Today, we’re looking at the latest developments in logistics and the technologies, strategies and trends within the e-commerce and retail industry. Any discussions about logistics and new technologies must of course start with Amazon and consultant Satish Jindel says there will not be a finish line, only constant innovation by Amazon and competitors who will struggle to keep pace. Business Insider has a new report that looks at Amazon and other companies using logistics to secure their competitor.
Harvard Business Review looks at the US supply chain, what’s not working and why trade deals benefit workers rather than hurt them in contrast to what US politicians are saying. Chicago startup ShipBob is developing strong business as a shipping-fulfillment option for crowdfunded companies among others and its growth is impressive. Who would have thought of Pitney Bowes has a logistics leader? The company is even making its APIs publicly available so developers can use them to improve functionality of their own ecommerce software.
DHL‘s new $10 million first innovation centre outside of Germany; based in Singapore it is its first logistics centre in the Asia-Pacific region. Online sales in China are on pace to hit around $590 billion for 2016, driven primarily by improved IT and payment facilities according to YTO Cargo Airlines Co. Ltd. Logistics create a huge barrier to entry to the China market.
So you think Amazon rules the world? New report says you ain’t seen nothing yet
That Amazon.com Inc. is transforming the way commerce is conducted has become obvious even to the casual observer. But if Satish Jindel, who is hardly a casual observer, is correct about where the Seattle-based e-commerce giant is headed, it hasn’t gotten started yet.
Given Amazon’s relentless pace of innovation, there will likely be no finish line. But at the company’s present rate of development, it will become the world’s ultimate retail monster, with its only rival being the Chinese firm Alibaba.com, which dominates its own market using similar strategies and execution, Jindel reckoned.
In a 50-page study accompanied by more than 25 charts and tables, a summary of which was made available to DC Velocity, SJ Consulting Group Inc., a transport and logistics consultancy founded by Jindel, said that Amazon’s goal is to be the primary conduit between manufacturers and customers. Everyone in the middle will be forced to work with Amazon or disappear, and producers will have no choice but to do business only with Amazon because there will be few if any alternatives available, according to Jindel.
Traditional retailers such as Bentonville, Ark.-based Wal-Mart Stores Inc., Richfield, Minn.-based Best Buy Co. Inc., and Minneapolis-based Target Corp. will survive only if they build models similar to Amazon’s, which at this stage seems highly unlikely, Jindel said. In fact, while Amazon’s strategy stands to badly hurt Wal-Mart’s bricks-and-mortar profit margins, Wal-Mart’s e-commerce channel will not threaten Amazon’s position, Jindel said. Wal-Mart generated about $355 billion in total sales last year, nearly four times as much as Amazon. Via dcvelocity.com
Amazon earnings reveal the continued strength of its e-commerce marketplace
Amazon’s strong growth in marketplace sales is likely being driven by its reputation to deliver reliable, speedy shipping. To keep its shipping standards high, the e-commerce giant has been heavily investing in building up its own delivery logistics division over the past year.
Just last week, Amazon announced that it will be opening two new fulfillment centers in New Jersey and a new college campus pickup location at California State University Long Beach. The company is trying to become self-sufficient in all aspects of order fulfillment. Building its own logistics service helps Amazon solidify its spot as the biggest e-commerce business around.
To be sure, there are several expenses and complexities involved in delivering over this so-called “last mile,” but Amazon is willing to make the effort to secure its position. And it’s not the only company doing so. Cooper Smith, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on same-day delivery that takes an exhaustive look at this market and sizes the percentage of people who will purchase goods to be delivered the same day. Via businessinsider.com
What You Wont Hear About Trade and Manufacturing on the Campaign Trail
…Why are supply chains structured this way with tiers of component makers who assemble progressively larger pieces? A big reason is technological complexity. Long gone are the days of vertical integration when a manufacturer could make everything itself. In high-tech products, specialists focus on narrow slices of the value chain where highly specialized skills are necessary. The LCD touchscreen in your iPhone is extraordinarily complex to manufacture, and only a handful of companies in Japan, Korea, Taiwan, and China have invested in the capabilities and manufacturing capacities to make them. They, in turn, buy components and materials from another tier of specialists located mostly in Japan and Korea. The supply chain looks like a web with many tiers, and each major sub-component has its own web.
Since there is no supply chain in the United States, you couldn’t make it in America if you wanted to — unless you imported each and every part, and by the time you packed them up and shipped them, it would cost more than importing the completed touchscreen.
