E-commerce is one of the only sectors who took advantage of the Covid-19. According to the United Nations Conference on Trade and Development (UNCTAD), the sector saw a rise in all retail sales, from 16 per cent to 19 per cent in 2020.
The rapid growth the sector has experienced has, however, exposed the lack of reliability of the Supply Chains.
A dazzling growth
“Businesses and consumers who were able to ‘’go digital‘’ have helped mitigate the economic downturn caused by the pandemic,” says UNCTAD Acting Secretary-General Isabelle Durant.
Many consumers have turned to online shopping in order to satisfy their desires. As a result, the value of global sales increased by 860 billion dollars as shown in this graph provided by Infomeo consultants.
Global Retail E-commerce Sales ( USD Trillions, % Change YOY )
However, e-operators’ Supply Chains have been strongly impacted by this growth in consumption.
Supply Chains in agony …
According to Pitney Bowes, 131 billion parcels were distributed worldwide. So many orders that have to be fulfilled and which involve several trips around the globe.
According to the graph above, the sharp drop in the delivery times index reflects surging demand, widespread supply constraints, or even both. In fact, numerous delays in deliveries were encountered due to disruptions in warehouses, sorting centers and transportation.
The pre-established order of logistics has been disrupted. And e-commerce operators had to rethink their strategy and their supply chains in order to cope with the demand.
Among all the challenges, we can mention :
- The need for express delivery, which is becoming increasingly important for consumers.
- An incredibly high number of parcels to ship, delivery partners like the French Colissimo, have recorded a 50% increase in D+1 deliveries after May 2020.
- A rapid digitalisation of processes, in order to gain efficiency.
- A diversification of the number of suppliers, to ensure the resilience of their logistics in all circumstances.
Consequently, the expansion of e-commerce has not been without repercussions on logistics. With stronger Supply Chains, companies could have faced these challenges more easily.
… In quest of resilience
According to a study led by McKinsey, E-commerce encountered a 10 years growth in only 3 months ! An emergency transformation that must now pave the way of the development of stronger processes for the sake of an agile, adaptable and more resilient supply chain.
Read our white paper and learn how to move toward a resilient and perennial supply chain >.