Domestic E-commerceNov 24, 2023

What is EC Logistics? Explanation of its Characteristics and Challenges!

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For those considering entering the EC (E-Commerce) logistics field, understanding its processes and characteristics in detail is key to business success. EC logistics has several features that differ from traditional logistics, and these play an important role in the operation of an EC business. In this article, we will explain not only these features but also their importance and the challenges that may be faced.

Unique Characteristics of EC Logistics

Delivery to Multiple Locations in Small Quantities

The most notable feature of EC logistics is the small quantity of goods delivered to each destination. While traditional logistics typically involves delivering large quantities of goods to a single location, EC logistics requires delivering small quantities of goods ordered by individual customers to various destinations. This significantly impacts the planning, effort, and cost of delivery, necessitating efficient delivery planning.

Need for Individualized Attention

EC logistics requires individualized attention for each customer. Depending on the type and quantity of products and customer requests, special packaging (such as gift wrapping) may be necessary. Such individualized attention affects the skills of the logistics staff, packaging time, and choice of materials.

Diversity in Delivery Speed and Methods

Due to the convenience of online shopping, customers have high expectations for product delivery, making speedy delivery important. Recently, there has been a diversification in delivery methods (e.g., direct handover, unattended delivery, pickup at convenience stores, dedicated delivery lockers, and boxes), and managing these methods effectively to maintain customer satisfaction is crucial.

Frequency of Returns

Unlike in-store sales, returns are frequent in EC logistics. Online purchases, without the opportunity to physically inspect products, often lead to returns due to unexpected differences or size mismatches. Therefore, an efficient return process is essential.

Two Essential Reasons Why Logistics is Vital for EC Businesses

Impact on Sales and User Experience (UX)

Logistics significantly impacts sales and the user experience (UX) in EC businesses. The process from purchase to receipt of goods is a crucial part of the overall shopping experience. Key elements include the status of product inventory, speed of delivery, and quality of packaging. Insufficiencies in these areas can lead to decreased customer satisfaction and potentially hinder sales growth. Quick delivery and high-quality packaging earn customer trust and encourage repeat visits to the EC site.

Burden of Detailed Tasks

EC logistics involves many detailed processes such as inspection, storage, and shipping of goods. These delicate tasks can impose significant burdens on staff and costs. Especially for sites targeting general customers, where there are many delivery destinations, quick delivery is required to maintain customer satisfaction. Streamlining logistics operations can reduce staff burden and contribute to increased sales and customer satisfaction.

Three Major Challenges Faced by EC Logistics

Occurrence of Human Errors

As many EC logistics processes depend on manual labor, human errors are inevitable. Mistakes such as recording the wrong delivery address, misdelivering products, and errors in picking and inspection can lead to customer dissatisfaction and additional costs. While it is difficult to completely eliminate human errors, their frequency can be significantly reduced by implementing appropriate systems and processes.

Shortage of Management Talent

EC logistics involves complex tasks over a wide range, requiring personnel with advanced skills and knowledge for effective operation. However, developing and securing such talent takes time and cost, leading to shortages. This shortage can result in shipping delays and mistakes, ultimately affecting sales.

Increase in Costs

Cost increase has been a long-standing issue in EC logistics. Costs incurred in storage, handling, delivery, and the persistent high costs in the transportation industry due to its challenges, are a constant concern for EC business operators. Costs vary depending on the type and quantity of products and delivery regions, often leading to sales not going as planned. This raises concerns that increased costs may offset profits.

Addressing these challenges and establishing an efficient logistics system is essential for the success of an EC business.

Summary

This article explained the characteristics and challenges of EC logistics. EC logistics is a logistics system that supports "E-Commerce (EC)" as a whole and has different characteristics from traditional logistics. In EC businesses, logistics play an extremely important role due to reasons such as the burden of detailed tasks affecting sales and UX. Please utilize the content explained in this article for the operation of EC logistics.

AnyMind Group's "AnyLogi" is a platform that enables overseas shipping with the sense of domestic delivery. It offers a one-stop solution for registering with delivery companies, issuing shipping labels, creating invoices, and requesting collection. Additionally, features like automatic translation of shipping tariffs and English address notation significantly reduce the workload. Implementation is possible in just one hour. Leveraging AnyMind's extensive global knowledge, we provide support that allows businesses with no experience or knowledge in cross-border EC to confidently expand their business.

AnyMind has prepared numerous materials related to cross-border EC.