E-Commerce 2.0: Moving Beyond Parcel
The 21st century has brought about major changes and advancements for e-commerce, defining its first phase. “E-commerce 1.0” ushered in off-the-shelf solutions that automated transactions and fulfillment for a number of goods. The meteoric rise of multinational giants like FedEx, UPS, Amazon.com, and Stripe have made buying and receiving shipments a breeze for the average consumer. In 2015, FedEx said, “What made the rise of the micro-multinational possible is the reality that, in the 21st century, you don’t have to be big to go global. Today, all you need is a mobile device, a shipping platform, and a big idea.” Those words are truer today than ever before.
However, what about the goods that these parcel solutions can’t handle via existing automated capabilities? Right now it’s nearly impossible to find domestic two-day shipping for fine art, anything of relatively high value, or items requiring white-glove services. Creating off-the-shelf solutions that allow for global transactions and fulfillment of these traditionally more “difficult” items to fulfill is the next big opportunity that will ultimately transform global commerce and create “e-commerce 2.0.”
Consumers today have an almost inherent expectation that the items they purchase online will arrive quickly, safely and efficiently, driven largely by Amazon Prime’s two-day shipping model. As other major retailers like Walmart added two-day shipping options to compete with Amazon, consumers have become conditioned to expect nearly instant gratification. Amazon’s strategy is working. The Seattle-based online retail giant's market share of the total U.S. e-commerce retail market is getting closer to 50 percent each year. Amazon quickly realized a short delivery timeline was so integral to its rise to the top that it built its own logistics operation to ensure delivery promises were met. Amazon now has ownership over its supply chain, and its growing operation has allowed the retailer to raise the standard yet again by offering free one-day shipping for Prime members.
However, there are limitations as to what type of items these parcel solutions can service. They're designed for goods that fit one of four basic characteristics: low value, small, non-fragile, and/or not needing extra services. For goods that don’t fit these characteristics, there are few to no automated solutions to help enable and catalyze a growing trend towards buying items that require white-glove logistics online.
This emerging e-commerce phenomenon is characterized by buying and selling goods that have opposing characteristics to parcel goods — e.g., items that are high value, fragile, oversized or heavy, or require additional collection or delivery services such as custom packing or installation. Consumers are becoming more comfortable buying these types of items online, and sellers are jumping to capitalize on this trend.
The next wave of global e-commerce, “e-commerce 2.0,” will need to be created in a way in which any item, whether heavy, oversized, fragile, etc., can seamlessly be bought and sold online.
Adam Fields is founder and CEO of ARTA Shipping, provider of innovative technology and fulfillment solutions for global white-glove logistics.
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