Ecommerce Logistics Solutions for Business Growth

This industry has significantly grown over the last decade. And it keeps developing rapidly. The global freight logistics market size is expected to increase by $319.65 million from 2022 to 2027. This expansion will likely bring new logistics solutions and carriers to the market. 

In this article, Devox Software experts will share their forecast of the future of ecommerce  logistics and showcase the newest logistics trends. In addition, we will answer the most popular questions about logistics solutions for ecommerce and give some advice for growing businesses that enhance their supply chain work. 

For those who want to enter the promising market, we will provide an overview of the core features of ecommerce logistics solutions. And if you’re going to build an app to manage logistics just for your company, this article will also be helpful. With our insights, you will learn what features to implement in such software. Finally, we will share some hints on building a custom logistics app from scratch. 

If you are looking for a reliable vendor to build an ecommerce delivery or inventory management app, Devox software is here to help. We offer a full cycle of custom software development and can provide you with a dedicated team of cross-functional experts.

What is Ecommerce Logistics?

Ecommerce logistics is a process between product manufacturing and delivery into the customer’s hands. It includes several sub-processes, and that’s where it becomes more complicated. We’re just about to discuss these steps in more detail.

E Commerce in Logistics: Step-By-Step Delivery Journey

The logistics journey includes multiple stages. These are inventory management, order placement, packing, shipping, and address delivery to the client. Any of those steps may involve several vendors known as 3PL (Third-Party Logistics) companies. Here is what happens during each phase: 

1. Order Placement

This stage includes different methods of placing an order. Clients can do it online, by phone, or by submitting paper forms in stores. E-commerce implies electronic order placement and fulfillment. It can be a centralized marketplace or a website of a certain supplier where customers browse catalogs, add products to carts, check them out, and choose delivery options.  

2. Inventory Management 

Before orders move to delivery, they spend some time at warehouses. You can use your in-house storage or turn to 3PL vendors. Depending on the chosen warehousing vendor, you may use different ways to organize inventory management. 

Centralized warehouses provide one big storage hub to supply your products directly to the carriers. Meanwhile, decentralized warehouses supply products to several hubs and then deliver them to customers who can choose the closest option available. 

3. Packing

When the order appears in the inventory, it’s time to pack it. For that, your vendor needs enough supply of cardboard boxes, plastic film and paper. 

Certain products may also require special conditions, like delivering glass items or customizing packing with gift cards or bags. 

4. Shipping

Shipping services involve transporting large amounts of products for long distances. Large operators country-wide or international operators are usually responsible for this process. It requires special means of transportation like planes, ships, or freight. That is why you must choose a vendor carefully before outsourcing this service. 

5. Address Delivery 

This step is also called “last-mile delivery” because that is when an order meets a customer. There are several ways to organize this final stage. For example, customers could pick up their order at the chosen retail store or delivery office or have an address delivery instead. 

6. Reverse Logistics

Managing order exchange and return is also a part of the supply chain. Although it is unnecessary, it’s worth having your return policy in place.

The Role Of Third-Party Logistics Companies (3PL)

If logistics is not your core competence, getting into its specifics might be challenging. In this case, you need to learn how to build an in-house logistics team, outsource some of its steps, and optimize business processes. 

The good news is that you don’t have to deal with logistics alone. Nowadays, there are numerous 3PL vendors and ecommerce logistics management apps. 

Now, let’s look at the most compelling advantages of logistics outsourcing. 

Decreasing Cost Per Unit

Operational costs for logistics take 5–15% of the total expenses of ecommerce retailers. Reducing costs at each logistics stage will let your business invest more money in its growth. 

Large 3PL companies can offer great deals because they have all the necessary infrastructure. For example, they may provide drone delivery services allowing you to save your budget. 

Such vendors help reduce cost per unit and take away the bureaucratic pain. Usually, their services are compliant with government and industry regulations. Therefore, they follow the same rules and are compatible. For example, international shipping companies can collaborate with national and local carriers since they have all the necessary agreements.

Scaling The Geography

Imagine you are about to enter a new market and export your goods. Sending the orders manually by post will make your customers wait longer. Also, the international delivery price will be either your company’s or your customer’s burden. 

3PL will provide you with regional branches anywhere you want. With their help, you will need to ensure enough supply in the warehouses for particular locations. Logistics companies will take care of everything else. 

