In the time before lockdown and working from home, TV shopping channels were a very popular way of home shopping for certain demographics. The next iteration of this business model is heading westwards from China and it is called ‘Live Streaming’.
Now streaming video content across the internet is not new and it is possible to stream live video from a number of mobile applications, Facebook, Tik Tok, Instagram live stories, etc. The wave that is moving across from China is e-commerce live streaming and is being leveraged by major brands to present and demonstrate products in an interactive manner, similar to shopping in a physical store.
The growth in China has been huge and is a harbinger of what is likely to happen in other territories. According to the South China Morning Post, in the period of January to June, some 10m live streaming shows occurred, involving around a third of China’s internet users – approximately 310m users. Some early studies have shown that customers viewing in real-time, exhibited a greater propensity to purchase than through conventional advertising. This has been enabled by the almost universal ownership of smartphones that are the ideal platform to support this method of interactive shopping. The ‘buy’ button becomes a compelling attraction for many.
Outside China, a number of the major e-commerce platforms have begun to ramp up their ability to live stream products. Amazon has rolled out ‘Amazon Live’ to primarily demonstrate products but also channel sales throughout and QVC now has ‘Q Anytime’. This is just the start and some commentators think this will be the basis of all retail models over the next few years.
So the question is what, if any, are the implications for logistics operations in the future?
In my view the major implications are;
1. An explosion in the demand for logistics operational performance data.
This is because companies are adapting and transforming their logistics operations and migrating across to cloud services and platforms. These companies are usually operating in partnership with other companies, many of whom are logistics service providers (LSPs). The operational overviews they demand will require direct real-time feeds from partner operations and the sensor enabled assist moving through the logistics chain.
2. Increasing demand for faster delivery times. Flexible networks and VCS.
As the significant growth in online buying during the pandemic has shown, consumers now expect rapid fulfilment and delivery. Indeed, online retail sites will try and use faster delivery as a compelling differentiator, but only if they pay extra. The high cost of last-mile delivery is often ‘baked in’ due to geographical restrictions and operating models. To address the requirement for faster delivery alongside the customer need for flexibility to reroute or replan domestic deliveries on the day, logistics operators will need to develop flexible, data driven networks. As has been shown in China, the psychology around hitting the ‘buy’ button often drives the need for swift delivery satisfaction. This places a huge burden on the retailer to make sure they have a range of delivery options available for customers.
The retailer or LSP may not need to own the assets operating in their networks, but they will need to direct them. VCS or ‘Virtual Carrier Systems’ are software solutions that will be designed to manage a large number of transport companies, both SME’s and larger fleet operators. The VCS will be able to select carriers based on performance and service levels, operating margin and reliability. The more the system is used, the more data that is accumulated to improve the algorithms managing the carrier selection.
3. Increasing demand for local ‘touch points’ capable of click and collect and returns.
Ti has frequently reported on the growing demand for local pickup and delivery options for e-commerce customers. This trend is still increasing and as the retail landscape is changing, this requirement is unlikely to change. It is likely that some new innovations will appear as knowledgeable entrepreneurs exploit the large amount of vacant office and retail premises triggered by the mass moves towards working from home.
4. Increasing demand for streamlined cross border transit with more products held ‘under bond’ for rapid re-export.
The reshaping of the global trade flows for manufactured goods will require significant changes in the operating models of global logistics companies. The influences of sustainability, trade sanctions and new manufacturing processes, will be profound. Many of these changes may be at short notice. It will require the ability to redesign and implement complete cross border logistics operations ‘on-demand’. This may sound fantastical, due to the nature of established operations, but much of the past nine months has also been unimaginable.
The technology exists to support agile and adaptable logistics operations, but many of the global players are still handicapped by the huge amounts of data held in legacy systems. They can only hope their inherent scale will be enough to buy time to transition off of those applications. But they may discover that the fickle nature of customers and the ability of new entrants leveraging technology that can scale, will present a formidable challenge. Especially if the new entrants are well funded.
Source: Transport Intelligence, October 22, 2020
Author: Ken Lyon