E-commerce Boom in Australia: Adapting Supply Chain Strategies for Last-Mile Delivery and Fulfilment

The e-commerce boom in Australia has revolutionised the supply chain industry, necessitating significant adaptations to meet the evolving demands of online consumers. As a leader in the supply chain and logistics industry, IFC are proud to demonstrate successful strategies for all stages of fulfilment, including last-mile delivery.

What is the e-commerce boom in Australia?

E-commerce in Australia has experienced rapid growth, driven by factors such as increased internet penetration, convenience, and changing consumer behaviour. Australian consumers are increasingly embracing online shopping, leading to a surge in e-commerce sales across various sectors, including retail, electronics, fashion, and groceries; the Covid-19 pandemic has further accelerated this adoption, as lockdowns and social distancing measures prompted consumers to shift towards online shopping.

How is e-commerce in Australia changing?

According to Australia Post’s, Inside Australian Online Shopping report, e-commerce sales in Australia reached AUD 50.46 billion in 2020, representing a significant 57% increase compared to the previous year. The report also highlighted that the e-commerce sector accounted for around 16.3% of total retail sales in Australia, indicating its growing importance in the retail landscape.

E-commerce has shifted consumer expectations, with increased demand for faster, more reliable, and more convenient delivery options. Consumers now expect seamless online shopping experiences, including user-friendly websites, mobile apps, secure payment options, and personalised recommendations. The ‘Amazon effect’ has also influenced consumer expectations, putting pressure on retailers and logistics providers to offer competitive pricing, fast shipping, and flexible return policies.

What are the challenges posed to last-mile delivery providers?

The e-commerce boom has put pressure on last-mile delivery networks due to higher package volumes and intricate routes. Logistics providers have improved operations, invested in technology, and partnered with third-party delivery services to cope. Innovations like drones, lockers, click-and-collect, and fast delivery have emerged to enhance last-mile efficiency.

What challenges do warehouse and fulfilment teams face?

E-commerce growth has increased demand for warehousing and fulfilment centres, as businesses require adequate space to store and process online orders. Traditional warehousing models have evolved to accommodate e-commerce fulfilment needs, adopting technologies such as warehouse management systems (WMS), robotics, and automation to improve efficiency and order accuracy.

How can supply chain managers meet these growing demands?

Supply chain professionals are working to meet e-commerce demands by optimising inventory, improving demand forecasting, and enhancing visibility. Supply chain professionals also use AI, machine learning, and data analytics for real-time insights, streamlined processes, and customer responsiveness. E-commerce has also raised product return volumes, requiring efficient reverse logistics.

What strategies has IFC developed to meet these challenges?

IFC has developed two award-winning strategies to address many of the challenges posed by the changing landscape of e-commerce in Australia: the ‘direct-to-store’ and ‘e-commerce’ logistics models.

The ‘direct-to-store’ model involves offshore processing and consolidation, followed by sending store-ready palleted orders directly to each Australian state for immediate delivery to stores. This strategy dramatically reduces production lead times, simplifies stock ordering, and facilitates sales and marketing planning by utilising the readily accessible inventory.

The ‘e-commerce’ model is flexible and adapted to each customer’s needs. IFC actively partners with e-commerce retailers to deliver tailored supply chain solutions. Leveraging our extensive network of warehouses and vehicle fleets, we have achieved a remarkable success rate of over 99% for a home furniture client. This achievement has empowered us to offer our clients the convenience of four-hour metropolitan delivery options. The notable advantage of this efficient model is that customers enjoy a superior delivery experience that surpasses their expectations.

By creating tailored supply chain solutions, we can help our clients to overcome challenges of last-mile delivery and fulfilment and meet the changing needs of customers.

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