Today, when individuals place an order online, they typically expect to receive the product almost immediately. This may seem like nothing new and comes from the traditional expectation of exchanging money for goods or services. However, the trend of customers expecting near immediate results is something much more recent altogether.
With the rise of companies offering free shipping, or free expedited shipping on certain qualifying offers, consumers have become more predisposed to buy items online. In the past year alone, ecommerce sales increased by 16 percent.1 Companies are evolving to keep up with demand. Amazon in particular offers their Prime membership with free two-day shipping on any of the 40 million eligible items.2 Companies such as Walmart have also entered the competition for consumer spending by offering two-day shipping on purchases of $35 or more.3 Apple, Best Buy, CVS, and Jet are other companies that also offer similar options. To address the continued evolution, companies are partnering with their logistics providers to help navigate the competitive market.
The Consumer Mindset
As this trend grows and more people purchase items online instead of a traditional brick-and-mortar location, it’s easy to understand why the consumers’ desires change from expecting a package in a week to wanting their package delivered in two days. The fast-paced timeline of ordering an item and expecting it to be delivered within one or two days is reworking how supply chain providers and shippers work together.
Another trend that is advancing in the supply chain industry and helping shape the consumer mindset is the evolution of package tracking. If a package is expected to arrive within two days, many people begin checking their package tracking status provided by the shipper almost immediately. With details now recorded as soon as the shipping label has been created, including each shipping depot that it passes through, and once it is out for delivery, it’s hard to blame an earnest buyer for keeping track of their package throughout the process. Third-party logistics providers could assist with this growing trend by integrating transportation management services into the shipping process. This service uses tools and software systems to track data in real-time providing the tracking information to the shippers, who then are able to provide the consumers with the ability to track their package throughout the delivery process.
Shaping the Industry
The logistics industry continues to thrive due to the rising number of shipments delivered each year. Amazon shipped an estimated 5 billion shipments worldwide in 2017.4 There has been a constant increase in packages being shipped throughout the United States over the last few years, and with more companies joining the race to be the next go-to e-commerce site, this trend is likely to continue rising.
The “Amazon effect” is a strong example of how the industry is going to continue to experience a large amount of growth. Amazon Prime membership has nearly doubled in recent years, with initial estimates in 2015 of 41 million members, up to 90 million members in 2017.5 Currently, one out of every four people in the U.S. have an Amazon Prime membership.5 The popularity of these memberships continues to grow and become more common across the U.S. The consumer demand of receiving their online purchases almost instantaneously is changing how the logistics industry exists.
Due to the constant evolving consumer mindset and the rising number of shipments, the industry is looking towards a future focused on new technology. In order to keep up with the rapidly growing demand of supply chain services, technology such as warehouse robotics and autonomy, will play a key role when advancing the industry.
It’s now more important than ever for suppliers and distributors to be innovative and on top of every step in the process in order to meet the demands of the customer. As the consumer mindset changes, the logistics industry must continue to evolve in order to keep up.