Inbound Logistics | January 2022

We’ll see companies follow in the footsteps of Nike and evolve from wholesale to direct-to-consumer ALL INFOR E-COMMERCE

Regional parcel carriers wi l l play a more critical role in e-commerce del ivery . Even the world’s largest parcel carriers struggled with l imited capacity in 2021 under the barrage of e-commerce orders. But one carrier’s chal lenge is another’s opportunity. The use of regional parcel carriers wi l l surge in 2022 . Special izing in short-haul del iveries, these regionals comprise just 6 to 8% of the overal l U.S. parcel del ivery market , but cover more than 85% of the U.S. population. As national carriers continue to experience capacity pressure, regionals provide a strategic rel ief valve to keep products f lowing and avoid delays. But mostly it comes down to costs. FedEx and UPS announced rate increases and an ever-expanding l ist of accessorial surcharges can drive costs even higher. Within their def ined territories, regional carriers often have lower rates on next-day and 2-day del ivery, and they have fewer surcharges. Another plus, because they don’ t have to route parcels through a hub, regionals typical ly offer later pickup times, whi le sti l l meeting overnight del ivery requirements. For these reasons, shippers wi l l rely more on regional parcel carriers in 2022 to diversi fy their carrier base, increase capacity, and lower parcel shipping costs.

e-commerce distribution. The improved margins and inventory controls are just a few reasons why this will continue to be a smart strategic trend.

Dusty Dean Co-founder and CEO, BITCADET

This year, there will be a continuing and rising shift from physical to digital retail. In the next 5 years, e-commerce and brand sales will be 30% of all retail sales. Brands like Nike, whose digital sales represent 21% of total sales, will be a contributing factor to e-commerce increasing from 13.8% to 30% in the next ve years. Wholesale is becoming the new retail to drive revenue and retail is becoming the new wholesale to improve gross margins.

Harry Drajpuch CEO, Amware Fulfillment

Jim Barnes CEO, enVista

With great popularity comes great scalability…challenges. E-commerce continues to explode. This rapid market expansion puts direct-to-consumer brands between a rock and a hard place: The markets for both advertising and logistics services are becoming more fragmented, complex, and expensive than ever. To survive, brands need to seek out a diversied mix of vendors. This means partnering with brick-and-mortar chains and emerging marketplaces in advertising. In logistics, this will be dened by multicarrier portfolios and shipping technologies. Ultra-fast delivery grabs headlines in dense urban areas, but housing markets in less populated regions and secondary metros have seen the greatest growth—meaning many of the most afuent consumers now live in areas that are the most expensive to deliver to. To lower the cost of delivery, digital brands will either need to sacrice speed or pass shipping costs onto consumers. And because the atoms of physical logistics don’t scale as easily as the bits of digital advertising, 2022 will be a year of consolidation and partnerships among logistics vendors to try and achieve economies of scale.

Strong growth across e-commerce tech and service providers throughout the pandemic indicates that conventional sellers are leaning harder on e-commerce

to manage unpredictable conditions. Daily consumer

spending online is outstanding, and I’m condent the e-commerce industry will keep lling the gaps of physical retail during COVID.

There is nothing more important for sellers right now than having real-time visibility into the product pipeline, and then being able to communicate that information to consumers. Retailers are looking for solutions to help manage inventory problems and improve specialized customer service. Sellers can no longer employ a “set it and forget it” strategy. Resources, content, and strategy must be adjusted constantly, but in every case, clear, real-time data is the antidote to market anxiety. Sellers have to watch their data like a hawk, and be ready to move quickly when conditions shift.

Vijay Ramachandran Vice President, Marketing Strategy + Planning Pitney Bowes Global Ecommerce

Rick Wilson CEO, Miva

144 Inbound Logistics • January 2022