves a careful understanding of VAT, as it can significantly impact a business’s costs. It’s important for businesses to be fully aware of the VAT rules and regulations that apply to their particular products and services and to ensure that they comply with these rules at all times. This may require working with a VAT professional, such as a customs broker or supply chain partner. Such parties help to ensure that all necessary cross-border shipping and documentation are in place and that the correct VAT is applied to all transactions.

Businesses can take a few key steps to protect against VAT issues. These include:

• Get an EORI number: EORI, or Economic Operators Registration and Identification, is a unique identification number required for businesses that engage in cross-border trade with the European Union (EU). To get an EORI number, businesses must apply through their national tax authority.
• Classify products based on customs tariff numbers: It’s important for businesses to properly classify their products based on the correct customs tariff numbers. This ensures that the correct VAT rate is applied to the goods and helps to avoid any potential disputes with customs authorities.
• Enclose the commercial and pro forma invoice with all consignments: A commercial invoice is a document that outlines a sale’s details, including the sale’s price and terms. A pro forma invoice is a preliminary invoice issued before the goods are shipped. Shippers should include both documents with all consignments to ensure that the correct VAT is applied.

By taking these steps, businesses can help to ensure that they follow VAT regulations and avoid any potential issues that may arise in the course of international trade. It’s also a clever idea for businesses to work with a knowledgeable VAT professional or consult with their national tax authority to ensure that they are fully informed about the latest VAT regulations and requirements.

Streamline EU E-Commerce and Cross-Border Logistics With ModusLink

E-commerce in the EU is a complex and dynamic industry, with a wide range of factors that can influence consumer behavior and the success of online retailers. From rising logistics costs and delivery times to concerns about the environmental and economic impacts of e-commerce, there are many challenges that businesses must navigate to succeed.

Fortunately, solutions can help businesses streamline their operations and overcome these challenges. One such solution is ModusLink, a network and transportation partner that can help businesses optimize their supply chain management, reduce costs, and improve efficiency. Connect with an expert at ModusLink to get started today. 

Bibliography

byrd technologies. Guide For Cross-Border Trade in the European Union. 2022. 13 December 2022. <https://getbyrd.com/en/cross-border-ecommerce-eu-ebook/?hsCtaTracking=749e20c5-d0f2-455f-a353-d8d206c60894%7C4b6651f5-26e2-41b2-a670-621b8a73fcbb>.

IRU. 3 November 2022. IRU. 16 December 2022. <https://www.iru.org/news-resources/newsroom/european-road-freight-rates-soften-after-hitting-another-all-time-high-q3>.

Disclaimer:

Content is the opinion of ModusLink Corporation and is not intended to act as compliance or legal advice.

Introduction

Warehouse and distribution professionals understand that the timeline of order processing has ebbed and flowed significantly over the last few years. In September 2022, Reuters reported that “FedEx (FDX.N), United Parcel Service (UPS.N) and other delivery firms that struggled with too much pandemic-fueled demand from online retailers like Amazon and Walmart, now have the opposite problem – too much delivery capacity.”  

With such drastically different challenges year over year, shippers and BCOs must bolster their business health by focusing on end-to-end e-commerce solutions. There is no better time to do this than during peak season.  With the rising popularity of online ordering, the need for reliable digital shipping logistics and services is more vital than ever. Weak links in the supply chain, particularly with e-commerce logistics, warehouse, and distribution services can impact the entire supply chain. 

Failure to do so can further complicate logistics, add to existing bottlenecks and delays, lower on-time delivery ratings, weaken customer impressions, and eat into profits with higher operational costs.  It all goes back to improving logistics and routine operations with end-to-end e-commerce solutions.

What Is E-Commerce Peak Season?

Peak season is known as the time when retailers record significant hikes in sales (DCL, 2022).  Small businesses and large e-commerce platforms alike can discover this timeframe by looking at past monthly sales records.  It is not just the sales themselves that add to the load carried by the global supply chain during peak season. Reverse logistics and an inevitable load of return orders also impact e-commerce performance and planning with warehouse and distribution logistics. 

