The holiday season is usually the busiest time of the year of the market. With the previous two years amidst the lockdown, we have seen an increase in e-commerce. Much of this increase in e-commerce is owed to easy access to the internet of the masses and the coronavirus situation. 2021 saw one of the biggest influxes of online retail orders. eMarketers expected online spending to exceed $930 billion in 2021, as compared with the $792 billion spent on online retail in 2020. Amazon alone has profited 220% more than the previous three years, so much so, there were speculations that Jeff Bezos might be crowned “The World’s first Trillionaire”.
With the rise in digital marketing, consumers are buying all sorts of products online.
E-commerce trends for 2022:
There have been a shift in people buying groceries and perishables online thanks to Covid-19. Shoppers are using buy-online-pick-up-in-store (BOPIS) to collect groceries and other products. What’s interesting, this deviation in shopping habits is here to stay in 2022. Adobe reports that it expects an increase in online consumption to exceed up to $1 trillion.
Owing to no signs of pandemic protocols easing any time soon, people will most probably go for buying food and meal kits online. This is in contrast to the pattern seen prior to Covid-19, more than half of most Americans’ food budgets went toward restaurants.
The new situation has provided people to enter the market and create their own monopoly. One of the soaring trends is the subscription boxes. This service experienced gargantuan growth in the aftermath of the pandemic.
As with all e-commerce, subscription service demands are only going up. They are expected to be a competitive market in the year 2022. IMARC group reports that subscription services and products were worth $18.8 billion in 2020 alone. This service is expected to reach a peak by 2026 where its worth is estimated to increase by a staggering 20% per year! What’s more is the report also shows the spending to increase dramatically on meal kits and food, other than technology and alcohol. What a time to be alive!
Statistics like the above look promising for newcomers to enter the subscription meal market. We have to agree, where Covid-19 has absolutely broken us in every aspect, it has also provided numerous opportunities to the go-getters of our society.
The Five Big Questions:
Companies who are looking to expand their subscription services or those who have just entered this booming market, find it difficult to hire the right logistics for their business. There is a number of things to keep in mind for your business to flourish, such as order management and fulfillment, packaging requirements, and transportation. The most vital bit of advice we can give you is, as a food retailer, you must stay on top of temperature requirements. We realize this seems more like a demand but it is exactly what it is a demand. The number one reason for food and other perishables to rot and go bad between transport is inadequate to control of temperature.
To our good luck, there is an answer to all the problems and it doesn’t involve managing logistics yourself or giving up on new business ventures absolutely. Food e-tailers can hire a third-party logistics provider (3PL) for the supply of their products. Vendors provide a number of services that are not limited to transport and may also include fulfillment, storage, order management, procurement, and transportation. A similar model is followed by Walmart but I digress. These third-party logistics providers or 3PL have a department dedicated to logistics and are exclusively designed to undertake any and all challenges. This leaves you at ease to devote your time and energy to your booming business.
However, as with any task finding the right 3PL comes with its own challenges. To begin with, choosing a logistics partner takes a lot more than merely a stroll on the internet. The biggest search engines on the worldwide web fail to provide a complete list of 3PLs. These firms do not have many reviews and some, unfortunately, don’t have an online presence, to begin with. When you don’t know where to look for a 3PL, finding one can be challenging. It is a whole other process to choose one.
You can find the right logistics partner by asking the right questions. Here are the five most important questions you need to ask:
1) What is their experience with temperature-sensitive items?
Cold and frozen perishables need additional maintenance and a basic set of knowledge besides the common logistics threats. Request what temperature-sensitive items a 3PL you are considering has worked with previously. A prospective vendor must be intimate with different packaging materials. They must also understand what products can be packaged together. A 3PL must have advanced expertise in this area.
2) What are their protocols for food safety?
Safety is essential to your consumers’ health. You don’t want your customer to suffer at the hands of the logistics firm. All it takes is one spoiled or allergen-containing package to get a bad review. Repairing the damage caused by one bad review is an expensive process. To save yourself and most importantly, your customer from a bad experience, ask 3PL you are considering if they have received their Safe Qualified Food certification. Their facility needs to be in compliance with the FDA’s Food Safety Modernization Act.
3) Who are their previous clients?
You don’t like to be a guinea pig, nobody does. You need to find out all their previous and current clients and brands to get an idea of their success with food transport. Your logistics partner simply can’t make any compromise on temperature-controlled products. Don’t hesitate to ask.
4) Can you grow in your target market?
Is your logistics partner in close range to your target consumers? Frozen food items have a two-day window to be delivered, after that, they begin to thaw and spoil. Your logistics partner needs to have a plan to avoid food spoilage.
5) Will they grow with you?
This is an important question to ask for start-ups and the companies who are involved in direct-to-consumer shipping. Many logistics companies tend to move with already established and large companies, who provide an annual estimate of business. You need to find a 3PL vendor who is willing to accommodate and grow with you.
Finding the right logistics for your company seems like a difficult task, but it doesn’t have to be. Asking these questions is a sure way to find a logistics partner that best suits your needs. Rest assured, you are heading in the right direction in your successful venture in years to come.