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Logistics centre

2023 predictions – what is the year going to deliver?

Monday, January 9, 2023 - 07:20
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Rob Shaw, SVP International Sales, Fluent Commerce: “It’s fair to say that businesses will have a strong focus on profitability and cash flow in 2023. Whilst top line revenue and growth are important, we see a continued trend towards managing costs and driving operational efficiency. Retailers will need to have a keen eye on reducing the cost to serve. With this in mind, we see strong interest in having a clear “real time” view on inventory levels across all fulfilment channels – reducing shipping costs, decreasing the risk of both over selling and under selling, and automating updates and communications with consumers.

“As UK recession fears loom, consumers will also have to think twice about discretionary spend. For many, only essential purchases will be made as inflation rates again rise, with additional purchases being based on value for money and service. There will definitely be a slow down on holiday and social spending as citizens look towards cheaper ways to relax and enjoy themselves. However, I would expect that during the second half of 2023 we “could” see an easing of pressure on the consumer to provide a hopeful outlook mid term.

“To keep a steady ship in difficult waters, efficient stock management and reducing the cost to serve have to be top of the agenda for retailers in 2023. I would expect that only projects that show a solid return on investment will be sanctioned, with real time inventory availability and efficient fulfilment options high priorities.”

Mike Elton, Delivery Services Director of UK & Europe at FarEye: “Despite the ongoing challenges faced by the supply chain and logistics industry – postal and port strikes, driver shortages and rising costs to name just a few – customer demands remain high and continue to grow. Our research revealed that 86% of consumers prefer to wait no more than three days for a delivery. However, as many retailers lack the resources to have their own logistics networks, they rely on third party providers to handle the delivery process, putting their customers’ experience in someone else’s hands. This comes with risk so a growing trend that we are seeing – and I expect will continue into 2023 – is shared logistics networks. This involves pooling resources among competitors for them all to tap into a shared network, bringing the benefits of managing last-mile deliveries in-house without the expense of establishing and managing a solo network. It also offers flexibility and increased efficiency for retailers whilst providing customers with faster last-mile deliveries and better experiences. It is a win-win!”

Danny Hudson, Director of UK & Europe at FarEye

“Global E-commerce sales are expected to reach $6 trillion by 2024 with returns management remaining a hot topic for retailers and carriers as they juggle cost-effective returns management with keeping the returns process simple for consumers.”

“As retailers and merchants set out to establish an online presence, they offered consumers free returns to acclimate them to online shopping and during the pandemic they relaxed their returns policy, allowing a longer length of time to return merchandise. Now approaching the end of the year, rising costs are causing businesses to make changes to curb the flow of returns and are reducing return windows from 90 to 30 days.”

“Retailers will have to juggle the risk of passing on the rising cost on the consumer or absorbing it themselves. Research shows 32% of consumers will not pay for returns, and with customer loyalty being more important than ever, it’s a risk many businesses can’t afford to take.”

“So what will companies do? Retailers in 2023 will continue to look to last-mile delivery technology to help them manage and reduce returns-related costs. There is a dire need for technology to help them automate returns processes and make them more efficient whilst also providing visibility.”

“Two possible solutions gaining traction for 2023 are consolidated drop-off points for returns, combining returns in one large shipment to save shipping costs, or potentially partnering with multiple carriers for the best prices on returns.”

Mike Elton, Delivery Services Director of UK & Europe at FarEye: “Driverless vehicles will continue to make headlines with companies like Tesla and Nvidia continuing to fine-tune the technology for personal use. Issues like driver shortages and increasing labour costs will carry across into 2023 and retailers and shippers are beginning to realise the implications autonomous vehicles could have on their own operations. Mentions of delivery drones and robots in the company earning calls have more than doubled in recent years, and initiatives in this technology are already underway.

“Although there is no promise that autonomous vehicles will be up and running in 2023, technology will continue to be fine-tuned, its cost and labour efficiencies justified and its safety ensured. It would be reasonable to predict that drone technology will reach a wider consumer scale in 3-5 years, having the greatest impact in geographies where it is difficult for delivery trucks to navigate and decipher specific addresses – a common environment found across parts of Asia. Look up and East in 2025.”

Danny Hudson, Director of UK & Europe at FarEye: “Consumers are increasingly demanding more sustainable options for their e-commerce deliveries and this sentiment will only strengthen in 2023. Accenture found that 43% of consumers are more likely to choose retailers that offer more sustainable delivery options. Our own research confirms that 56% of consumers are interested in seeing the carbon emission impact of their deliveries. Consumers want to see the impact of their deliveries and be able to make choices about their deliveries.”

“Therefore, companies in 2023 will ensure they have more sustainable delivery options available for the consumer at the checkout, providing visibility on the consequences of their delivery choices on the environment.”

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