It’s hard to imagine a part of the retail industry that was impacted as severely by Covid-19 as logistics. While individual retail categories were hit in different ways, delivery and logistics providers essentially saw their business double during 2020 as more and more Aussies jumped online to pick up what they need – be it new shoes or a new TV unit. And while we’re only a few weeks into 2021, there are few signs the trend is going to reverse anytime soon. “I think the number one
r one issue [we’re seeing] is that no-one was able to predict the growth in e-commerce – five years of growth in five months, depending on which carrier you’re talking to,” Hubbed founder and chief executive Dave Mclean told Inside Retail.
“I think most carriers have tried to put on additional staff, and to work hard to make sure they can still deliver a quality service. But you’ve only got so many people, so many vehicles, to manage just a crazy amount of volume.”
With increasing purchases over the holiday period, January and February are likely to be the biggest returns season ever, according to Mclean.
“I don’t see [demand] abating at all, quite frankly,” he said.
On top of the increased demand that we’re likely to see continue in 2021, there are also changes to the way the industry itself works.
The rise of ship-from-store
Australia is a big place with a population that can be quite spread out – something delivery services have traditionally struggled with.
But Shippit founder Rob Hango-Zada expects to see more localised delivery platforms, like DoorDash, Sherpa and Drive Yello, popping up to service areas that aren’t as well covered by major logistics firms. As a result, retailers will be able to utilise a ship-from-store delivery option more freely to cut down on delivery times.
“If you’re a retailer that has physical outlets across Australia, it’s actually better for you to ship items directly from your store to the end customer versus shipping across the country [from a warehouse],” Hango-Zada said.
More robust industry collaboration, too, could be on the cards this year. Businesses with coverage in certain areas could work together with partners in other areas to widen their potential delivery zones and create a better experience for a customer that, increasingly, is expecting all the hard work to be done for them.
And it may be time for the delivery and logistics sector to make an overdue shift, according to Mclean, who said 2021 could be the year the industry takes a long hard look at how sustainable it is.
“The amount of deliveries that are happening at the moment is simply not tenable from an environmental point of view, due to the amount of vehicles on the road,” Mclean said.
“I think there’s going to be a lot of innovation in that space, where firms focus on how to have fewer vehicles on the road, or how to make the efficiency of deliveries higher.
“I think consumers are becoming more sensitive to [greenwashing], and it’s not going to be good enough to just say you care about the environment – it’s going to have to be demonstrated in the supply chain.”