The COVID-19 pandemic has changed the nature of my job quite a bit. The pandemic hit just as we were heading into our busy conference season. So instead of traveling across the country attending conferences, networking with peers, and in most cases, enjoying a bit of sunshine either by the pool or on the beach, I was attending these events from the friendly confines of my home office. The good news is that the virtual nature of these shows removed one of the biggest challenges of attending a conference: deciding which sessions to attend. Instead, I have been able to watch and, in some cases, re-watch a presentation to glean more insights than I may have been able to do at an in-person event. And this year’s Descartes Evolution was no exception. The conference was last month, and I was actually on vacation during part of it. But I have since been able to go back and re-watch some of the key sessions. The theme of the event was spot-on as we all try to adjust to the new normal: Emerging Stronger.
During his keynote speech, Descartes CEO Ed Ryan discussed the foundation that is Descartes: the Global Logistics Network. The network connects carriers (ocean, air, ground, and rail transportation companies), shippers (retailers, manufacturers & distributors, and service providers), governments (customs agencies, regulatory bodies, and other agencies & associations), and intermediaries (customs brokers, freight brokers, forwarders/3PLs/NVOCCs, and payment agencies). Currently, Descartes has 20,000+ customers worldwide on the network, which processes 18.6+ billion transactions per year, and has grown 21 percent. On top of the network are Descartes’ value-added services: Routing, Mobile, & Telematics, Transportation Management, Customs and Regulatory Compliance, Broker & Forwarder Enterprise Systems, and Global Trade Content. These solutions all tie into the larger network.
In his keynote, Mr. Ryan touched upon the impact of COVID-19 and what we have learned as an industry in 2020. The coronavirus pandemic has sped up the digital transformation of supply chains around the world. Of the solution areas highlighted above, Mr. Ryan said that Descartes’ E-Commerce, Shipping, & Fulfillment is the fastest growing. This solution enables e-commerce providers to manage their TMS and WMS while interconnecting back office systems. Given the e-commerce boom, it is not surprising that this is the fastest growing product segment.
Mr. Ryan highlighted five things that 2020 has taught us so far. First is the importance of managing a distributed organization. This was never more evident than when the country went into a lockdown and the majority of workers were suddenly working remote full-time. Second, we have seen the death of paper-based processing. For companies that were still relying on paper-based processes because it was cheaper than implementing a new solution, the pandemic has made the decision for them and it is no longer an option. Third, there is a need to address the variability in demand. Capacity and demand fluctuation have upended global supply chains; companies need to be able to react quickly to these changing demands. Fourth, there has been a pivot in business models. These pivots can be seen everywhere, in the way companies collaborate to the way in which they get their products to consumers. These pivots have changed how companies operate. And fifth, there is an increased importance of visibility. Consumers and businesses alike need more transparency on where an order is and need to know when and how they will receive it.
Major E-commerce Trends
There were two sessions that really stuck out to me regarding the growing importance of e-commerce and how companies are emerging stronger. The first was Descartes End-to-End Vision for E-Commerce which featured Johannes Panzer, Head of Industry Solutions for Ecommerce at Descartes. In this session Mr. Panzer highlighted a number of key trends across three categories that are impacting e-commerce operations and fulfillment.
The second session was Home Delivery Best Practices presented by Chris Jones, Executive Vice President at Descartes. I will give a further recap of that see that will be part of my next article.
It is no secret that COVID-19 has spurred e-commerce growth. In his session, Mr. Panzer made the point that COVID-19 is causing volume uplift as more people are buying online. And as e-commerce has continued to grow, these changing shopping behaviors are likely to remain in place once brick and mortar stores are back to business as usual. There are whole customer segments that have traditionally avoided e-commerce but are now seeing the convenience of it.