Reverse logistics and returns are often overlooked and expected as part of the cost of doing business. E-commerce return rates can often be expected to account for more than ¼ of all sales. In fact, a National Retail Federation study found that all retailers expect to see about 17.8% of merchandise sold to be returned both online and in person. This constitutes as much as $158 billion worth of goods, which is a staggering 56% increase from 2020. It is for this reason that end-to-end e-commerce solutions are so vital for the modern global supply chain. (NRF, 2022).

However, online stores preparing for peak season have different challenges than brick-and-mortar companies. Shippers and BCOs for an e-commerce platform must account for the timelines of shipping services, especially international shipping. Meanwhile, brick-and-mortar locations are focused on maintaining stock for purchases that are processed in person in real-time. 

Keeping up with accurate inventory flows can improve supply fulfillment, speed up deliveries, and ensure forward and reverse logistics are properly balanced and maintained. A responsive and transparent Order Management System (OMS) can help with complex, multi-brand, and omnichannel capabilities. Additionally, it offers a much more simplified platform with robust functionality and fast deployment by utilizing end-to-end e-commerce solutions effectively. 

What Is E-Commerce Peak Season?

Online shopping experiences the largest peak of sales during the holiday season of November and December. Warehouse and distribution center peak season typically predates this time frame as companies aim to get their products closer to their customers before having to pay expedited shipping costs. 

Peak season preparation is especially pertinent given the cross-border challenges over the last few years. The lengthened oceanic shipping process often has retailers and customers alike checking their tracking numbers constantly. Thankfully, automation has drastically changed the game for e-commerce shipping, especially when it comes to the ability to track shipments in real time via smart shipping labels. 

It is worth noting that according to some global supply chain experts, the entire year could be seen as a multi-faceted peak season. Ken Fleming, President of Logistyx Technologies spoke with SupplyChain247 experts about peak season trends and the need for improved warehouse and distribution management and logistics. 

He noted that “There have been times when peak season has either started earlier or ended sooner, but typically shippers can expect and plan for peak to start in late July and run through the first week of December. However, during the COVID-19 pandemic and pandemic recovery, peak has been a constant. Variables such as parcel volumes, carrier capacity limits, and escalating pricing have continued to grow, forcing industry leaders to quickly – and frequently – reimagine their shipping and fulfillment operations” (Ken Fleming, 2022).  Ongoing volatility and instability make end-to-end e-commerce solutions all the more vital for continued growth and recovery.

The E-Commerce Peak Season Checklist

Divining the future of peak season 2023 and all the future peaks will be challenging. Even with a robust plan of attack, it’s still possible to overlook core functions and needs. Shippers and BCOs can prepare their teams by following a peak season checklist with end-to-end e-commerce solutions. Further, the unique nuances of each company mean that the e-commerce checklist for one company may vary from another. 

For example, the below checklist notes inventory needs, but it’s possible that considering warehouse management for the short-term storage of returns, setting out racks, or otherwise assessing fall and summer leftover SKUs, may be higher priorities. 

Still, it helps to have something to start with and add to it as individual managers and teams work through their own process of utilizing end-to-end e-commerce solutions to improve warehouse and distribution logistics.

Inventory Logistics and Planning

Stocking up on inventory before the worst of peak season hits can make it easier to meet increased demand before and during peaks. Consider the historical purchases of seasonal items when necessary and plan for anticipated peaks. It is important to not be too rigid with predictive planning and to remain flexible as needed to accommodate exceptions and changes from year to year. The final way to improve inventory logistics and planning for peak season preparation is to stagger orders to ensure an ongoing supply of inventory during peak times.

Shipping Solution Planning and Pricing

Prices for everything usually go up around the holiday peaks, including fuel, shipping fees, and driver rates. Make sure the company shipping process is efficient to avoid unnecessary delays and additional expenses. Management must know which service levels are most cost-effective and align well with company values while remaining profitable in the long run. It is also important to keep tabs on competitors to ensure pricing is profitable yet attractive. Consider overhead costs when offering discounted shipping to encourage sales and keep profits high.

Carrier Selection and Returns Management

Who a company works with for shipping and logistics can make a huge difference for forward and reverse logistics. Pick the right fulfillment partner to manage capacity and stock with a scalable strategy that can be adjusted to accommodate real-time data. Companies need a reverse logistics plan for returns during and after the e-commerce peak season so they know where returned goods will be transported and stored in warehouses. Streamlining warehouse and distribution processes with advanced reverse logistics is key to good carrier relationships.

