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Fulfilling promise: how tech solutions are enabling ecommerce
May 6th - 2022
5th May 2022 – Logistics Tech Outlook
We live in a world of contrasts. Since biblical times, humankind has been plagued by… well, plagues, that have traditionally hindered growth and sent entire countries back into the past. So, it’s perhaps surprising that the 21st century’s very own pandemic, has had the opposite effect, and triggered one of the fastest accelerations yet in human behaviour and, as a result, technological development.
During Covid-19, online consumer spending shot through the roof, making vast profits for online retailers like Amazon and Alibaba and catapulting them into stratospheric earnings. Already growing at a compound rate of almost 15% pre-pandemic, ecommerce surged as the world went into lockdown. Internet penetration in Europe leapt to 89% and consumers turned in their millions to online shopping.
But, back to our world of contrasts: this rise in online activity only exposed the deep flaws in our physical capabilities and revealed an online-offline divide. Faced with rising demand from armchair shoppers and the unique environment that Covid created, businesses struggled to manage their own supply chains, both upstream and downstream all the way to the client. Remember the empty supermarket shelves and the ‘delays due to Covid’ messages all over the place? Bottlenecks in fulfilment and logistics rose to the fore, especially in the direct-to-consumer market, where efforts to scale operations to meet global demand were hampered at every turn by lockdowns and other restrictions that disrupted the supply chain globally.
Fast forward to today’s post pandemic marketplace and expectations are well and truly established. Customers used to the next-day convenience of products on their doorstep, won’t tolerate a slower service. So, what are the challenges still facing ecommerce and, more importantly, how tech solutions are enabling ecommerce?
Achieving global scale
Big players, like Amazon in the US or Zalando in Europe, have invested millions into their infrastructure to cope with existing peaks of demand and to anticipate the future, as projections show parcel volumes will double again by 2026.
A strong fulfilment network allows these big players to ship fast to consumers, usually for free, and offer manage returns. But this resource intensive approach is expensive enough to put it out of the reach of most small to mid-size e-retailers, so what do they do?
Canada’s rising ecommerce enabler star, Shopify, solves the problem of needing an expensive European network by not having one. Instead, they rely on byrd, a tech-enabled fulfilment platform that gives its merchants access to a pan-European network via app, using cloud-based software. Thanks to their innovative approach, byrd can stay responsive to trends, customer behaviours and markets as they evolve and can arrange to move and store inventory closer to where their customers’ own online shoppers are, reducing delivery times and costs.
byrd’s systems integrate with the sellers’ software via API, which means they can log and track inventory, move goods to fulfilment warehouses and push data back to the e-commerce system to update the order status. And because their data is automatically synced with the warehouse, goods are shipped to online shoppers the moment an order is placed.
As founder and CEO, Alexander Leichter, stresses the importance of what byrd brings to the market: “the key is in adaptability – staying responsive to our clients’ ever-evolving requirements and honouring the brand promises they make to their own online shoppers. We can turn around carbon net zero deliveries and even customised packaging solutions. And In addition, our tech-enabled solution enables us to fulfill organic products, which requires certified warehouses as well as LOT tracking.”
byrd‘s approach, using smart technology to handle logistics on behalf of clients, helps fast growing sellers achieve scale without heavy investment. It also tackles the problem of Europe’s fragmented ecommerce market, particularly across national borders, where changes in import, tax and regulatory regimes can significantly slow down small and out-of-town operators.
Manuel Silva Martínez, General Partner at Mouro Capital, a venture capitalist firm that invested in byrd during the pandemic, explains: “We’re not just seeing this in Europe, but in the US, in Latin America and really all across the globe. The process of removing barriers to entry in any given market effectively opens up cross-border ecommerce as a whole, allowing consumers to access a much broader product choice, and trusting in-market specialists to handle the logistics.”
As new solutions gain momentum, and fully integrated ecommerce systems are being added to the tech-stack of online retailers, opportunities are opening up for merchants to scale their business. Disrupters bring new thinking and, crucially, new technology to help solve some of the pain points that companies have traditionally faced, allowing them to get on with the more important task of growing their business while truly becoming their partners in such endeavour.
Contrast that to the days of waiting endlessly and blindly for a package to be delivered and we see a bright future for online retailers and their growing army of customers.
Sustainable supply chains
Of course, as ecommerce and the international movement of goods gathers momentum, so too does the question of sustainability. With increasing regulatory and societal pressure, it’s only a matter of time before companies will have to report on key sustainability metrics and take active steps to reduce and offset their own footprint. That means understanding and managing social and environmental impact throughout the supply chain.
Manuel Silva Martinez sees better information and more accurate data as vital to understanding, and therefore managing, the commercial footprint. “It’s how you build trust – through transparency all along the supply chain – and how you identify the improvements that can lead to more sustainable performance.”
He continues: “We are also seeing exciting developments in the circular economy, which can be a big factor in reducing waste and tackling emissions. It moves us on from the ‘take, make and waste’ principles of past decades, to focus instead on the notion of ‘reduce, reuse and recycle’. And, as goods pass through multiple hands, either by leasing arrangements or through secondary markets, smart fulfilment and smooth logistics become key to the equation.”
At the moment, the absence of a clear and common definition of sustainability measures or a binding framework to manage them is one of the main challenges that companies face. But what is clear is that the need for action is more urgent than ever before, and each one finally finds a way to play their part in protecting the environment.
It’s not a question of ‘if’ new sustainability standards will be introduced, but rather one of ‘when’ and ‘how’. And technology is critical in addressing the gaps that exist in measuring and reporting sustainability consistently. Those companies that are able to anticipate the change and embed sustainable practices into their business models are poised to outperform. Which is good for them and for us all.
Read this article at Logistics Tech Outlook
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