How customer demands are reshaping the logistics industry

insights  July 16, 2019

With the worldwide growth of ecommerce and the increasing competition within this sector, the online shopping landscape is shifting to a more dynamic environment. The consumer has a choice of numerous providers of the same product or service. This can result in consumers becoming more demanding. Etailers are therefore constantly looking for ways to satisfy customers and outsmart the competition. Increasing expectations and wishes of modern consumers, with regards to speed and options make this more difficult than ever. Because the logistics sector is strongly influenced by consumers, this sector is forced to adapt to the increased expectations and wishes.

There are 4 factors that are reshaping customer demands in the logistics industry. These are: speed, options, sustainability and real-time information.

Because the logistics sector is strongly influenced by consumers, this sector is forced to adapt to the increased expectations and wishes

Speed
The consumer used to wait patiently and without complaint, for their parcel for days. Nowadays delivery must take place as quickly as possible. The increasing consumer expectations therefore warrant faster delivery services. For example, more and more online stores offer next-day or even same-day delivery. This is of course only possible if the product is purchased in one’s own country, and even then, these speed expectations often cause additional costs for etailers. For cross-border ecommerce, consumers are willing to wait a little longer.

In addition, it appears that consumers are price sensitive in this regard. They expect faster home delivery but are not willing to pay considerably more for this. Only 2% said they would pay sufficiently more to make instant delivery viable.

Options

In addition to the fact that consumers want to receive their ordered products faster and faster, they also want to have a choice of multiple delivery options. To stand out in the competitive world of e-commerce, online retailers often offer different delivery and retrieval options. These are often dictated by the type of delivery (express or standard), the delivery location and the delivery time. Consumers value flexibility, and with offering different delivery options, online stores can create consumer satisfaction.

Sustainability
Sustainability is an increasingly important theme in all sectors. It is therefore not surprising that consumers are also making more and more demands in this area. The logistics sector responds to this by focusing on alternative delivery vehicles, such as green gas cars, electric vehicles and bicycles. Through the deployment of electric vehicles in delivery, the emissions will be significantly reduced. This will benefit the air quality and climate. Also, electric vehicles emit less noise. Electric bicycles have an additional advantage because they can move easily across cities without causing or being affected by, congestion.

In addition, packages in some cities are today delivered by means of autonomous vehicles. These autonomous vehicles include autonomous ground vehicles with parcel lockers and drones. Depending on consumer confidence in these alternative delivery vehicles and the approval of regulatory authorities, it will be determined at what pace changes will be made in this area. Research from McKinsey shows that the expectations are that these technological concepts can become reality within the next 10 years. It is also predicted that autonomous vehicles will deliver 80% of parcels in the near future[1].

Real-time information
Due to technological developments in logistics, the demands of consumers have also been adjusted upwards in this area. Consumers expect that they always and in every part of the delivery process know where their package is located and what its status is. Offering real-time insights in the status of the package is therefore becoming more common.

[1] McKinsey&CCompany, Parcel delivery: the future of last mile.
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