A lot has been made about the in-store shopping trends we are seeing in retail. What has largely been overlooked are the shipping trends shaping the retail landscape this year. Consumers continue to expect faster deliveries for free which is putting enormous stress on the last mile for retailers.
Instead of charging more for delivery or limiting the scope and speed of on-demand delivery, retailers are focusing on rethinking last mile delivery assets so that it benefits both the retailer and the consumer. Here are 7 retail shipping trends to keep an eye on in 2018.
7 Retail Shipping Trends to Watch
Venture capital has been pouring into logistics over the last few years. Amazon’s on-demand delivery has put a ton of pressure on retailers across the board to provide quicker and more cost effective deliveries. Even greater than the move toward more experiential shopping, we expect changes in shipping and delivery models to dominate retail in 2018.
#1: Big Data leads to Better Delivery Options
Big data’s role in shipping and deliveries comes down to aggregating the right kind of data to meet customer expectations. When retailers better know their customers they are better able to tailor their delivery options to meet that demand. Social media, mobile apps, and online ordering services will improve the type of data captured in order to provide better service.
#2: AI Streamlines Warehousing and Distribution Channels
Artificial intelligence is already in use at many warehouses across the country. We expect more regional and local retailers to harness the power of AI to streamline their warehousing and distribution channels to both provide greater customer service and to cut the costs associated with their supply channels.
#3: New Ways of Delivering Product to Customers
Mobile ordering apps are on the rise. You can order Wendy’s for example and a person moonlighting as an Uber and delivery driver brings it to you. Expect more retailers to experiment with new ways of delivering product to customers by creating their own delivery apps.
#4: IoT and On-Demand Delivery Reduces Inventory Costs
Believe it or not, a recent survey found that AI ranked at the bottom of retailers’ highest priorities at 20%. The IoT only ranked near 35%. Considering how crucial these technologies are to revamping shipping and delivery, we expect to see those numbers to grow over the coming year as competition from other retailers beginning to harness IoT and AI tech to improve customer loyalty increases.
#5: More Local Retailers Experiment with 3PL Delivery Options
USPS is one avenue for delivering product locally but in order to meet current demand for speedier shipping and delivery, we expect to see more local retailers experimenting with third party logistics (3PL). Particularly for same day deliveries and delivery of perishable goods, delivery options will include a combination of independent delivery companies, 3PLs, and Uber or Lyft drivers.
#6: BOPIS Challenges Online Retailers
Adding to the pressure on warehousing and distribution is the move toward buy-online-pay-in-store (BOPIS) options for retailers big and small. Warehousing and fulfillment centers closer to urban centers are required to manage BOPIS deliveries which will impact the local and regional industrial CRE market.
#7: Robots and Automation Continue to Take Over Fulfillment Centers
Automation and robots that can sort, pick, and pack product make up 20% of Amazon’s supply chain, giving them a leg up on cost and efficiency. Now retailers everywhere are taking cues and investing in these technologies to improve fulfillment center operations.