In the year 2000, speculation in web based companies and internet technology firms reached a state of frenzy. People were talking about the incredible rise of the NASDAQ, their foray into day trading and the never before
E-commerce has reached the critical mass speculators envisioned in the year 2000.
According to the US Department of Commerce, in 2011 retail sales grew 16.1% to
seen opportunity presented by the World Wide
Web. In board rooms across the country retail-
ers and suppliers were scrambling to develop
e-commerce strategies, evaluating the role of bricks and mortar operations in the new
e-commerce marketplace and trying to figure out how to meet the evolving needs of their customers. Very few people actually knew what they were doing and nobody wanted to be left out of the internet boom. In short, it was a crazy time; speculation was the norm in this Ready-Fire-Aim world. Then the internet bubble burst sending thousands of paper millionaires along with established firms into bankruptcy.
Flash forward to 2012. The speed of global technological change has escalated exponentially and the mobile World Wide Web is impacting our lives in amazing and unfore- seen ways. Retailers now have internet experts on stafl well versed in various technological applications. These technology experts are working in teams with logistics professionals to develop multi-channel supply chain strategies designed to meet both business and retail customer needs. Firms are fine tuning sales and marketing strategies with a Ready-Aim-Fire approach based on internet data mining and market research.
$194.3 billion. Forester Research puts
e-commerce sales currently at 6% of the US retail market growing at 10% per year and forecast to reach $279 billion by 2015. At a recent Journal of Commerce logistics confer- ence, IMS Worldwide President Curtis Spencer cited Dematic figures stating global retail sales are expected to expand to roughly 30% by 2025 translating to $2.7 trillion annually.
When you then consider the unparal- leled momentum and critical mass occurring with mobile e-commerce, there is no doubt a retailing revolution is underway! You can’t help but to wonder, what will the retail landscape look like in 2025 when 30% of total sales glob- ally are done via e-commerce? Which tradi- tional retailers will fade into the sunset and who will survive? How will all of this eflect the retail supply chain?
Recently, representatives from the National Center for Supply Chain Technology Education (SCTE) visited logistics operations run by major retailers, consumer goods suppli- ers, third party logistics firms and small package shippers. Interviews with logistics experts were conducted and the facilities they manage were toured. These meetings, interviews and tours were part of a broader research eflort designed to investigate how logistics profes- sionals were managing operations in the face of
double digit e-commerce growth and how the e-tailing revolution will impact the workforce of tomorrow.
One fact became apparent as a result of this research: Most firms are using logistics technologies in increasingly more comprehen- sive ways to meet ever evolving customer requirements. Everyone interviewed agreed the growth of e-commerce was the main factor driving this rapid technology investment forward.
Miles of conveyor systems, high speed sortation equipment, tilt trays, sensors, paper- less shipping and receiving systems, RF equip- ment and on board computers were common. The most advanced facilities contained guided AGV cranes and state of the art robotics.
Orchestrating the commands of this high tech equipment were warehouse management systems programmed with state of the art software making the split second decisions necessary to e‰ciently meet deadlines.
These logistics experts spoke about traditional retail growth varying from 1%-5% with e-commerce division growth of 20%-78%.
Smaller, more frequent shipments were the norm. Firms handling small packages discussed huge capital investments in new facilities, equipment and advanced technology.
All of the facilities toured were very clean and stafl members were smartly dressed and educated. The "Supply Chain Technicians" responsible for installing, operating, maintaining and supporting these software and hardware systems were highly trained, well paid and in demand. The 21st Century warehouse of today is much diflerent than your father’s warehouse of yesterday.
Multi-channel fulfillment is the industry term now used to describe critical logistics strategies used by many businesses to meet the evolving requirements of the retail land- scape. On any given day, orders are sent to various distribution centers, to retail locations for shelf fulfillment or "Click and Collect" orders, to e-commerce wholesalers for their existing
ommerce orders, to overseas clients as well as direct to residential homes. It's enough to make any logistics manager go nuts and it's all done with highly sophisticated software,
advanced material handling equipment and well trained people.
Three basic types of e-commerce firms with direct to customer e-tailing strategies emerged from this research.
Pure play e-commerce retails with no retail outlets serving customers directly.
Retailers who have adopted their own e-tailing strategy with either dedicated
e-commerce facilities or fulfillment done via their traditional logistics networks or retail outlets.
Consumer goods suppliers who are servicing retailers by shipping retailer branded orders direct to customers, skipping the retail supply chain. In addition, these same suppliers are shipping e-commerce orders to their own residential clients and to internet based wholesalers.
E-commerce and the e-tailing revolution is driving an undocumented workforce change where traditional retail cashiers, stocking clerks and store clerks jobs are slowly disappearing being replaced by highly trained warehouse workers. Retail store formats are shrinking. “Touch and feel” stores with product education and on-site e-commerce ordering are a newer concept. In major metropolitan areas, retailers are experimenting with same day order deliv- ery.
Click and Collect pick up locations are emerging as a retail concept. Retailers are revamping their store formats to handle
e-commerce orders in the back room. Smaller mom and pop retailers are closing their store fronts and moving on line oflerings broader selections and customization. Amazon.com plans to open brick and mortar locations for order pick up and customer education focused on their product and service oflerings.One thing is for certain: the retail land- scape is changing in a revolutionary way and will continue to do so in this mobile society. Those speculators were right back in the year 2000; the internet was going to change the world we live in. They were just a little ahead of the curve.
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The National Center aspires to increase the number of skilled technicians by serving as the national leader for supply chain automation education.
This Center is sponsored by the National Science Foundation’s Advanced Technological Education Program under Award No. 1601452. Any opinions, findings, conclusions or recommendations presented on our social media platforms are only those of the presenter grantee/researcher, author, or agency employee and do not necessarily reflect the views of the National Science Foundation.