How IoT Technology Will Shape the Future Of e-Commerce Supply Chains

Nabil Malouli, VP, Global Ecommerce, DHL Supply Chain

Just a quarter of a century ago the term e-commerce hadn’t even been coined. Fast forward to the present day and it’s an essential focus in any organization’s sales and distribution strategy. Insight suggests that the e-commerce industry will continue to grow substantially – online transactions are expected to double in the next three years globally - and whilst online sales currently account for just 15% of total retail sales, it’s safe to say the outlook looks good and the opportunities are huge. In fact, we’ll see as much growth in three years as we will have seen in the last 25 which is why this is one one of the most exciting shifts in the global economy.

We can date much of the e-commerce growth story back to 1995, when a now global, multi-billion-dollar company started to sell books online. Industries saw the impact and began to follow suit with online sales now expanded into most retail categories including groceries, fashion, life science, construction and automotive.

Whilst traditionally e-commerce was delivered in a B2C environment it has since moved to C2C (for example, on sites such as eBay) and now it’s making its presence firmly felt in B2B.

With this ever-increasing demand, companies need to build and transform their supply chain strategies and networks to effectively reach the customers of today and tomorrow. The Internet of things (IoT) is a technology that will be critical in enhancing the customer experience and increasing retention and loyalty. IoT has the potential to connect virtually anything to the Internet and accelerate data-driven logistics. But what are the tangible benefits?

Here are the five main applications:

1. Real-time tracking at unit level through the supply chain

With growing omnichannel consumer expectations, organizations will benefit from having a real-time inventory of their products across every channel. As an example, it’s key to merge online and offline inventory into a single pool thus enabling online sales to be fulfilled from the closest bricks and mortar store or from their distribution centers.

2. Increased inventory accuracy

Imagine a customer ordering and paying for a product online only for the business to realize it’s out of stock. This results not only in poor customer experience and loss of a sale and future customer, but also the additional operating costs of issuing a refund. Having an accurate inventory count across all sales channels will alleviate these risks and avoid any potential negative feedback from the consumer.

3. Traceability of product from production to the customer’s door

Customers are increasingly questioning how sustainable products are, as well as looking for product personalization. It’s essential therefore that organizations are able to track their products from the supplier to the warehouse and on to the customer door and to do it in the leanest way possible. IoT can help to deliver this traceability.

4. Tracking of returnable packaging

With increased online sales comes an increased volume of returns, as many customers choose to order more than one product and make their choices in the luxury of their own home. Businesses need to ensure that they have a streamlined returns process in place both for their own benefit and for the benefit of their customer. Once again, sustainability is a critical factor, so the packaging needs to reflect that. Returnable packaging is therefore a key enhancement, with IoT devices able to track consumer use and the progress of the returns process.

5. Enabling robotics solutions in the warehouse

Automation and robotic innovation in warehouses is an increasingly hot topic for any major organization selling online. By 2025, 50,000 warehouses are projected to be supported by automated solutions. IoT technologies are critical for the deployment of many of these autonomous technologies.

5G: the game changer

With its faster speeds and increased levels of connectivity, the roll-out of 5G will be a game-changer for supply chains and the use of IoT. With what appears to be boundless opportunities, IoT experts have the potential to transform e-commerce.

Watch this space – there are exciting times ahead for the possibilities afforded by IoT and e-commerce!

See Also:

Top IoT Solution Companies