Staffing Needs and Considerations

Peak season is never the time to deal with driver shortages and related issues so staffing needs and considerations must be addressed. Management can offer refresher training to staff and consider raises or flexibility to promote retention and develop a system to get seasonal staff consistently trained. Pulling from talent pools of vetted providers for short-term or urgent staffing needs can help fill the gaps when peak season surges hit the hardest. Management can also follow a managing-by-exception approach to give staff more freedom and flexibility.

Website and E-Commerce Digital Presence 

Having a strong online presence and the right MoR pay model is essential for any business that wants to survive peak season rushes online. E-commerce websites must be integrated with payment service providers (PSP) and leverage custom tracking services and real-time monitoring of industry price trends. Service providers must work with management to ensure that all apps and integrations are up to date for mobile and desktop views. It is also vital that e-businesses solidify the checkout process, especially if utilizing a merchant of record (MOR) and other virtual or digital platforms. 

Promotions, Rewards, ad Membership Benefits

Customers usually expect to pay more for service during peak season, but that doesn’t mean they like it so softening that blow is always good. Managers should ensure all network partners and e-commerce 3PLs know about all promotions and that they offer them when appropriate. It is important to utilize end-to-end e-commerce solutions to improve communication with customers while using real-time data to rack consumer habits and customer behaviors to see applicable incentives. Reward loyalty and support customers during the peak season crunch. 

Customer Service Considerations for Shipping 

After sales and especially during the return process, companies must be able to keep customer service and need front and center. They must be prepared with a CRM to locate customer profiles and track data and trends. There should be a plan and a list of solutions for common issues and concerns to maximize customer experience and promote customer loyalty. Utilizing push notifications and automated communications for critical updates can help better manage higher-than-normal requests and queries during peak season shopping time.

Track Big Data Analytics in the Network

Data is key to surviving peak season and improving services each year. Service providers should implement sound end-to-end e-commerce solutions to enable data analysis and sharing with a comprehensive tracking system designed to monitor company and industry-wide trends. They should also look for ways to leverage digital automation and supply chain tools. This can help them better monitor warehouse and distribution trends compared to prior years’ data and trends. All of this can help improve future predictions and streamline the process even further.

While these eight categories are not exclusive, they are pivotal when it comes to moving toward a successful e-commerce peak season.

Use the Checklist and Partner With ModusLink for E-Commerce Peak Season Success

From a consumer’s perspective, peak season challenges are only visible in the final mile. However, an effective peak season checklist starts with efficient, proactive warehouse and distribution management. Shippers and BCOs can then leverage e-commerce solutions at each following step of peak season preparation as they watch the logistics landscape.

ModusLink offers end-to-end e-commerce solutions to streamline the process for shippers year-round. With B2B and B2C fulfillment strategies in play at their warehouse and distribution centers around the world, ModusLink utilizes modern IT to promote transparency and efficiency every step of the way. Schedule a conversation with ModusLink today to gain insight and solutions to apply in and out of peak season.

Bibliography

LM Staff (2/4/2022). The 12-Month Peak Season! SupplyChain247. Accessed 10/31/2022 From https://www.supplychain247.com/article/the_12_month_peak_season 

Danielle Inman (1/25/2022).  Retail Returns Increased to $761 Billion in 2021 as a Result of Overall Sales Growth. National Retail Federation. Accessed 10/31/2022 From  https://nrf.com/media-center/press-releases/retail-returns-increased-761-billion-2021-result-overall-sales-growth 

Lisa Baertlein (9/19/2022).  2022’s holiday delivery challenge: softening e-commerce demand. Reuters. Accessed 10/31/2022 From https://www.reuters.com/business/retail-consumer/2022s-holiday-delivery-challenge-softening-e-commerce-demand-2022-09-19/ 

 Maureen Walsh (10/14/2022). Checklist for Ecommerce Peak Season Readiness. DCL. Accessed 10/31/2022 From https://dclcorp.com/blog/holiday/peak-season-checklist/ 

Challenging, yet rewarding

There is plenty of research and evidence that E-commerce will continue to grow in next few years to come. Companies engaging in E-commerce are growing, customers that purchase their products online are normalized across different product branches and payment methods that better suit online transactions such as PayPal/Bitcoin are becoming increasingly popular. The reasoning for this growth can be largely contributed to the flourishing of technological advancements.

