E-Commerce, the Economy, and Our On Demand World
From shopping trends to manufacturing, real estate, and supply chain, e-commerce has created an on-demand world.
A movie, pizza, pair of shoes, microwave…your new material handling system. All these things and anything else you can think of are now available with a few keystrokes and a click of a mouse. We no longer must go to a store to shop as the Internet has everything we could want including the best selection, consumer product ratings, an opportunity to compare prices (without feeling guilty), free shipping, no worry returns, and even same day delivery. Not only can we shop from our own home or office, but we can get that immediate satisfaction from it being “on demand”.
How many of us can remember a friend’s phone number these days? But we all have our credit card number, expiration date and security code memorized to complete an online order. Technology provides us with the ability to find what we want, when we want it and exactly how we want it. We can shop on our computers, tablets and smartphones anywhere while we are on the go. These devices even remember what products we like, what we have viewed in the past and provide ads to remind us of these items if we looked but have not purchased yet.
E-Commerce and the Economy
All of this availability is driving many people to more spontaneous impulse buying. In fact, within five years, one-fifth of the $3.6 trillion retail market in the U.S. will come from online sales. All this buying is not only driving the retail market, but also growing other businesses. As we purchase one company’s products, we also support an entire network of ancillary businesses in the process.
Think of a pair of sneakers…
Who are you buying them from?
The manufacturer directly? Probably not. You are most likely shopping from the website of a retail store like Dick’s Sporting Goods or an Internet marketplace.
What is on these sites?
More ads for similar or adjacent products like socks that “other customers have also viewed” or products you might have shopped previously.
How are you paying for these sneakers?
A credit card for a bank which might provide “points” for purchases? Now you can use these “points” for travel or to buy more things.
How are you going to get the sneakers you ordered?
Do you want them to ship standard ground (included free with order but takes 7-10 days), two-day or next-day air?
And these are just the top of the list of businesses you are supporting financially through your seemingly simple purchase. Behind the scenes, e-commerce is also impacting other markets.
E-Commerce and the Industrial Market
Think about all the different companies behind each of the services above. The greater the demand for products and their immediate shipment, the greater the volume of available inventory required. With increased demand, global manufacturers must make more products. They must have them on a shelf ready to ship the moment you press that “buy now” button; and most recently, they must have faster shipping options.
This has led to a change in many companies overall supply chain strategy. Instead of a single distribution center, many distribution hubs must be available to ensure consumers in any location have access to quick, or even same-day, shipping. This has greatly impacted commercial real estate as space for new distribution centers is in high demand. This has left available commercial space limited and priced at a premium.
Beyond where to locate a future distribution center is what to put in it to meet demands. Even as companies move closer to consumers, to truly reduce shipping times, they must also have a system for handling incoming orders and getting them out the door. This often requires automation.
Inside the four walls of distribution and manufacturing facilities, everything from order picking to packing is being optimized. Just a few examples include:
- Custom box erectors – build custom-sized boxes to fit orders, reducing waste and shipping costs
- Goods to person technologies – offer fast, accurate order picking in which goods are brought directly to operators.
- Robotic document insertion – greatly increases system uptime over conventional document inserters and offers scalability
- Warehouse execution systems – allow highly automated facilities to coordinate labor and equipment for optimal productivity
So not only has e-commerce led to a growth in retail, but also manufacturing, real estate, supply chain and logistics. And all this growth is dependent upon the consumer getting what they want and now!
The growth of e-commerce has impacted the economy across the board and will only continue to change and affect the retail industry. If your company is struggling to keep up with the growing demand, our team can design custom solutions for order picking, sortation, packing and shipping applications along with the software and controls required to integrate it into your warehouse.
Providing customers with fast, accurate orders will be the only way to keep up with our “on demand” world.
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