Lack of supply chain maturity holding e-commerce growth back, says GEODIS

GEODIS has warned that the maturity of some omnichannel retail offerings could hold back e-commerce growth, particularly when it comes to a lack of real-time supply chain visibility.

Some 59% of European companies, and 46% of American companies, relied on online marketplaces for sales. These marketplaces held a 28% market share in the pre-Covid-19 period, rising to 38% during the pandemic.

“Direct sales from brands’ retail websites currently represent 5% to 8% of online sales,” said Sohel Aziz, managing director at Accenture Interactive. “Brands would like to increase that to 20% or 30% in the next three to five years.

“The survey shows that brands are aware of the fact that improving their omnichannel logistics capabilities, such as customer experience – through customisation of delivery options and tracking or customers’ ability to modify orders, for example, is essential and urgent if they are to reach this goal.”

Some 76% of American companies and 56% of European companies surveyed wish to sell directly to consumers via their own websites, aiming to achieve 20% of total sales via e-commerce within the next three years.

A majority of brands surveyed believed that over-reliance on marketplaces is not sustainable and wish to shift more of that balance toward owned e-commerce channels. Nearly two-thirds (64%) stated that reducing their dependence on marketplaces is their first or second priority for the next six months.

The survey also found that 16% of businesses were able to get real-time key performance indicators for their supply chain ( with 25% of American brands and 10% of European brands saying they had such visibility).

Ashwani Nath, Global Head of E-Channel Solutions at GEODIS, said: “Only a minority of them have real-time supply chain inventory visibility. However, this visibility is essential to ensuring product availability, offering a variety of shipping choices and informing the customer of the product’s shipping status.

“Behind the scenes, this means optimising the logistics cost for each order and overcoming many logistical challenges: reconciling the physical with the digital, maintaining a real-time inventory, optimising stock, managing transportation, orchestrating orders while dealing with a variety of processes and partners. This will help brands to better utilise their physical assets and gain a competitive advantage.”