E-commerce Boom Brings Challenges for Carrier Companies and Merchants

E-commerce Boom Brings Challenges for Carrier Companies and Merchants

Feb. 11, 2013 Anders Innovations

According to YLE News e-commerce growth has created new jobs to the carrier industry. Managing growing delivery volumes is crucial for both carrier companies and merchants.

As online home deliveries are booming, the number of transport vans is sky-rocketing and transforming the urban transport landscape. E-commerce boom is quite simply the biggest challenge faced by the parcel delivery industry in decades.

 

Companies struggle to keep up with the volumes

E-commerce in Finland is still lagging behind, for instance, the Scandinavian countries and the UK. In Finland the biggest growth is only happening right now, while for instance in the UK parcel delivery volumes are expected to level off by 2015.

For carrier companies the growth of order volumes is mainly a question of how to manage the growth and maintain the company's brand as a reliable and fast operator. Internationally, carrier companies have even set upper limits to the number of packages they are prepared to deliver within a certain timeframe.

For e-commerce merchants when managing growing volumes it is essential to have versatile distribution strategies. In the best case, the distribution of orders is not tied to a single operator, but orders can be mailed as smoothly as possible through a myriad of operators.

 

Returns management needs to be developed

E-commerce boom is driven by young people whose shopping behavior is changing. This is also reflected in delivery volumes. DHL Finland's CEO says young people shop differently than older generations in Finland:

Young people think it obvious and natural, that they can order, for example five products. They are of different colors, different sizes, different shapes, but they have no intention of buying all of them. They feel that the home is the best place to check these things out. Then, they select the one favorite, and four others will be returned.

It will be interesting to see how the changes in consumer legislation, which are taking effect at the end of this year, will influence this behavior. The new EU directive on consumer protection requires that the web shops display information about who will pay the return product.

If the merchant wants the consumer to pay the shopping fees in case of a return, it must be reported to the customer before the order is placed. In the same context, the estimated maximum delivery costs for the return must be stated. If the payer of the product return fees is not clearly stated, the merchant will have to pay. All EU countries must embed the directive into national law by December 2013.

Smooth returns management is an increasingly important challenge for e-businesses. Managing returns is still in early stages in many web shops, in which case it may require considerable resources. Establishing e-commerce site and getting the orders rolling might be quite easy with powerful modern tools, but building smooth and effortless flow processes for deliveries and returns is quite another matter.

It is important to remember that as e-business grows account auditors take interest in incoherent bookkeeping. At the same time buyers demand real-time information on the progressing of their orders and delivery processes. Customers are also impatient to get paid back the money from returns. All this demands expertise and the partner networks.