The trend in the last decade has been the emergence and consolidation of large global eCommerce platforms with millions of users connecting sellers with buyers. The growth of Apple, Facebook, Google, Microsoft, Alibaba, Baidu and Tencent made them essential to the daily lives of digital platform users. These large corporations offer free access, social platforms where people connect, and almost unlimited content when it comes to information or entertainment. Its irruption in our lives has modified the way we relate to technology, making it an essential aspect of our habits. Randall Castillo Ortega, an international trade and logistics expert from Costa Rica, discusses some of the social and commercial trends coming to the logistics ecosystem in 2022.
Technology has changed our consumption habits, increasing security in transactions and cutting the time that a purchase consumes us. Year after year, global eCommerce is constantly increasing by 20%, reaching a volume of $4.21 billion in 2020, and with estimates that it could reach $4.92 billion in 2021. The wide offer, competitive prices, the greater security and convenience of online shopping push retail sales at a rapid pace.
Technology and the pandemic have revolutionized the logistics sector in the last decade, probably more than in the last 100 years. “By 2022, both eCommerce stores and the number of logistics solution providers around the world are expected to continue to grow,” asserts Castillo. It is that technology has broken down many barriers to entry to the sector, and eCommerce has multiplied the demand to infinity. The trend is that users, in addition to touring local businesses, look for online alternatives. One thing is certain: the world of logistics is entering a decade of profound transformation.
Task automation, the insertion of centennials into the workforce, and the COVID-19 pandemic are profoundly transforming the logistics industry. Regarding the automation of tasks, the complement of human tasks with robots helps to drastically reduce occupational accidents, allow to operate heavy loads more easily and allow an increase in productivity. The profile of employees can also change, since by not requiring so much force, the number of people who can do work in warehouses or logistics tasks is expanded.
Centennials come with new skills to incorporate into the market: being digital natives, many have programming knowledge or advanced management of computer tools. Their face sometimes also makes them a disruptive element for tasks that are always carried out with the same routine, facilitating changes in times when the activity is going through a transformation process. The pandemic, on the other hand, hastened changes that might otherwise have taken up to a decade to adopt.
In the near future, employee training will be central for all companies in the field that want to catch up with the technological advances of the industry. Walmart recently invested $2 billion in employee training programs, including technology and soft skills such as leadership or teamwork. Amazon plans to incorporate advanced technology into its supply chain, while also wanting to keep its employees in the process of adapting to a new business model.
Adds Castillo, “The continued growth of eCommerce, and the need to provide cheaper logistics solutions for the delivery of goods, produced an expansion in the number of options for shipments on marketplace platforms and eCommerce stores. Digital solutions that are fully integrated with stores allow to offer an immediate estimate of the cost of shipping.”
Mass customization is the ability of businesses to prepare highly customizable products on a large scale, mass-manufacturing them and enabling delivery in the short term. As the logistics industry digitizes, becoming more accessible to millions of users around the world, product customization is an important differentiating value for customers.
Customization is also possible for the logistics area. In some regions, users can choose greener home delivery alternatives on the payment gateway. Or choose ecological packaging.
The protection of personal information and privacy are key factors for online security. For all intermediaries in the supply chain, the commitment of all stakeholders to maintaining this privacy is of paramount importance.
Finally, blockchain technology promises much more diverse applications than just cryptocurrencies. Its nature of data recording in the face of every event that alters your information offers unparalleled transparency in the supply chain from source to end-user. Each event is recorded throughout the entire life of a product.
The logistics industry is slow to embrace change, but in the last decade, the technological revolution pushed it towards innovation. The expansion of eCommerce and the integration of large companies with small intermediaries through technology favors the sector to be more dynamic. Investment funds have massively turned to financing startups linked to the logistics and distribution sector, which promises to provide solutions to current problems over the next decade. The sustainability of eCommerce expansion will move to a central level, while the world population continues to increase and millions of new users are added to eCommerce platforms every day.