To sum up, 3PLs allow businesses to grow and scale geographically by providing access to their infrastructure and facilities in the areas they operate.  

E-Commerce and Logistics: Main Trends

Now, let’s discuss the most promising logistics and e-commerce trends you may adopt to your business needs to attract more customers and withstand competition.

Free Shipping is Now A Golden Standard

In the era of online shopping, good service is not a rare bird. So to beat competitors, you have to make it fast, seamless, and free. 

According to a recent Gartner Marketing survey for the 2022 holiday season, the inflation rate has made customers reconsider their priorities when shopping for gifts. For now, top-3 considerations are the item’s price (65%), value (53%), and free shipping (51%). That is why it’s a good idea to add free shipping to your value proposition.

Reduction Of Seasonal Trends 

Due to the recession, people often save money by shopping for gifts and necessities in advance. So today, seasonal trends for holiday shopping are less critical than inflation trends. To be more precise, research shows that people tend to shop for winter holidays gifts in October or November (48%) and year-round (16%). 

Individual Approach for Each Customer

Treat your customers like they are your closest friends. What does it have to do with logistics? You can greet your loyal customers by sending them small gifts and cards for a particular number of years with the company or a certain number of orders. 

To make it possible, you should cover two aspects when choosing a warehouse vendor. Firstly, ensure that your 3PL vendor can customize packing, add gift cards and bags, and send personalized messages. And secondly, establish a loyalty system for regular buyers and create a set of rules in your logistics solution for ecommerce. Thus, you will pass these instructions to your logistics partners in just one click. 

Recyclable Packaging

Reducing carbon footprint is a valid concern for almost every industry. And logistics is not an exception here. 

A McKinsey survey on sustainable packaging revealed that about 20% of companies committed to fully sustainable packaging by 2025 wouldn’t likely reach this goal. However, the eco-friendly trend is still promising since customers support this idea with money. Between 60-70% of customers communicated their readiness to pay more for products with sustainable packaging.  

It is never too late to join the team of environmentally responsible brands. And upgrading your packaging is a good start. 

Same-Day Delivery

Whichever goods you are selling, listing fast delivery is an excellent option to increase your sales. More than half (51%) of the US-based retailers are already offering delivery within several hours – and 65% plan to launch same-day delivery within the next two years.  

From 2019 to 2024, the US same-day delivery market is going to triple. It is expected to grow from $5.87 billion to $15.6 billion, so it’s worth adding the same-day delivery feature to your offerings to remain competitive. 

Decentralized Warehouse

Decentralized storage helps reduce delivery time for businesses selling large amounts of goods. In this case, carriers will pick the closest available point-of-sale for the customer and deliver from there. 

Humans vs. Drones

Logistics is one of the fields moving towards full automation. Research proves that drone delivery operational costs are 70% lower than freight ones. 

Amazon and Walmart are pioneers of the US aerial drone delivery services and plan to grow this sector of their services in 2023. In 2022, Walmart completed over 6000 drone deliveries and opened 36 hubs in seven states.  

Smaller retailers have limited ability to use drones for delivery. Such an approach requires investments in high-quality equipment and technical service. However, this logistics sector will continue to expand. We expect independent drone delivery services to become widely available in the near future. 

Logistics Software for eCommerce Companies

Now that you know the basics of logistics for e-commerce, let’s look at the general peculiarities of software solutions serving this industry.

Architecture 

Logistics solutions belong to the ERP (Enterprise Resource Planning) software. It is a complex system that consists of interconnected services. Each of them provides a set of features for end-users. That is why microservices architecture is a standard solution for logistics apps. 

User Roles

Most logistics apps have to support several roles. The reason for that is information access management. The roles depend on users’ jobs and responsibilities. For example, these are admin, sales, customer support, and so on. 

Another thing that should be flexible in logistics apps is user actions. Most often, logistics apps have more than one user interface. It means that you will need to build several UIs, which may take a considerable amount of time. 

Real-time Data Refresh

In logistics, data is a critical factor for decision-making. That is why such applications are data-intensive. There are multiple sources constantly providing information to the system. Delivery processes require apps to display real-time changes and monitor statistics over certain periods. 