Conducting business online is now easier than ever as there is a wide range of platforms for you to sell your products. Outsourcing the End-to-End Supply Chain activities is also getting more common due to the well-established third-party companies that provide professional aid to all that seek help. SMEs especially are able to scale accordingly when using outsourced Supply Chain activity.

Customers are buying their products more frequently through online platforms. This is mainly due to the convenience factor combined with the provided Supply of products, regardless of their respective branch. Nowadays, all sorts of products are bought online from groceries to wedding gifts to personalized clothing.

Lastly, payment methods are also receiving an interesting change in dynamic which contributes to the growth of Ecommerce as a concept. Very simplistic yet highly functional payment methods such as ideal are improving rapidly. A few years ago, when paying for your purchase online through ideal, you had to use your bank reader and card to finalize the purchase. This was a big hassle and turned off many customers looking to buy their products online. Nowadays, just one click of a button is required on your mobile phone to complete a purchase. You are even able to preset payment settings for known companies so that you do not need to complete a full payment process to finish the transaction. This saves a large amount of time and effort. Groceries for example can be purchased automatically by setting dates/times when running out.

In short, conducting E-commerce can be highly rewarding if done right. Needless to say, there are plenty of challenges within the industry. New challenges are also arising as some market phenomena are changing. The increase in popularity of same-day-delivery started to weigh on the supplier companies such as DHL/UPS/FedEx/TNT and resulted in a decrease in supplier performance and successful delivery KPI’s. This is just one of the many challenges that come with Ecommerce. The top 3 biggest challenges for 2022 are listed below.

Top 3 E-commerce challenges

• Competitive advantage & Competitor Analysis

With the rise of E-commerce companies, it is more and more difficult for new startups to differentiate themselves from their competition. While being difficult, it is also essential as a strong USP often provides a competitive advantage that allows companies to succeed and scale within the E-commerce business. How is this done exactly? The best way to leverage a strong competitive advantage is by continuous Competitor Analysis.

Any company within the E-commerce business looking to succeed ought to do a strong thorough analysis of their competitor. You need to know the ins and outs of your main competitors in order to reinforce your own strategy. Knowing your competitors’ products from A to Z, the way they are gaining their prospects, their handling of customers is vital as it allows you to take what works and discard what doesn’t. Knowing your competitors thus also provides you with the knowledge and ability to stand out. Study your competitors, understand what their missing and leverage it to gain your competitive advantage.

• Customer Loyalty

According to Vue.Ai et al. (2022), the importance of customer loyalty can be illustrated by the following two main facts.

*It can cost up to 5 times more to acquire a new customer than retaining an existing one.

* The success rate of selling to a current customer is 60-70% compared to only 5-20% success rate of selling to a new customer.

These two facts clearly emphasize the importance of customer retention and loyalty. Once you have acquired a customer, keeping that customer, or turning that customer into a fixed customer is highly important. This process should be seen as fuel for your business. How are companies able to do this best? Strong customer service should be top priority as this does wonders for customer retention. Follow-up is equally important as proper reach-out attempts have shown to provide remarkable conversion rates, if done correctly. Lastly, rewards. Rewarding returning customers through promotions or discounts could strongly affect your customer loyalty.

• Shipping and Delivery

On-time shipments and deliveries have proven to increase customer satisfaction by remarkable amounts. In turn, delayed shipments and lackluster delivery have proven to drastically decrease customer retention whilst creating bad brand image. With fuel pricing increasing and heavy pressure on delivery companies it is vital that companies maneuver the right way when trying to get their products to their end-customer. As discussed before, making use of a professional, experienced Supply Chain company that offers end-to-end aid can be of immense help when trying to scale your business. Even large companies should not overlook the option to outsource their supply chain as professional companies often are able to leverage great results by consolidating shipments, offering 24/7 customer service and well-established payment solutions/support.

Would you like to know more on the biggest challenges in E-commerce? Talk to a ModusLink Expert today by clicking here.

