It's not even Q3 yet, but like most people in the supply chain & logistics industries, we are already thinking about Holiday 2016. In the most recent episode of Logistics 2.0, we discuss our top 3 predictions for this years holiday season.
Watch the video or read the transcript below!
Welcome to Logistics 2.0. I'm Karl Siebrecht with FLEXE. You know, as consumers, it sometimes feels like the holiday season in Q4 is already way too long. But for those of us who work in logistics, we know that the holiday season actually starts in the spring or summer when we have to start laying our plans for how we're going to manage the great influx of commerce that comes at the end of the year. As we've been out talking to companies, our customers, and keeping tabs on what the hot topics are, we've already started to get going on creating our top three predictions for the holiday season from a logistics perspective. Here they are now.
Prediction one: Amazon's influence will continue to expand
We're probably not alone in believing this, but the way we think about it is Amazon has fundamentally transformed supply chains from what have traditionally been cost centers into a revenue driver. They have figured out a way to invest in a massive infrastructure, apply modern technology to it and deliver a new consumer experience that has driven growth and market share gains, and they're forcing everyone else to try and react. No longer can we think about our supply chains as just being a source of efficiency for the business. Now we have to invest with our eye towards growth and trying to maintain or grow our market share. That's entirely new for this industry.
Prediction two: SaaS and web-based software technologies will play a much more mission-critical role this Q4
It's one thing to say, "We've got to keep up with Amazon. We've got to compete." It's another thing to actually build a process and a system and an infrastructure to do that. See, it's not just about size because the fact is, very few companies on the planet can match Amazon's size. It's about also figuring out how to be smarter and more flexible so that you can respond to consumer opportunities and compete more vigorously with everybody out there. We believe these web-based, SaaS-based technologies are a core component of doing that. It's everything from new products coming out, from Highjump, Llamasoft, a cool company that's new to me called Narvar that does some great things in e-commerce fulfillment, and frankly, products from FLEXE as well that help you dynamically expand your warehousing capability.
Prediction three: eCommerce will continue to grow
I'm sure there's probably no one out there who would disagree with this prediction. We specifically believe that this year will be the first time that eCommerce will make up over 10% of retail sales. So this may again be obvious to people but here's the implication. Once it passes the 10% threshold, companies can no longer think about taking their existing supply chain and logistics infrastructure and bolting on an e-commerce capability. When it reaches that threshold, it's time to stop and fundamentally rethink how a company does logistics and start to design for eCommerce and omnichannel strategies that again, all of us as consumers now expect and, frankly, demand. This is going to be a long cycle to achieve this and it will require lots of innovation, but in so doing, it will transform the logistics and supply chain industry and create exciting times for all of us who work in the industry.
Again, as we sit here in May, the holiday season seems far off, not so far off for those of us in logistics. The companies that will win this Q4 and beyond are those that are already thinking about and frankly, well understand these issues and they already have plans in place, are making investments against those plans, and are innovating around their supply chains in a proactive way. Those are the companies that will be leading the change along with the big guys like Amazon as we rewrite the rules of logistics.
If you liked this content, sign up for email, subscribe to our channel, and please post your comments below. We always love to hear from you. That's it for this week. I'm Karl Siebrecht with FLEXE. Thanks for watching Logistics 2.0.
For our latest industry predictions, check out our 8 Retail & Logistics Predictions for 2019 whitepaper!