UX Design

It’s crucial to have your end-users in mind while designing software products for the logistics industry. User interfaces for warehouse management and financial reporting will be different. However, they must still be accessible and easy to understand. Good UX will help your app stand out among competitors. 

A logistics app requires many dashboards, advanced filters, and search features. Typeahead and autocomplete functions, as well as multi-step forms, are also quite common.  

Software Form-Factor

There is no reason to set limits for choosing the form factor. Logistics apps vary from web app solutions to mobile and tablet hybrid apps, embedded systems for terminals, and so on. The choice depends on the type of machines your employees normally use. 

A web application is an optimal solution if you need an app supported by most devices. Besides, developing such software is fairly easy and doesn’t require significant investments.

Features To Look Out For In Shipping Software?

Let’s go through popular features of existing apps and find out how to choose the right fit for your business goals. 

Integrations With Third Party Services

Logistics apps don’t require complex backend logic. Instead, you can just plug the required services into your app via APIs. 

Here are some examples. 

Integration With CRM 

Whichever CRM system you’re using, you can connect it to your logistics app. You won’t need to deal with sophisticated data engineering or transfer all customer records manually. Integration with CRM allows for access to historical data from your previous solution. 

The only thing you will need to do is to define the way you want to display your data. Here, you can add custom fields for logistics. For example, you can pick the preferred method of delivery and the number of successful orders or notes. It will help you analyze your business performance over time and spot patterns in customer behavior. 

Integration With Finance

Although integrations with payment systems aren’t necessary, you may implement them in your logistics app. Thus, you can streamline many processes for your financial department and conduct payments via bank API in your app. 

Such integration may involve only your company’s operational units and third-party service providers. Alternatively, you can connect your app to a payment system you’re using for your customers.

Integration With Inventory Management System

Inventory management is an integral component of a supply chain. As a business owner, you may want to integrate inventories with your app via API. This solution will allow you to monitor the actual supply of your products and track how much time is left for storage. You can also connect it to your website or app and show items’ availability on product cards. 

Integration With Local Carriers Apps

Integration with 3PL companies makes business owners’ lives easier. For those who utilize the services of several carriers, this type of integration is a must. It allows you to see the complete picture of all of your vendors. Besides, you can automate the last delivery step with a set of business rules. 

You can connect any of the local carriers depending on your location (DHL, FedEx so on) and track the deliveries to step in for troubleshooting issues. 

Reporting

This feature will provide you with valuable insights into your logistics performance. Comparing the reports over different periods helps indicate problems and weaknesses. Consider adding some machine learning (ML) solution here, as it will be trained on your historical data and actions. Later, it may help you with process automation and performance improvement hints. 

With a reporting feature, you will get the statistics of successful deliveries, average delivery time, return rate, delivery cost per item, and other useful insights.

Factors to Consider When Developing a Logistics App from Scratch

When creating requirements for your logistics app, you need to consider the following aspects.

1. Warehousing

You need to choose between centralized and decentralized warehouse models. This decision will impact UI and user flows. 

2. Geography

International and local delivery specifics will be reflected in your app. International delivery has more hidden logic and business regulations, so if going for this option, you need to be ready and do research. 

3. Integrations

It would be helpful if you have a list of systems and their API integrations when creating the initial requirements list. This information will impact the development scope. If you don’t have them ready, you can list the features you want to have in your app. Our experts will help you choose the ones appropriate for your needs. 

4. Technology Stack

Finally, it’s critical to come up with the type of app you need. It could be a web, mobile, or desktop application. Luckily, software development experts can help you choose the proper architecture and technology stack. Devox software can consult you on choosing the most relevant and efficient technologies for your logistics app. 

Launch Your Supply Chain Management Solution with Devox Software

In this article, our experts have provided an overview of the latest digital trends to guide you into the future of logistics. Now you know what e-commerce logistics is, which steps each digital order goes through, and what to consider when building a logistics app from scratch. 

We know the pain of trying to implement out-of-box features into the existing services and then realizing they cannot cover all your needs. That is why we would like to offer custom development services for supply chain management software. We will take care of product design, user interfaces, and all necessary integrations. Devox software team will build your app based on any business rules and metrics you need.   

If you have any questions about e-commerce logistics, don’t hesitate to contact us. We are happy to help you and provide our expertise for resolving logistics challenges of any complexity.