Preparing Your Business for Sustainable Success in E-commerce
Preparing Your Business for Sustainable Success in E-commerce
By Luke Li, Retail Segment Manager, UPS Asia Pacific Region
Few industries have been hit harder by the coronavirus pandemic than offline retail. With shopping malls and high streets closed as part of nationwide lockdowns to curb the spread of the virus, clothing stores across the world have seen their primary revenue stream dry up overnight.
The data points to a long road to recovery, with fashion and luxury sales, for example, forecast to drop as much as 38% for the remainder of 2020. But as the old saying goes, with every challenge comes opportunity, and with more people staying home and reassessing their relationship with retail, a few clues as to what the so-called ‘new normal’ will look like are starting to emerge.
Firstly, there’s e-commerce. Now, the growth in online shopping is of course nothing new, with even pre-pandemic predictions suggesting that total retail e-commerce sales in Asia Pacific will be worth US$4.15 trillion by 2024 – a 70% increase on 2020 figures. But as retail stores struggle to stay afloat, more moves are being made to speed up the digital transition, and consumers and businesses are becoming more reliant on online shopping than ever.
Secondly, as we work on curbing the spread of the coronavirus, physical interactions are being kept to a minimum, which has further precipitated the rise of contactless transactions. Electronic forms of payment are now preferred, such as e-wallets, and deliveries are being dropped off at our front doors for collection, or at alternative delivery locations such as service lockers.
Lastly, meaningful luxury. There is an increasing focus and importance placed on the values and beliefs of brands and what they stand for. As consumers search for a product, they are increasingly likely to take into consideration what a brand is doing in terms of social responsibility and environmental sustainability. Longevity, durability and the usability of a product are now also determining factors for consumers before making a purchase.
THREE TIPS TO LEVERAGE THESE TRENDS TO BUILD A SUSTAINABLE SUPPLY CHAIN
1. Give yourself a platform
When building a supply chain, firstly determine which e-commerce platform you want your business to operate on – be it an online marketplace like Amazon, or through your own website.
There are of course pros and cons to each. E-commerce marketplaces allow you to quickly get started and leverage a large, existing consumer base, thereby reducing your customer acquisition costs. In fact, UPS data shows that marketplace adoption in Asia Pacific is almost ubiquitous, with 93% of the region’s shoppers currently active on several sites. For beginners, the popularity, convenience and reach of an online marketplace make this an attractive option.
On the other hand, if you create your own website, you have greater control in terms of the design, branding and engagement with your customers, but more investment will be needed in terms of advertising and marketing.
2. Choose the right shipping and delivery options
Next, determine how you are going to ship your products. In the UPS Pulse of the Online Shopper survey, which takes a closer look at the online purchasing habits of the world’s e-commerce shoppers, we found that more than half of respondents prefer a cheaper, but slower shipping option. However, there are always consumers who will pay more for a shipment if it is urgent – like a gift for a loved one – so having a balanced range of options is key.
Once you have decided how to ship, it’s also important to consider the sustainability aspect in terms of carbon footprint and emissions generated through delivering your item. With the UPS Carbon Neutral Program, businesses can buy certified carbon offsets for any of their shipments. These contributions are then reinvested to support conservation projects around the world.
Then of course there are returns, which are now as much a part of the online shopping experience as the purchase itself. It’s important to remember that, even online, your interactions with your customers don’t always end with the delivery. Returns are an integral part of a business with 69% of Asia Pacific shoppers agreeing that it impacts the overall perception of a brand and business and 42% saying they research a brand’s returns policy before they even start browsing.
3. Set the right expectations for your customers
Lastly, you will need to consider the expectations of your consumers. According to the Pulse of the Online Shopper, almost 50% of shoppers value flexible delivery options such as changing the delivery date or having the shipment sent to an alternate location. In fact, 64% of online shoppers in the region prefer having packages left at a designated location for pick-up.
It is therefore important to have tools, such as UPS My Choice, which offer consumers flexible, contactless delivery options. This also aids in preventing potential missed deliveries and subsequent re-delivery attempts, which lowers mileage and carbon emissions as well.
To sum it up, tough times don’t last, but tough businesses do. Partnering with a reliable international logistics service provider that offers various shipping tools and solutions options to cater to both your needs and those of your customers is vital to success. It helps you manage inventory and orders efficiently, provide consumers with flexibility and control on delivery, and thus save you time to generate more sales by focusing efforts on growing your business.
With these evergreen approaches, you can build a sustainable supply chain, one that is resilient, environmentally conscious and helps take your e-commerce business to the next level, even during these unprecedented times.
---
Luke Li joined the Redress Design Award Alumni Networking Event in June 2020 to share insights with the growing body of sustainable fashion designers who have previously taken part in the Redress Design Award and many of whom have their own emerging brands. UPS is a long term supporter of the Redress Design Award, now celebrating six years of partnership for the 2020 cycle. UPS provides essential carbon neutral logistics support for our finalists’ collections to reach Hong Kong, and for our international exhibitions. Find out more on how UPS is helping customers pioneer more sustainable solutions here.