Bibliography

Ecommerce Sales Size Forecast. International Trade Administration, Accessed September 28, 2022, From https://www.trade.gov/ecommerce-sales-size-forecast

Dan Berthiaume (July 18, 2022), Survey reveals perils of poor delivery experience, Accessed September 28, 2022, From

https://chainstoreage.com/survey-reveals-perils-poor-delivery-experience

R-04_Importance of Payment Service Providers (PSP)

J. (2022, 12 mei). 16 eCommerce Challenges & Issues To Anticipate In 2022. Digital Silk. Geraadpleegd op 8 mei 2022, van https://www.digitalsilk.com/challenges-of-ecommerce

Mensak, C. (2022, 12 mei). The 9 biggest B2B e-commerce challenges businesses face. Sana Commerce. Geraadpleegd op 8 mei 2022, van https://www.sana-commerce.com/blog/top-b2b-ecommerce-challenges/

Netsolutions. (z.d.). Netsolutions. Geraadpleegd op 7 mei 2022, van https://www.netsolutions.com/insights/ecommerce-business-challenges-and-solutions/

Post, J. (2022, 18 februari). Top E-Commerce Challenges Facing SMBs. Business News Daily. Geraadpleegd op 7 mei 2022, van https://www.businessnewsdaily.com/6028-small-ecommerce-challenges.html

Vue.Ai, T., Vue.Ai, T., Rajasekar, A., Vue.Ai, T., & Vue.Ai, T. (2022, 28 april). 10 Biggest Ecommerce Challenges in 2022 + Simple Solutions. Vue.Ai Blog. Geraadpleegd op 7 mei 2022, van https://vue.ai/blog/ai-in-retail/ecommerce-challenges-in-2021/

M-commerce

In the digital day and age, online shopping and shipping services, known as e-commerce or m-commerce in some circles, are on the rise. Knowing how to utilize end-to-end e-commerce solutions in an effective and efficient manner is a big part of successful shipping services.  In fact, more companies are turning to fulfillment-as-a-service providers, such as ModusLink, to simplify the process. And the most successful companies today are those that support the consumer’s journey through online shipping and commerce. But still, digital e-commerce is changing the face of standard operations.

The customer buying journey has drastically changed over the last twenty years. What used to only occur through in-person transactions has not been shifted to online shopping. According to the latest US Census data, “E-commerce sales in the second quarter of 2022 accounted for 14.5 percent of total sales.” With a smartphone in the backpocket of most Americans and more companies working across international boundaries, relying on cross-border e-commerce, it comes as no surprise that mobile commerce (m-commerce) has taken over the digital e-commerce playing field.

Defining M-Commerce

M-commerce or Mobile commerce has been a growing phenomenon for some time now. Forecasts from various sources continue to show the potential growth if Mobile commerce were to continue its path forward (which is expected). Our previous article ‘The importance of M-commerce’ emphasized on the current state of the concept, as well as highlighting the main important aspects that explain the reasoning behind the popularity.

But to success, it’s important to focus more on the upcoming/rising trends for M-commerce, also known as e-commerce and popularized across many platforms or tools, such as Microsoft Dynamics’ GP e-commerce. Keep a lookout for these trends as jumping on the wagon early might leverage your company’s significant growth increases and competitive advantage with end-to-end e-commerce solutions.

Digital E-Commerce Has Gone Mobile

At its core,m-commerce entails all activity required for the purchase of goods or services through a mobile device such as a smartphone or a tablet. According to a 2021 report by Wurmser (2021), “US retail mcommerce sales grew at 41.4% in 2020 and will grow another 15.2% in 2021, to reach $359.32 billion. Annual sales should nearly double between now and 2025.” This specific market  developed at a rapid pace with new technology such as  mobile banking, electronic boarding passes, food couriers and rideshare apps.  

These innovative implementations have completely changed the way daily tasks are handled. Going on a flight without a paper boarding pass has removed the stress of potentially losing it.. Even in-person grocery store transactions can be fully completed on a mobile phone.The smartphone has truly become an important extension of one’s self.

