aldo d'agostino,dhl global mail - e-commerce growth: opportunities & challenges for the...
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Aldo D’Agostino, Head of Sales, Oceania, DHL Global Mail presented this at Online Retail Logistics 2013. The conference focused on ways to create efficient supply chains to support the increase in online shopping. For more information, visit http://www.informa.com.au/onlineretaillogistics13TRANSCRIPT
E-commerce Growth: Opportunities and
Challenges for the Logistics Industry
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Agenda
1. Gauging the global e-commerce opportunity
2. The impact of delivery choices on e-shopper buying behaviour
3. Challenges for the Logistics Industry
4. Where to from here?
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Global e-commerce market size
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Source:eMarketer
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With the globalization and internationalization of companies,
cross border online shopping is growing significantly.
Global cross-border online shopping will be worth $105
billion this year, with 94 million consumers regularly buying
from overseas websites.
4
Source: Paypal Report, Modern Spice Routes: The Cultural Impact and
Economic Opportunity of Cross-Border Shopping, July 2013
Global e-commerce market size
By 2018, it is expected to grow nearly 200% to $307 billion,
with 130 million cross-border online shoppers.
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Global e-commerce market size
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Australia is one of the world’s six key shopping destinations for cross-border
shopping, accounting for 16% of international online sales.
Source: Paypal Report, Modern Spice Routes: The Cultural Impact and
Economic Opportunity of Cross-Border Shopping, July 2013
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Agenda
1. Gauging the global e-commerce opportunity
2. The impact of delivery choices on e-shopper buying behaviour
3. Challenges for the Logistics Industry
4. Where to from here?
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Consumer delivery expectations
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Consumer delivery expectations
• E-commerce and Delivery - A study conducted by Copenhagen
Economics between 10th and 30th January 2013 with 3,077 e-shoppers, 70
e-retailers , 61 delivery companies and 26 national postal regulators in EU.
• This study analyses how delivery of products bought online can be
improved to increase the amount of domestic and cross-border e-
commerce in Europe. Improving delivery services is an important driver to
enhance e-commerce*.
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*This presentation focuses only on the e-shopper perspective
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0% 20% 40% 60% 80% 100%
Low delivery prices
Convenient return options
Free delivery
Flexible and convenient delivery
Delivery within 2-4 days
Accurate delivery date (delivery on pre-definedday)
Electronic delivery notification (e-mail or SMS)
Track n'Trace shipments
Next day delivery
Important features for shopping from same web shop again
Source: Copenhagen Economics, E-shopper survey
Consumer delivery expectations
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Source: Copenhagen Economics, E-shopper survey
0% 20% 40% 60% 80% 100%
Delivery to the home address
Delivery to the post office
Having ability to redirect the parcel to a different point
Delivery to neighbor in case that one is home at thedelivery time
Delivery to relay point (shop)
Delivery to relay point or parceol kiosk specified byyou
Delivery to work adress
Delivery to parcel kiosk (automated locker)
Importance of point of delivery for e-shoppers
Consumer delivery expectations
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
Free delivery
Standard delivery
More convenient but more expensive delivery thanstandard delivery
Faster but more expensive than standard delivery
Importance of price options for e-shoppers
Source: Copenhagen Economics, E-shopper survey
Consumer delivery expectations
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
Electronic delivery notification (e-mail or SMS)
Track n'Trace
Insurance related to delivery
Cash on delivery
Extra service at delivery, e.g. installation ofproduct bought
Importance of value added feaures for e-shoppers
Source: Copenhagen Economics, E-shopper survey
Consumer delivery expectations
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Source: Copenhagen Economics, E-shopper survey
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
Take return parcel to a post office/ collectionpoint
Track n' trace of return parcel
Organize a specific picuk up with the deliveryoperator
Take the return parcel back to a physicalstore(same as webshop)
Return product immediately at the moment ofdelivery
Importance of return options for e-shoppers
Consumer delivery expectations
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The impact of delivery on shopping cart abandonment
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Source: Copenhagen Economics, E-shopper survey
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0%
5%
10%
15%
20%
25%
30%
35%
40%T
ime o
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Poin
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Info
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Share of e-shoppers dissatisfied with delivery aspects
Note: Horizontal line shows the average level of dissatisfaction (18 per cent).
