Ecommerce businesses constantly seek ways to improve efficiency and provide a better customer experience amidst evolving demands and fierce competition. There are an estimated 12 to 24 million ecommerce websites across the globe, but only less than 1 million of these sell more than $1,000 per year. The value chain is what plays a crucial role in increasing these numbers by transforming ideas into products and delivering them to the customers. According to reports, 39% of enterprises have already achieved their cost-savings goal through cloud adoption.
Cloud Empowering Ecommerce Businesses
Cloud technology and managed services have become essential tools for achieving ecommerce goals. According to Mckinsey, cloud technology can generate more than $1 trillion in run-rate EBITDA across Fortune 500 companies in 2030. In the rapidly changing landscape of ecommerce, leveraging the cloud has become not just a choice, but a necessity to stay competitive. The ecommerce value chain encompasses various activities, from operations to marketing, and has become intertwined with cloud capabilities, enabling businesses to optimize operations. A report by Fortune Business Insight mentions that the global ecommerce cloud market size was $12.32 billion in 2019 and is expected to reach $55.67 billion by 2027, exhibiting a CAGR of 20.8% during the forecast period.
Previously, ecommerce orders often took a week or longer to arrive, with limited package tracking and uncertain delivery windows. However, Amazon revolutionized the ecommerce industry by introducing free next-day deliveries, despite the increased shipping costs. This move raised the bar and set new expectations for customer delivery experiences. Other businesses had to adapt to meet these elevated standards and compete in the market, without incurring too much costs. This is exactly where the services of Cloud step in!
In this blog, we delve into the challenges of last-mile operations in ecommerce and further explore the benefits of harnessing cloud technology to enhance and adapt to ecommerce operations.
Last Mile Delivery Challenges and How Cloud Can Help
What is last mile in ecommerce?
In ecommerce, "last-mile" refers to the final link in the supply chain, where the product reaches the end customer. Three crucial factors come into play:
- Efficient Transportation of the Product: Whether it is from a warehouse, a depot, it needs to reach the customer’s preferred destination as efficiently - that is quickly and cheaply - as possible
- Customer Satisfaction: Providing a positive experience, keeping customers informed, and enabling feedback.
- Adaptability and Resilience: Building flexibility to accommodate changing preferences and handling unforeseen challenges.
This stage presents unique challenges that can impact more than just customer satisfaction. So let us dive into the challenges at hand and then explore the role that cloud technology plays in addressing these specific challenges:
Direct-to-consumer Deliveries
The recent growth of ecommerce has led to a significant increase in direct-to-consumer deliveries, fortifying the role of “last-mile” logistics. The increased demand has put pressure on ecommerce businesses to improve their last mile operations and meet customer expectations. Cloud services can help optimize operations and improve supply chain management, which in turn ensures that parcels are delivered on time and to the correct location.
Difficult Target Service Levels
It is challenging because it requires meeting specific delivery windows, which can be difficult to achieve due to traffic congestion, weather conditions, and other factors. Deliveries need to be accurate, with the right products delivered to the right customers at the right time. Cloud services can provide real-time inventory visibility to optimize last mile operations and improve accuracy.
Small Order Dimensions
It is often used for small orders, which can be less profitable for delivery companies due to the high cost of delivery relative to the value of the order. By utilizing cloud technology, ecommerce businesses can optimize overall operations, reducing the cost of delivery relative to the value of the order.
High Level of Dispersion of Destinations
It can be a task due to the high level of dispersion of destinations, which can make it difficult to optimize delivery routes and schedules. Even issues like traffic congestion, especially in urban areas, can cause delays, increase delivery times, and add to the cost of delivery. What cloud technology does is; optimize delivery routes and schedules, which can help to reduce delays, and improve delivery times.
Parcel Security and Deliverability
The deliverables are at risk of theft and other security concerns, leading to potential loss or stolen packages. Last-mile delivery can also be challenging due to issues such as incorrect addresses, inaccessible delivery locations, and other factors that can result in failed deliveries. Cloud services provide robust security measures at different levels to protect against data breaches and other security threats.
