The recent spectacular expansion of the Irish and United Kingdom logistics and distribution sector has been largely driven by the internet and electronic commerce. As welcome as the growth has been to industry participants, there is a consensus that online sales have mandated significant changes in the way they do business and that evolution is going to be the constant watchword for companies trying to achieve growth. In this piece, we discuss the three key ways in which online commerce has triggered improvements in the demand chain.

The BBC reported in late November that internet retail giant Amazon had broken its own formidable sales record in the UK on Black Friday. The volume of transactions illustrates the way in which online sales are moulding logistics and distribution in the following ways.

1. Speed

Consumers demand quick delivery of their goods and will give their custom to companies which accomplish this. To deliver this speed of service, firms have invested not only in highly-trained proficient staff but also in technology such as Radio Frequency Identification Devices (RFIDs), which help warehouse staff locate goods and ship them with previously unimaginable speed.

2. Certainty

Customers and retailers want to be able to track their packages. Logistics and distribution firms with the capability of providing real-time updates on a load’s location have a clear edge over organisations which don’t have advanced technology such as RFIDs.

3. Low Costs

Buyers expect inexpensive or free shipping. A study was recently commissioned by logistics corporation UPS regarding strategies for managing shipping costs. Its starting premise was that “free shipping is widely used by e-commerce retailers and is generally perceived to be extremely effective as a marketing and promotional tool to increase sales. The majority of consumers consistently cite free shipping as a motivating factor in why they purchase on a given website”. This necessitates economies in all stages of the demand chain, with packaging, pallets and unit loan design being the constant targets of modification for cost savings. Likewise, retailers and warehouses are looking for cost-effective storage solutions, including pallet racking in Ireland, which can be found, for example, when you visit https://www.rackzone.ie/pallet-racking.

Companies adapting to these new realities and anticipating future trends are giving themselves a real platform for growth in the coming years.