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International Retailing: Logistical Challenges and Opportunities

By Emily Peagram 27 Apr 2021

Global eCommerce platform Kooomo advises on why success for retailers hoping to go international hinges on their logistics strategy

The pandemic has resulted in changing consumer behaviours which have brought about new opportunities for retailers – particularly when it comes to going global - but these retailers will only succeed in the space if they ensure they have a strong logistics strategy. This is according to global eCommerce platform provider Kooomo, which outlines that while the international eCommerce landscape will never be the same again, those who capitalise on these changes will thrive into the future.

Ciaran Bollard, CEO of Kooomo explains: “Until the pandemic, international eCommerce logistics networks were primarily designed to get goods from warehouses to store shelves. However, coronavirus has accelerated eCommerce requirements by almost 5 years, meaning, this already lagging system has had its weaknesses exposed and magnified. This has resulted in some significant logistics challenges including: poorly optimised processes, supply chain fluctuation and maintaining reputation.”

With this in mind, Ciaran outlines the challenges and opportunities for each of these key areas:
Human error is an unavoidable part of life - no matter what industry or position you work in, at some stage your processes will be subject to a hiccup. The trouble for retailers hoping to sell internationally, is that a small mistake could result in a significant loss of productivity and profit. The more information you store and transfer, the likelihood of human error increases. Manual management of information and processes can also create enormous overheads and is extremely time-consuming. Automated inventory management is the obvious answer, with most of your business’s repetitive tasks and backup system processes. However, in a recent survey, a little over a third of retailers[1] stated that the main issues that arise with cross-border selling are poor system integration.

  1. Human Error and Process Optimisation

The opportunity here is to centralise all of your information and communications onto one commonly shared logistics platform. This can massively reduce the chances of human error. Automated tasks reduce the risk of mistakes and a moderate workload can help employees carry out their tasks to a higher standard. It can also provide “one view of the truth” that’s constantly updated with the latest data. This helps enormously with managing data, understanding issues and ensuring all stakeholders understand what’s happening.
Throughout 2020, we saw fluctuations in demand across all industries. As we locked down from March, we saw a sharp rise in the demand for safety equipment, household essentials and homeware. Almost a quarter of British retailers reported severe disruption to their supply of goods, with only 7% of retailers having the flexibility to switch their suppliers.

  1. Supply chain fluctuations

Many retailers who relied on Amazon for supply also found themselves in bother last year, when the marketplace decided to halt shipments of all goods other than PPE and essential equipment. Therein lies the challenge for retailers who don’t have full control over their supply chain.

This therefore presents an opportunity to initiate a D2C strategy as an international company can provide retailers with significant control over their supply chain. This also allows brands to boost their online sales even more by getting a clear, first-hand look into their customers’ buying behaviour.

D2C and digitally native brands had the upper hand when it came to responding to the pandemic. They had an ability to fast-track customer engagement initiatives that were already underway pre-covid. As a result, D2C brands surveyed by Totem Media reported 58% fewer sales declines than traditional retailers since the onset of the pandemic.

Grocery retailers in particular, dealt with significant out-of-stock situations on many key products as consumers snapped up supplies. Therefore, the ability to predict and manage demand has never been more important. This will involve centralising stock orders, automating order processes and a quality DOM system.
Has the pandemic had a massive impact on your customer and the customer relationship? A McKinsey report found that more than 75% of consumers have tried new brands, places to shop, or methods of shopping during the pandemic.

  1. Maintaining reputation

This is down to a number of factors, most notably friction in the supply chain. For example if brands were out of stock of particular items consumers explored new websites/companies to find them. How do you maintain trust in your brand and your products and services and how will you recover the customer experience in the future?

Consumers have become increasingly conscious of their purchasing with lockdown sparking a movement of belief-led buying. A recent study revealed that 75% of consumers are more likely to favour brands who had clear and frequent communication during the pandemic, showing that the consumers are aware and listening.

It is vital for retailers to frequently and consistently update their consumers on store policies, hours, and more to show their commitment to the consumer’s best interests, health, and safety. This communication will build trust and loyalty between the consumer and the retailer.

Retailers also now have the opportunity to ease pressures as consumer behaviours turn towards items arriving on time instead of “the next day”. With more people working from home, windows for delivery are much broader - in fact, only 3% of shoppers state “next-day delivery” a must have. However, 96% of shoppers want tracking notifications on their deliveries, which means there’s been a shift from speed to reliability.

Retailers should assess their warehouse management systems and make improvements towards order trackability from all points of sales (POS). This will result in visibility over customers’ orders ensures a smooth customer experience. If international retailers can create an ethical, transparent and reliable journey, they are on to a winner.

Ciaran concludes, “Retailers should no longer be weary of the idea of global expansion in a pandemic. We have come a long way since March 2020 and while the aftershocks are still being felt, the key issues are exposed and ready to be adjusted.

In fact, retailers can now be hopeful that with the accelerated shift to eCommerce the means for improving their logistics strategies are readily available. Optimisation, demand and reputation can be easily managed with powerful eCommerce platforms. Retailers should take the time to ensure that their eCommerce are flexible and ready to grow with them.”

If you’re interested in understanding more about taking your business to new markets, contact the Kooomo team to discuss further.

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