While the consumer may not be aware of changes from computer-based sales to m-commerce, they are certainly aware of the convenience of it. The change in digital e-commerce experience has largely been built alongside the digital marketing shift to decreased delivery time with real-time updates. Retailers and other business owners must be aware of the rising trends within m-commerce to maximize customer experience with the best ecommerce solutions.

According to a 2021 report by Wurmser (2021), retail m-commerce sales’ share in the US as a percentage of the total sales is continuing its growth expecting to reach 10.4% in 2025. This means that M-commerce in the US market will nearly double its share of total retail sales between 2020-2025.

M-Commerce Trends

The growth of m-commerce is largely due to past and present innovative concepts. Microsoft Dynamics GP e-commerce is among one of the many game changers to order management. Decision-makers must understand the latest industry innovations to get their companies off on the right foot in every digital shift. As such, the trends below are prime examples of end-to-end e-commerce solutions that should be followed closely.

Shopping Personalization

While adjusting the shopping experience based on the individual customer in question is not anything new, the Mobile commerce market has provided new touch points throughout the customer journey. Companies have benefited from the rise of social media and influencers to encourage and  personalize the mobile shopping experience. Pixel tracking, following advertisements, and mobile reminders after downloading applications are all methods that are highly effective at new customer acquisition and retention.

When conducting M-commerce, pay close attention to the ability and opportunities to personalize the shopping experience for your customer as new methods are introduced frequently. Companies now make use of ‘Predictive Analytics’. Predictive analytics are achieved through the use of Big Data. Data is being used within digital e-commerce to discover relationships and patterns between the historic data and outcomes to predict likely future behaviors.

Cryptocurrency Payments

Cryptocurrency has increased growth tremendously over the past years. It is no longer unusual for anyone to invest in cryptocurrency. The cryptocurrency market is expected to reach 1.40$ billion in 2024. The security and decentralization of cryptocurrency restrict government intervention, in turn stabilizing the security of the monetary value. The decrease of trust in Fiat further builds on this notion contributing to the expected increase in popularity of cryptocurrency. 

Many digital e-commerce companies agree with the above and implement cryptocurrency as a possible method of payment for various purchases, complicating order management. Customers appreciate the introduction as large companies show that the method of payment is being used increasingly frequently. 

Together, more relationships reduce costs associated with customer acquisition and retention. It is important for any m-commerce business to follow the crypto trends, and to a degree, this means leveraging the different means of social commerce. 

In other words, transactions occurring across social media platforms that might rely on cryptocurrency should also be considered in your m-commerce strategy. It is recommended to introduce this payment method, when possible, through APIs or other e-commerce integrations. Of course, different payment service providers (PSP) may offer different requirements for completing 

AR (Augmented Reality)

Perhaps one of the newest concepts/trends is the concept of Augmented Reality. Companies such as IKEA have proven to gain leverage using this early concept by introducing innovative methods, such as the famous ‘Try-On’ before you buy. This is essentially an integration within the IKEA mobile application that makes use of the mobile camera to visualize the object of purchase in your own living room. You are able to place and view the object in your own environment before purchasing. 

There are plenty of other companies seeing the value of AR, ranging from Amazon to an assortment of retailers. Shippers should keep an open mind and follow this trend accordingly to make the most of end-to-end e-commerce solutions.

Boost Your M-Commerce with ModusLink

M-commerce trends are important to follow, keeping in mind the growth of the concept. Would you like to know more on how to implement M-commerce correctly within your business and how to choose a proper fulfillment partner? We are here to help make end-to-end e-commerce solutions easier to access, manage, and implement. Talk to a ModusLink Expert today by clicking here. 

Bibliography

Clearbridge Mobile. (2015, 12 november). Why Retailers Need To Pay Attention To Mobile Personalization. Geraadpleegd op 18 april 2022, van https://clearbridgemobile.com/why-retailers-need-to-pay-attention-to-mobile-personalization/

Mobile Commerce. (2022, 11 maart). BigCommerce. Geraadpleegd op 17 maart 2022, van https://www.bigcommerce.com/

O’Connor, F. (2022, 31 maart). 8 mobile commerce trends that will dominate through 2022 and beyond. eCommerce Customer Service Software | eDesk. Geraadpleegd op 18 april 2022, van https://www.edesk.com/blog/mobile-commerce-trends/

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