Ecommerce trends shaping the supply chain tend to be customer-centric
The retail industry faced a tough year in 2022 as the economy took a turn and customers reduced their spending. Cost of living continues to rise and there will no doubt be additional challenges in 2023. Despite reduced consumer spending, ecommerce has risen year-over year, with non-travel online sales reaching $1.09 trillion last year.
In 2022, the top grossing categories were food, pet, and baby goods ($219 billion), followed by apparel and accessories ($175 billion), and computers and peripherals ($117 billion). Consumer spending on apparel and accessories rose 37% YOY. Video games and accessories purchases rose by 31% YOY while home and garden sales increased by 25%.
Change is on the horizon with online sales and with the start of a new year come new trends to watch. In the fourth quarter of 2022, mobile online sales jumped up by 26% compared to 2021. Sales on a mobile device have now reached 38% of all digital commerce sales. This trend will likely continue, with the increased popularity of shopping through mobile apps.
Online merchants must continually shift to meet shopper demands. New technologies and methods are emerging every year and it’s important to stay in the know. Below are some supply chain trends to watch over the next 12 months:
Integrating the physical and digital commerce worlds
The retail industry’s next phase will allow merchants to meet the service and convenience that shoppers desire. A hybrid omnichannel model that marries the physical and digital world has been emerging. Omnichannel covers all the touchpoints in a customer’s journey by replicating the in-store shopping experience combined with the ease of online shopping. An omnichannel model offers more opportunities for customers to buy the products, especially for D2C brands.
For ecommerce stores that seek to have a physical presence, be sure to consider a few things about your product to ensure its success. Products that do best have compelling properties that perform well in front of the customer. When expanding into the physical space, companies may also find themselves in need of extra warehouse space.
A road map to sustainable supply chain strategy
The focus that Gen Z has on sustainability will soon drive the market and is already playing a big role in the ecommerce industry. Reducing the climate’s footprint will produce new challenges and trends continuously and will test a merchant’s resilience. To meet the demands of the growing digital economy, create a road map of adaptation to new norms. A sustainable business is no small feat, but investing in green practices will lead to long-term payback in customer loyalty, image, and value.
Investment into owned channels to meet consumer demand
Online media advertising has slowly increased in price and offers fewer targeting options. Instead of pouring money into a channel that will offer little return on investment for their audience, merchants are investing in owned channels. Examples of owned channels include a native mobile app, merchandising and optimization of online stores, and email and SMS marketing.
Personalizing the online shopping experience
Reports show that consumers enjoy personalized search results. Optimizing personalization is vital for any brand that wishes to stand out amongst the ecommerce crowd. Artificial intelligence technologies can now analyze past purchases and aggregate data. Previous interactions with products or brands can then be sued to personalize and enhance the user experience as well as boost conversion.
Location-based filtering and big data
Supply chain problems are predicted to continue in 2023, but a perfect equilibrium is always difficult to find. Retailers can double down on areas they can control and work with merchandisers who elevate the customer experience. Offering location-based filtering will put vendors ahead of the rest, with local stores for delivery. Local vertical integration with supply chains and merchants will lend an edge in the new year with additional control over delivery timelines.
Achieve operational efficiency by partnering with a trusted 3PL
Supply chains are at the center stage of corporate strategy and an intentional, analytics-driven approach is key. Traditionally, supply chains were redesigned every few years in response to a specific event, changes in the market, or corporate strategy. With the high pace of change today, this method has become obsolete. Companies must continuously monitor supply chain design and adapt it according to aggregated data, rather than being constantly reactive.
At ITS, we specialize in partnering with companies who are looking at ecommerce outsourcing to grow their operations. We know that fully trusting your 3PL is very important to your company, and your peace of mind. Our ecommerce fulfillment centers, and expert team members are ready to handle all aspects of your fulfillment, with the goal of helping you grow your business. Partner with ITS for all your fulfillment needs today.
New North America warehouse expansion
In 2021, ITS Logistics first expanded into the Midwest with its first location in Indianapolis. The 350,000-square-foot facility was joined by a second 260,000-square-foot distribution center in Q2 2022. The second expansion also added regional trucking operations including dedicated contract services, drayage, line haul, expedited, storage and drop trailers, rapid replenishment fulfillment and transportation, and special projects/warehouse moves.
Coming this year in Q2, a third 700,000-square-foot warehouse will join the ITS Indianapolis campus, totaling more than 1.3 million-square-feet of space. A Dallas-Fort Worth location will join the ITS family later in Q3, with a total of 1.1 million square feet in the Northpoint Development Intermodal Logistics Center. The new Dallas-Forth Worth facility will serve as the first Texas location. When combined with existing operations in Reno, NV and Indianapolis, IN, this network allows ITS to offer distribution and fulfillment services to 95% of the U.S. in less than two days.
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Catch us at RILA
The volatile nature of the retail market has led to an uncertain supply chain environment. Regardless of whether you’re shipping dedicated, spot, expedited cargo, or dealing with complex supply chain issues that make planning difficult, you require solutions that cater to your specific requirements.
At #RILALINK2023, we will be demonstrating our essential solutions for the retail market. Come introduce yourself and let’s explore how we can bring flexibility and confidence to your transportation network.