Innovation will steer e-commerce logistics through the downturn

We may be edging out of recession[1], but market uncertainties persist. E-commerce businesses continue to grapple with reduced demand and shrinking profit margins. And sadly, global supply chain disruptions will be part of life for the rest of the year.

At the same time, consumers have incredibly high expectations of fast, yet sustainable, and low-cost parcel deliveries. In our recent Shipping and Returns survey, we found that 29% of 18,000 respondents across 18 countries, said sustainable shipping was a significant factor when making a purchase. Globally, 43% of online shoppers[2] consider delivery costs pivotal alongside value for money and product quality.

Amidst these challenges, innovation shines as a beacon of hope. It's through strategic adaptations and technological advancements that logistics providers not only weather the storm but emerge stronger, poised to support retailers through adversity and beyond.

Transformative technological advances

Innovations such as automated warehouses, AI-powered route optimisation, and VR-enhanced supply chain management, are driving efficiency and scalability to unprecedented levels.

These technological advancements extend to consumer-facing aspects as well, with hyper-personalised shopping interactions and immersive product engagements developing fast. Virtual try-on experiences and AI-driven recommendations are enhancing convenience and satisfaction, fostering increased consumer loyalty and engagement. If these tech tools can help reduce returns rates – a bugbear for many retailers particularly in the fashion sector – so much the better.

Another crucial aspect driving resilience in the e-commerce logistics sector is technology integration and automation in warehouses. From robotic over-labelling arms streamlining operations to advanced automation technologies optimising warehouse management systems, logistics providers are harnessing the power of technology to boost productivity and enhance service levels.

For example, Asendia’s newly automated system at our Heathrow warehouse has driven a significant parcel throughput increase on behalf of e-commerce brands. This can achieve a rate of up to 7,200 parcels per hour, with the site open seven days a week, and able to operate 24 hours per day.

By automating repetitive tasks and implementing data-driven analytics, logistics companies are not only improving efficiency but also gaining valuable insights into consumer behaviour and market trends, enabling them to make informed decisions even in turbulent times.

Strategic partnerships and network optimisation

Perhaps one of the most impactful strategies reshaping the industry is the formation of strategic partnerships and the optimisation of delivery networks. In times of economic downturn, cost-obsessed retailers seek efficient and affordable logistics solutions. By forging alliances with other industry players and optimising their networks, logistics companies can ensure swift and cost- efficient delivery.

For instance, at Asendia we collect mail and parcels, consolidate them, process them, manage customs clearance, and then hand them over to carefully chosen final-mile delivery partners in each country, with our technology enabling access to each service and shipment tracking.

Our Shipping and Returns survey found that 30% of shoppers do not shop cross-border because they think shipping would take too long. This hammers home the importance of building trust and being transparent with overseas shoppers. And it’s through innovative local partnerships, that we will see this cohort of cautious shoppers change their mind.

The Human Element - HR, leadership, and purpose

While technology plays a pivotal role in enhancing operational efficiency, the human element remains equally crucial in fostering resilience and unity within the workplace. Even if new tech tools are being deployed to run supply chains, people are at the heart of most logistics companies today. Innovation can play its part here too.

Empathetic leadership, purpose-driven initiatives, and robust HR practices are essential in navigating the challenges posed by e-commerce downturns. By prioritising employee well-being, fostering a culture of innovation, and aligning organisational goals with a greater sense of purpose, logistics specialists can cultivate a motivated workforce, capable of overcoming obstacles and driving success in any economic climate.