Mr. Panzer highlighted several category trends that the pandemic has affected. For example, travel, events, and hotel stays are all down as a result of COVID-19. This has direct ties to a 77 percent decline in luggage sales, 63 percent decline in bridal clothing, and a 39 percent decline in camping equipment. Although, camping equipment is probably back on the rise as more and more campsites have opened up. On the other end of the spectrum, disposable glove sales have increased 670 percent, cough and cold products have increased 535 percent, and fitness equipment has increased 170 percent. From what I have seen there has also been a rush on bicycles and inflatable pools. The results of these fluctuations has been a 50+ percent increase in shipment volume after the lockdowns were lifted.
Mr. Panzer highlighted two main industry trends as part of the global shift in e-commerce. The first is the fast-scaling of operations. Fast-scaling means that companies are able to handle a growing amount of work or a change in operations in a fast and efficient manner. The example that Mr. Panzer used in his presentation is the use of flash sales. The proliferation of social influencers and content can create a flash sale on any given item on any given day. A flash sale can effectively mean that retailers need to be able to treat any day like a peak season day, knowing that demand for a product is likely to soar. This means the retailer needs to be able to fulfill orders more quickly and efficiently while meeting the surge.
The second industry trend highlighted in this session is alternative sourcing and fulfillment strategies. As supply chains became disrupted due to COVID-19, the risk increased for those companies that relied on single-country sourcing. Now, these companies are diversifying how they source and fulfill orders. When factories in China shut down just after Chinese New Year, many companies were left in a difficult position of trying to figure out the best way to get the products they needed. Diversified sourcing strategies were the answer and have led to a change in the way these companies currently and will operate in the future.
The third category of trends that Mr. Panzer highlighted are the technology trends. The first trend that was discussed is APIs, and the automation of data exchange. Most e-commerce platforms already have APIs in place and now more carriers are moving in that direction. There has also been better data exchange through automation.
The second trend is shipment tracking. Visibility tools have become one of the most sought-after solutions in the market. Customers have an expectation of accurate ETAs and improved visibility into where shipments are. Many companies are integrating external data streams to improve ETAs. Bust visibility goes beyond just the live tracking of a package. Now, more and more companies are looking for more transparency in their supply chains, especially visibility into sourcing. This visibility can help brands make better decisions as well as more accurate forecasts.
The final technology trend that Mr. Panzer highlighted is data analytics. There is so much data being collected during every customer interaction and transaction. That data can be leveraged to create greater insights. The use of data analytics is more about connecting different sources and identifying the right insights to drive better decisions.
The final piece of Mr. Palzer’s presentation was on the customer experience, and how retailers need to provide a remarkable customer experience through fulfillment. There are five stages of the customer experience that retailers can impact:
- Check-out Process: retailers need to make sure that customers have access to accurate real-time inventory so they can get the item that they want.
- Order Confirmation: retailers need to ensure that all customer information is correct and that an accurate and acceptable shipment and delivery date is available.
- Shipment Tracking: real-time notifications must be given to enable the customer to track the order; retailers can also give customers access to next-level processes, such as letting the customer know when a delivery is a few stops away and ask where they want the item to be delivered.
- Point of Delivery: the retailer needs to make sure the order arrives when it is scheduled and it must not be damaged.
- Returns: there needs to be seamless and fast processing for returns; retailers can provide a return label in the initial shipment and must process returns and refunds quickly.
While this year’s Descartes Evolution conference was certainly a change of pace from attending in person, the message was clear: Descartes’ customers are emerging stronger as we move towards the new normal of a COVID-19 world. Ed Ryan highlighted the impact COVID-19 has had on the industry and what we have learned in 2020. The coronavirus pandemic has pushed e-commerce to the forefront of the global economy, and fulfillment is a driving force for a positive customer experience. Johannes Panzer showcased the end-to-end e-commerce vision for Descartes. This vision is centered around a retailer’s ability to provide a remarkable customer experience through fulfillment. Sourcing and fulfillment are at the heart of e-commerce, and Descartes is positioning itself to ensure that its customers have all the tools they need to succeed and truly emerge stronger.