Wednesday, June 5, 2013

Coming to a Big Box Near You:

‘Ship to store’ highlights how e-commerce is impacting shippers’ supply chains.

Home Depot has become the latest retailer to enthusiastically embrace the “buy online, ship to store” model. In a conference call last week, Home Depot CEO Frank Blake said the 2,200-store home improvement chain had completed their rollout of the system, and disclosed that 22 percent of online sales are now picked up at stores. Major chains including Bed, Bath & Beyond and Best Buy are using similar methods, with sales through this channel running ahead of expectations.

The meteoric growth of e-commerce, driven by mobile technologies, customer reviews and a better customer experience online, is shaking up the supply chains of major shippers; e-commerce has grown twice as fast as total retail sales over the past five years, expanding nearly 15 percent in 2012 over 2011 versus total retail sales growth of 5.3 percent during the same period.

According to Forester Research, reported the Journal of Commerce, the Internet will account for 10 percent of all U.S. retail sales by 2017. It’s also a global phenomenon – according to the China Ministry of Commerce, online retail sales last year in China totaled $179 billion, up more than 40 percent from 2011. With China, India and Indonesia setting the pace, e-commerce sales are booming in the Asia-Pacific, according to Practical E-commerce.

Bricks and mortar aren’t going away; even by 2025, online sales still will represent only 25 percent of all sales globally, supply chain consultant Tomkins Associates said in a recent research report. But the push to maintain lean inventories, for example, means that maintaining multiple supply chains depending on the channel — a retailer having two complete supply chains for bricks and mortar and catalog sales — is losing favor.

The only constant is change.

Kirk Shearer
TOTALogistix, Inc.
1-800-989-0054 x103

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