Online retail is booming: online purchases have been rising as a proportion of overall sales in Germany for years. In 2015 alone, around 40 billion euros were spent on online retail; in 2016, this rose to 44 billion. (Source: Statista) – This boom will continue, particularly for online sales of fashion and accessories, consumer electronics, and media. But many other product categories are also tracing the same line. All of this means that the subject of e-commerce is more current than ever. Annual growth rates of 10% or more indicate the enormous potential still untapped in the online retail sector – and not just in Europe. Since the trend for growth in e-commerce will continue into the future, growth predictions for businesses in each industry are currently difficult to make, and many retailers and distribution centres will need to redesign or continually adjust their logistical setup.
Increasing numbers of online orders – as well as the sales fluctuations to which e-commerce is always exposed – present numerous challenges for businesses: their logistics departments must be configured for high speed and ever-shorter delivery times, with significantly more orders on some days of the week than others. Promotional days such as Black Friday create particularly high order and delivery volumes, and periods such as the Christmas season require significant increases in capacity for specific periods of time. Delivery times measured in days are still considered acceptable for some products, but in many more cases it should take just 24 hours. Some distance retailers now even offer same-day delivery in urban areas. For distance retailers, this means it is essential to create particularly flexible, simple and fast logistical processes – and this will also allow them to ship orders at short notice. Online retailers also need to manage a high rate of returns, meaning that they also need to implement an efficient returns management system. Whether omnichannel or multi-channel, both models now integrate classical warehouse storage and distribution with the specific storage and distribution conditions associated with online retail. The further development of innovative, efficient storage and racking systems will play a particularly essential role in the success of this business model. Manual systems such as shelving systems and multi-tier installations offer the required storage flexibility for the growing online retail sector, which means they are in high demand. On the other hand, experienced e-commerce users of a certain size will observe a clear trend towards automation. Today’s storage and distribution systems therefore also often need to factor in the demands of the e-commerce sector. In this context, online retail differs from conventional logistics, in that e-commerce businesses often process items faster and need to manage higher return rates (often using automated processes). Logistics firms need to meet these requirements. Not least in order to keep up with the online shopping boom. The market is extremely diverse and is defined by seasonal fluctuations and trends. For logistics companies, this means that if the customer orders something today, it must be available in the warehouse and it should reach them as quickly as possible. BITO distribution systems massively optimise order and returns logistics, improving online retailers’ competitiveness. They meet the e-commerce sector’s current demands for flexibility, speed and maximum accuracy. As a result, logistics specialists can optimise goods flow and organise returns logistics so that returned products promptly show back up in the system.
- Customers no longer think in terms of sales channels. Constant availability and high quality service are expected both online and in physical branches.
- A high degree of market transparency results in demand for constantly innovating, first class logistical and shipping services.
- Whereas goods have historically been delivered to retailers on pallets, individual packages are now sent directly to end customers instead. Warehouse structures therefore need to be organised and adapted accordingly.
- Product diversity is increasing dramatically, and even sensitive goods such as fresh groceries need to be delivered in top condition.
- Online retailers need to be able to react not just to volatile changes in capacity usage, but also to seasonal fluctuations. In practice, this means that exceptional levels of flexibility are required for storage and picking.
- Fully automated storage and picking systems make sense when processing large numbers of similar items. In this case, it becomes very difficult to react to seasonal fluctuations or constantly changing sizes and numbers of items.
- A sophisticated and highly efficient returns processing system is critical to success in many sectors and can be decisive for a business’ profitability.
- E-commerce businesses need partners who can accompany them as they grow from garage warehouses to giant logistical centres. High scalability contributes significantly to successful growth.
BITO’s focal points for modern storage systems for e-commerce are as follows:
- Special systems exist for multi-channel logistics. Orders and returns can be processed through multiple channels.
- BITO systems enable efficient management of the small to medium-sized types of products that are typically sold online.
- Sectors handling large numbers of items employ systems with minimal error rates. Picking errors need to be avoided as much as possible in e-commerce: they result in lost customers.
- Online retail requires maximum flexibility. BITO systems make this level of flexibility possible for e-commerce businesses, allowing logistics firms to react quickly to changes in item numbers or order volumes and structures.
- BITO systems are modular in structure. This means they are also ideal for fast-growing startups and e-commerce businesses.