Similarly, as cars get more complex and incorporate more electronics content, a greater percentage of the parts will come from outside the walls of the traditional assemblers like General Motors. Automatic lane-change or braking systems, electric power steering, complex engine controllers — all require microcontrollers and power semiconductors. It simply is neither possible nor practical to be the best at building everything oneself. That is one of the forces behind the dramatic changes in the U.S. automobile industry over the last five years. While production is approaching all-time highs, the percentage of parts that come from U.S. sources continues to steadily decline. Via hbr.org
ShipBob finds a place serving crowdfunding success stories
Evanston-based Ampy raised more than $300,000 on Kickstarter. But when it came time to finally ship the product, a wearable battery charged by body movement, the company ran into trouble.
Its shipper “had horrible service,” said Stephen Ross, director of sales. “In one instance, they almost cost us, like, $4,000 to $5,000 in sales. That’s when we knew we had to switch.” So they turned to ShipBob, a Chicago startup that’s finding an identity as a shipping-fulfillment option for crowdfunded companies.
“We thought, with ShipBob, if worst comes to worst, we can actually go down to the warehouse and see what’s going on,” Ross said. “And the pricing was so much better.” ShipBob began in September 2014 as a low-cost consumer package delivery app, then moved to fulfillment services for small businesses. Now, ShipBob’s seeing gains by targeting successful crowdfunded operations. Via chicagotribune.com
Pitney Bowes bets on digital logistics and APIs to move beyond meters
As the world increasingly relies on data to conduct business, traditional companies are embracing the notion that they must refashion themselves as technology organizations. Pitney Bowes is doing just that, evolving from a 96-year-old manufacturer of postage meters and mail-sorting services to a producer of digital logistics that fuel ecommerce around the world.
Pitney is building mailing and logistics applications to help companies sell and ship their products and services online, a critical piece of a multi-year transformation that began in 2013, according to James Fairweather, Pitney’s senior vice president of technology. At the core of these services are application programming interfaces (APIs), building blocks that enables developers to write and integrate apps without having to write fresh code. APIs reduce the frictions with which programmers can build, test and run software, and their democratization is considered table stakes at a time when companies are racing to build new digital products with which to attract customers.
Pitney is making its APIs publicly available so that developers working for its customers can use them to improve the functionality of their own ecommerce software. “We see APIs as a way of making the services we provide useable in both applications we build and applications our clients want to build,” Fairweather tells CIO.com. “We want to provide the capability to plug into clients’ business process and let them run their commerce on top of Pitney Bowes.” Via cio.com
DHL Asia-Pacific Innovation Centre incubates future logistics technology
When you step into DHL’s Asia-Pacific Innovation Centre (APIC) in Singapore, a 623-meter-squared facility in an industrial zone in the island state, you feel as if you have been transported into the futuristic world of logistics.
A first of its kind in Asia-Pacific, this SGD$10m facility is DHL’s first innovation centre outside of Germany, and the first dedicated centre for innovative logistics services in the Asia-Pacific region. Launched with the support of the Economic Development Board (EDB) of Singapore, the APIC showcases futuristic technologies that will transform logistics operations.
In an hour-long guided tour of the centre, a visitor typically runs through exhibits that showcase the future of automation and robotics, augmented reality, unmanned aerial vehicles, self-driving vehicles and maintenance on demand. Via computerweekly.com
How IT will drive e-commerce logistics in India and beyond
“The numbers” are for e-commerce sales in China, and they are astounding. In the first two months of 2016, China’s online retail sales hit US$98.2 billion, an increase of 27 percent over the previous year. That puts it on pace to hit around $590 billion for the full 2016.
In comparison, according to the Department of Commerce, total e-commerce sales in the United States last year were about $342 billion, a year-over-year increase of 14.6 percent – good, but not China-good.
And the driver of this e-commerce growth in China is … payments. David Su, chairman of YTO Cargo Airlines Co. Ltd., which provides express delivery to Alibaba and other Chinese e-commerce ventures, said at the recent Cargo Facts Asia conference in Hong Kong that ventures such as Alipay and epay are driving the growth of Alibaba, Taobao and other e-commerce companies by making it easier for the next generation “to buy everything via cell phone.” It should be noted that Alibaba now owns 20 percent of YTO.
But what appears lost on some within the air cargo sector is the underlying message in Su’s comments. The barrier to entry to China’s e-commerce opportunity has newly become somewhat significant. Cainiao is Alibaba’s logistics arm, and it has created an IT platform that integrates with Alipay and feeds crucial logistics details not just to consumers, but to parties to the e-commerce fulfillment. It appears that e-commerce startups off the Cainiao platform or other e-commerce networks will have an extremely difficult time making headway into the Chinese market. Via aircargoworld.com