Online shop logistics: Efficient delivery to private customers

Bastian Späth, CEO/Vorstand EIKONA AG
A package in the hands of two people.

“The customer is always right”, says an old proverb – and that is exactly how he would like to be treated. Our consumer behaviour has changed drastically over the past few years. “Order today, get it by tomorrow” is the motto of some online shops – and it is precisely this express availability that we have become accustomed to.


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In this article, we show why private customer business is still profitable for companies in logistics and how smart IT solutions help to optimise processes and synchronise them with B2B business.

Profitable sector: e-commerce trade still booming

It is true that the turnover generated by online business in Germany in 2022, at around 90.4 billion euros, has fallen by almost nine percent compared to the previous year. In 2010, however, e-commerce turnover in Germany was still at around 18.3 billion euros – so we can still call it a gigantic upswing.

Consumer search behaviour has changed over the years. The targeted search for very specific products has been replaced by digital browsing: customers discover products on social media while scrolling, which they then inform themselves about; they stroll virtually through online marketplaces and now order not only niche products that are rarely available in retail, but also goods that are consumed on a daily basis, such as perfume or clothing. The competition here is immense: online shops have to meet the high expectations of their customers and convince them with a pleasant shopping experience, transparent conditions, flexible return options and short delivery times.

Cooperation between online shops and logistics service providers: digitalisation is the key

What the customer does not see when ordering from an online shop: of course, it is not only the e-commerce retailer fulfilling the order, but the service promise is largely realised by service providers from transport and logistics. For this cooperation to work and for one cog to fit seamlessly into the next, IT solutions and digital order management are a must.

Fulfilment software is the magic word here that simplifies marketplace logistics. Online shops thus receive support throughout the entire order processing process. This includes intelligent storage, picking and packing, but above all shipping and returns management. By means of interfaces, providers of different services are interconnected, and logistics service providers are integrated into the systems.

Private customers want to know: provide information at an early stage

Who doesn’t know it from their own experience: the search for the right sofa has dragged on for days, now the desired model is finally in the shopping basket, all that is missing is the check-out. But then suddenly you see this unpleasant message: “The delivery time is currently between 20 and 22 weeks”. Whether it’s particularly long delivery times or hidden costs for transport – no one appreciates it when relevant information is only transmitted very shortly before the contract is concluded (or even worse: after the check-out). If binding data is available early on, then shopping cart abandonment can be avoided, which keeps the shop’s conversion rate high.

Online retailers and logistics providers must work together perfectly to satisfy customers in terms of fulfilment. Even before the order process is completed, the shop operator must inform the customer about delivery times, transport costs and any express delivery options. The automatic exchange of data with all contractual partners along the supply chain is crucial for this and requires a link via real-time interfaces (so-called application programming interfaces, APIs for short).

How long will it take? Delivery times are the decisive criterion

One of the most decisive criteria that can make the difference between buying and not buying: the delivery time. Patience may be a virtue, but we are used to being able to realise purchase wishes at short notice and would like to have the goods in our hands after as short a time as possible. A short delivery time and reliable delivery are sometimes more important than offering the product at the lowest price. Many customers are even prepared to pay a surcharge for same-day or next-day delivery, which some shipping service providers offer.

Goods that have been ordered for a specific occasion, be it for a summer holiday or as a gift, lose their value if they are not delivered on time. So, it’s a matter of balancing realistic and transparent information on delivery time with the shortest possible transport time. At peak times, i.e., at seasonal high points such as Christmas, companies in retail and logistics have to make a special effort to achieve this. Precisely calculated stock levels, accurate data collection and evaluation as well as highly efficient use of resources are the be-all and end-all here.

Always up to date: shipment tracking with real-time data is a must in logistics

Even after the contract has been signed (i.e., when it comes to transport), the pace of information exchange must be kept high. Whenever the package takes another step along the supply chain (and especially when something does not go according to plan, for example, when there are problems with the delivery), all partners need to know so that complaints can be avoided.

Missed delivery time slots are often a reason for returning the product – in which we in Germany are European champions anyway. That's why e-commerce providers reserve the necessary transport slots as soon as the order is received. Real-time interfaces make this direct connection possible.

How the right software supports e-commerce logistics

Private customers do not have the experience with logistical processes that logisticians in B2B business are used to. For example, they do not calculate with the usual time cycles in transport structures, but want shorter shipping options or, in the case of longer delivery times, delivery dates that can be planned as conveniently as possible. Alternative storage locations for parcels and co., which increase the organisational effort, are also very popular. By using modern IT solutions, forwarding companies can nevertheless develop a process structure that makes private customer business attractive.

The following coordination and information tasks can be outsourced to software, which works in an efficient and resource-saving way:

 

  • Notifications: Here, an application can inform about the upcoming delivery either by e-mail or SMS. In addition, the notification software can be integrated directly into the shop system to offer time slots during the checkout process.
  • Voice computer: Delivery appointments can be made automatically via landline telephones, and driver alerts are time-controlled or position-based. This removes any language barrier and relieves the delivery staff enormously.
  • Data reconciliation: An interface automatically transmits recipient and consignment data to all parties involved.
  • Price calculation: A software calculates the distance-dependent transport prices and also includes optional value-added services.
  • Order tracking: Estimated Times of Arrival (ETA) are calculated, status updates are transmitted in real time and ongoing transports are tracked via Track and Trace.
  • Document management: All documents essential for transport, such as invoices, delivery notes or information on delivery dates, can be retrieved digitally and are reliably archived.

Conclusion

Online shop logistics: how to make private customer business profitable

Many logistics service providers understandably respect working with e-commerce retailers. After all, private customers are quite demanding as recipients when it comes to transport processes, delivery times and possible additional services. This makes the coordination and control of these processes more demanding, but by no means impossible. With the right IT infrastructure, all planning processes can be automated, while integration via APIs ensures that freight forwarders, online retailers and all other parties involved along the supply chain are in constant exchange – this makes order fulfilment much easier.

A digital process chain that transmits information in real time improves general communication, avoids time-consuming queries or searches for recipient data and creates overall transparency about the delivery status. Ultimately, it is not only the private customer sub-sector that benefits from this linking of the individual sub-processes, but the entire standard business of the freight forwarder – a win-win situation, so to speak!


Bastian Späth
Bastian Späth
CEO / Vorstand

Als Diplom-Informatiker kennt sich Bastian Späth mit der Entwicklung von IT-Lösungen fachlich von der Pieke auf aus. Anforderungen erfassen, Ideen finden, Konzepte entwickeln, Projekte aufsetzen und sicher ins Ziel steuern – seit mehr als 15 Jahren täglich gelebte Praxis für den Unterfranken.


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