COVID-19 Changes E-commerce Supply Chain Logistics

July 14, 2020

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The Global E-commerce Supply Chain Has Been Disrupted:

Politicians, scholars, business management consultants and industry experts can all agree that COVID-19 has caused global disruptions in e-commerce supply chain management. Thankfully, they also agree that the lessons learned during this economic upheaval will force companies to become more resilient, adaptive and agile with regards to e-commerce supply chain logistics, technologies, best practices and strategies during AND post COVID-19.

New consumer behavioral changes will likely impact online selling and services for years to come. Simply put, if what worked yesterday isn’t working as well in today’s marketplace, accept that redirection and evolution are necessary. Perhaps you need to reassess your business value chain, partners and processes to prioritize your response plans?

E-commerce Supply Chains Must Accommodate a Surge in E-commerce Spending:

Many consumers are currently avoiding public places and self-isolating even as global economies reopen, yet online shopping is surging upwards. A survey by SearchEngineLand in March 2020 found that people are spending on average 10-30% more online even though they expect a recession in the coming months and year. Forbes reports that since April 21, 2020, U.S. retailers’ online year-over-year (YoY) revenue growth is up 68% from January 2020. They also forecast 129% YoY growth in U.S and Canadian e-commerce orders as of April 2020.

According to emarketer, some e-commerce retailers have thrived solely because of consumer self-isolation and a change in consumer priorities. The “new essential” products defined during COVID-19 include items that make life easier while staying at home: food, office supplies, medical, health and fitness, beauty and cosmetics, housewares, home improvement and toys/hobbies categories. Sales for these categories are 39% higher in April 2020 compared to March 2020.

To better accommodate the “new normal” of consumer demands and shopping patterns, automated and customized supply chain logistics and e-commerce supply chain strategies are now more important than ever. 

How to Meet the New Challenges of E-commerce Supply Chains:

Per online research company Comscore, Amazon, the world’s largest e-commerce retailer, saw their website traffic surge to 2.54 billion visitors when the WHO declared COVID-19 as a global pandemic in March 2020 - 65% higher from March 2019. The demand for Amazon’s products and services was actually too high for its current infrastructure, forcing them to limit the purchase and delivery of non-essential items. Pre COVID-19, many companies would welcome the problems of “too high” demand, website traffic and sales. 

Analyzing how the largest e-commerce companies like Amazon and Walmart have responded to an upheaval in supply chain logistics (i.e. higher volumes of demand, sales, sourcing, production, e-commerce packaging, inventory management and transportation), we are able to provide an insight into the future of e-commerce best practices. The goal is two-fold: 1) adapt and fortify your internal processes and 2) ensure your business partners are committed to doing the same.

The economic and social disruptions caused by COVID-19 are driving businesses to become more adaptive and agile within their e-commerce supply chains; to demand efficient collaboration from their partners; and to analyze future technologies that support these objectives.  

E-commerce Logistics and Supply Chain Partners:

E-commerce companies do not have to be as large or as profitable as Amazon or Walmart to mimic their successes and learn from their mistakes during COVID-19. However, customers do expect near-immediate gratification and higher service-level expectations thanks to the “customer experience” set by and provided by Amazon. Businesses utilizing supply chain management in e-commerce must pivot and redirect efforts to accommodate new demands. Supply chain partners must focus on the following best practices to achieve these consumer expectations:

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E-commerce companies can oftentimes scale their business to these demanding standards without heavy impact on their budgets. Customized e-commerce packaging reinforces brand recognition and ensures less waste and damage to products. Automation processes save labor costs and time, and are generally safer. Vendor Managed Inventory (VMI) and Just In Time (JIT) supply chain best practices streamline inventory management, warehousing costs and order fulfillment. These programs actually reduce the cost of production and fulfillment, while simultaneously optimizing the e-commerce supply chain logistics.  

As an e-commerce and supply chain solutions provider, Victory Packaging optimizes your logistics and supply chain management to increase service levels to your customers by acting as your total packaging supply chain provider. We will partner with you to understand your challenges and present customized, logistics management solutions in your supply chain.

Our ability to deliver innovative services and enhanced packaging processes with a total-cost optimization approach to customers makes us an industry leader and valuable supply-chain partner. With 65 locations across North America, we can assist with e-commerce packaging, kitting, fulfillment, assembly, e-commerce warehousing and/or inventory management through VMI and JIT services. 

If you are experiencing high unpredictability of e-commerce logistics caused by supply and demand dynamics, contact our supply chain management experts to learn how we can help scale to your goals. We are passionate about our clients’ needs and are adaptable to changing economic patterns.

 

Topics: fulfillment, ecommerce, packaging supply chain, packaging trends, featured