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Posted by Danyella Davis on 2017-10-24

E-commerce – Get Involved or Get Left Behind

E-commerce is about the customer, not retailers. Mind blowing right? Not really. Convenience is key, and online buying affords customers that luxury; a luxury where consumer expectation is undoubtedly associated with ordering convenience, delivery effectiveness, and minimal shipping cost on a 24/7 buying cycle.

Immediacy through online buying is rapidly changing industry models and expanding its footprint in cold chain logistics.

According to Forrester Research Inc., within the next 3 years, U.S. retail shoppers will spend more than $500 billion online. As digital purchasing continues to reshape buyer demand, FMI and Nielsen says grocery is the next big retail sector to be affected by e-commerce. Their recent study suggests by 2025, 20% of grocery spending could be online. That’s $100 billion in annual consumer sales.

These gains present interesting opportunities and challenges as industries try and meet the needs of digital shoppers, especially for cold chain logistics.

Supplying these consumers’ goods means having reachable storage facilities and logistics experts who can provide services such as each picking and packing individual online orders, cooling perishable items and replenishing stock to meet the demands of a 24/7 buying cycle.

Because e-commerce further eliminates time and geographical distance, high-response times are needed to meet customer requirements, and not just during peak seasons as a growing number of customers value speed and convenience as much as product price and quality.

However, having inadequate infrastructure or lack of warehouse readiness can hinder effectiveness when trying to establish dedicated warehouses for e-commerce activities. In some cases, warehouse capacity has failed to keep pace with economic growth, driving e-commerce providers to look into short term, on-demand warehouse solutions.

As the e-commerce uptrend continues, some 3PLs are refining their fulfillment processes and working to create scalable solutions that offer food manufactures the services they need.

Kirk Hoover, Sr. Director of Business Development at Americold, said current customers are asking about Americold’s interest in providing e-commerce logistics and solutions. “We understand that e-commerce adds a completely new dimension to the services 3PL’s will need to provide, fortunately, we're already there with many of our customers. We're supporting darkstore fulfillment and direct-to-consumer shipping. We recognize the trends as do our customers and Americold is adapting.

With e-commerce giant, Amazon, invading the cool space, the Whole Foods acquisition is influencing the entire food industry.

It’s evident that in order to thrive in this growing e-commerce market, you’ll need to be nimble, have easily accessible storage facilities and logistics experts, adequate infrastructure and warehouse capacity, and be able to meet increased volume demands in shorter amounts of time while also providing specific material handling services for perishable items.

We’re in a new food retail market, and if companies want to thrive during this e-commerce boom, it may be time to rethink their current operating model.

Make no mistake, e-commerce is a part of our industries new operating reality and is quickly heating up cold-chain logistics.

 

Topics: e-commerce, digital shopping, dedicated warehouses for e-commerce, online purchasing

Life and Times in the Temperature-Controlled Storage and Distribution Industry

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