Source: Copenhagen Economics, E-shopper survey
18%
Consumer satisfaction
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Agenda
1. Gauging the global e-commerce opportunity
2. The impact of delivery choices on e-shopper buying behaviour
3. Challenges for the Logistics Industry
4. Where to from here?
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Challenges
• E-shoppers have an almost infinite choice in terms of what they can buy,
where they can buy it, and when they can buy it.
• E-shoppers expect similar choice and control when it comes to delivery of the
products bought. When shopping online, e-shoppers buy both a product and a
delivery service.
• Delivery operators need to develop customer-oriented delivery solutions that
offer convenient delivery options at reasonable prices.
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The e-commerce delivery value chain
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E-shoppers: Buy products and
delivery services from e-retailers;
E-retailers: Buy services from delivery
operators and logistics intermediaries;
Delivery operators: Deliver the products
on behalf of the e-retailers. Delivery
operators may use other delivery
operators as subcontractors.
Logistics intermediaries: Operate in
the intersections that exist between
e-shoppers, e-retailers and delivery
operators.
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Problems that might occur along the value chain
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Step in value chain Example of problem
1. Order placed Inadequate information provided at e-retailer’s website. Lack of
customer-oriented delivery options (speed, price, value added
features etc.). Lack of transparency.
2. E-retailers choose
delivery partners, delivery
mix and delivery prices
High delivery prices faced by e-retailers and/or e-shoppers. Limited
access to logistics intermediaries. Preferred services not available
from delivery operators.
3.Pick-up of products No notification of pick-up sent to e-shopper.
4.Domestic/cross-border
delivery
Lack of tracking, long delivery times. Lacking interoperability between
delivery operators. Lack of transparency.
5. Last mile delivery High share of failed first delivery attempts, inconvenient collection
procedures (e.g. opening hours, parking facilities), mismatch between
e-shopper’s expectations and delivery performance.
6. Return process Complicated and/or expensive return procedures. Difficult to find
information about returns on e-retailer’s website.
Even the best online shopping experiences could
be tarnished by delivery problems!
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The impact of e-commerce growth on the logistics industry
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Source: IPC
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The need for information (tracking, e-mail notifications etc.) requires
investment in technology.
Growth in air cargo demand, including express cargo and general air cargo,
requires investment in infrastructure to keep up with the growth.
I.e. Cathay Pacific Airways put on a number of extra flights and charters
in order to meet air cargo demand, buoyed by new products from
Apple, Samsung and Microsoft.
Domestic carriers need to adjust to the increase in parcel volumes vs.
declining mail volumes. Having principally moved goods between
business customers not so long ago, they are now the agents of e-
commerce, helping retailers move an increasing volume of online purchases
to consumers.
Growing consumer expectations in terms of delivery choices and places
require logistics companies to rethink their delivery model.
The impact of e-commerce growth on the logistics industry
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Agenda
1. Gauging the global e-commerce opportunity
2. The impact of delivery choices on e-shopper buying behaviour
3. Challenges for the Logistics Industry
4. Where to from here?
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The aspects of delivery found to cause the greatest dissatisfaction to the
consumers were:
Complaints made to the e-retailer (30% e-shoppers unsatisfied)
Returns (26% e-shoppers unsatisfied)
Delivery prices (21% e-shoppers unsatisfied)
Delivery speed and value added delivery services (16% e-shoppers
unsatisfied)
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Where to from here?
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The research by Copenhagen Economics reveals that the most important
aspects of delivery for e-shoppers are:
Delivery to the home address at a convenient time (mentioned by at least
90% of e-shoppers)
Low delivery prices (mentioned by at least 85% of e-shoppers)
Access to electronic delivery notifications and track and trace (mentioned
by at least 80% of e-shoppers)
Convenient return options (mentioned by at least 80% of e-shoppers)
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Where to from here?
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Q&A Time
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Aldo D’Agostino
Head of Sales, DHL Global Mail
Mobile +61 413 885 116
Thank you!
To download the E-commerce and Delivery study go to :
http://ec.europa.eu/internal_market/post/doc/studies/20130715_ce_e-commerce-and-delivery-final-report_en.pdf
DELIVERING SUCCESS. WORLDWIDE.