High Costs
Since last mile delivery is the costliest component of the delivery process, it is a make-or-break situation for ecommerce businesses. According to reports, last mile operations account for up to 53% of overall logistics costs. Cloud services can help ecommerce businesses reduce costs at multiple stages, while also maintaining the quality of service provided.
Harnessing Cloud Services for Last-Mile Excellence
Having examined the challenges outlined in the preceding section, it becomes apparent that leveraging cloud services can significantly contribute to achieving last-mile excellence. Here are some ways in which cloud technologies are helping ecommerce operations:
Supply Chain Management
These cloud-based services help in efficiently managing inventory levels, tracking shipments, and monitoring supplier performance. This means, Ecommerce companies can streamline their operations and ensure seamless order fulfillment. These services play a crucial role in enhancing operational efficiency. Real-time insights and analytics help in optimizing warehouse operations, inventory tracking and order monitoring, giving your business a competitive edge.
Data Analytics
Deeper insights into your data help you identify trends and patterns, enabling data-driven decisions that improve products, services, and marketing strategies. Consider what real-time data and analytics provide for your ecommerce logistics. Cloud-based ecommerce empowers businesses to optimize delivery routes, schedules and reduce delivery times.
Security
It is paramount to safeguard ecommerce operations against cyber threats. Cloud-based security provides real-time threat detection and response, secure data access from any device, and enable:
- Aid in compliance with data privacy regulations
- Ensure the protection of customers' personal information
Scalability
Cloud technology allows ecommerce companies to build their online presence quickly. The scale-up or down model perfectly syncs with the needs of the retail sector. For holiday seasons, when the demand is high, the elasticity of the cloud helps in scaling all the ecommerce processes end to end.
Personalization & Recommendations
64% of shoppers believe that retailers don’t truly know them, this is a shocking revelation. The Cloud can provide personalized product recommendations and offers to increase consumer interactions, boost conversions, and drive more revenue by increasing the Average Order Value. 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience.
Recovery Backups
Unforeseen events such as power outages or physical damage to the workplace can result in data loss and significant revenue setbacks. However, by utilizing cloud technology, you can forget about this concern. With your data securely stored in the cloud, you can operate your business without worry.
Globalization of Business
Leveraging the internet, businesses can efficiently target customers on a global scale. With cloud accessibility, customers from any location around the world can easily engage with the services and offerings provided by businesses.
Automatic Updates
Since the data management occurs in the cloud, automatic updates are seamlessly applied, relieving you of any concerns regarding upgrade issues. With the cloud, your system stays up-to-date, ensuring you have access to the current features and improvements without much manual intervention required.
Cloud4C: Transforming Last Mile Ecommerce with Managed Services
The ecommerce industry operates differently compared to other industries, necessitating the establishment, management, and deployment of a high-concurrency infrastructure that remains consistently operational. Cloud4C, with its comprehensive suite of Managed Cloud and Hybrid Cloud Services, is well-positioned to offer ecommerce companies the backing they need to thrive in this evolving landscape.
Learn more about how a global logistics major, acquired secure scalability with Cloud4C’s Managed Services.
Our Managed Services can provide real-time inventory visibility, which can help businesses to optimize their supply chain operations and improve efficiency. This can help businesses manage their inventory and ensure they have the right products in stock to meet customer demand. Cloud4C's Managed Services can also provide robust security measures to protect against data breaches and other security threats.
The Hybrid Cloud Services we provide can help create an agile infrastructure that can scale for massive amounts of customers. This can help businesses optimize their operations and improve supply chain management.
By partnering with us, ecommerce businesses can leverage the full potential of cloud technology, transforming their delivery and value chain to the very last of their operations. The result is streamlined supply chain management, enhanced operational efficiency, improved customer service, data-driven decision-making, and robust security measures.
Take the next step in your ecommerce journey and reach out to Cloud4C today.
