Shippers are moving consistently toward sustainable and more digital solutions, which help cut supply chain costs and make purchasing more convenient for consumers. The concept of drop shipping has become central to online businesses that rely on shipping to complete e-commerce solutions. Here are ways consumers are altering the course of retail, in which drop shipping boosts revenue for retailers and manufacturers.
Steady Adoption of E-commerce
A recent DiCentral and Lehigh University study examined the benefits and challenges for supply chains to shift toward online shopping and home delivery strategies to meet consumer demand. The former is a B2B integration services provider. The survey was sent to C-level executives of retail and Consumer Packaged Goods manufacturing.
The results show a third of retailers agree traditional shipping methods are a hindrance, as 28 percent believe their existing processes are not ready to support drop shipping. Nearly half of manufacturers surveyed say they cannot support drop shipping due to competing priorities, as 40 percent face integration challenges.
How Online Purchasing Has Changed Logistics
Due to the unstoppable growth of online sales, many companies have had no choice but to adopt a multi-channel sales model or face extinction. The past decade e-commerce has redefined retail across the world, accounting for nearly 12 percent of global sales in 2018. This figure grew to 14.1 percent in 2019. Global sales are projected to surpass 20 percent by 2022, according to Statista.
This consumer shift toward e-commerce has led retailers to confront challenging complexities in logistics. As a solution, retailers have gravitated toward outsourcing to firms that specialize in turnkey solutions for third-party logistics. The main risk, then, becomes relying on the right provider to boost customer satisfaction.
Furthermore, now that consumers have so many purchasing options online at their fingertips, this new e-commerce paradigm raises consumer expectations on delivery times. Consumers now expect packages to arrive by a certain deadline, otherwise they may publish negative reviews online. Delays are no longer acceptable in a world where alternative competitors are just clicks away. This reality has increased the value of real-time data among suppliers that must invest in IoT technology.
Winning Consumers with Free Delivery
Not only are consumers gaining more command of how they purchase and receive products, they can also pick and choose competitors based on free shipping. Not all companies offer free shipping, but the ones that do are gaining a competitive edge by creating stronger customer loyalty.