TRANSPORTATION
E-Commerce and Logistics Set for Global Growth
The primary focus of the Deutsche Post DHL Study is on trends and developments which are already highly significant and which will have a growing influence on consumerism, retailing and logistics in the course of the next eleven years. By Deutsche Post DHLin
June 26, 2014
Over the next ten years, online retail will gain even more importance than expected so far - not just in developed countries, but also in emerging markets.
Logistics will play a key role: it provides companies important competitive advantages, such as deliveries within a few hours on the day of ordering, flexible receiving and return times as well as resilient logistics and value-added concepts in emerging countries.
This is one of the key findings of the “Global E-Tailing 2025” study, initiated by Deutsche Post DHL with participation of the trend research institutions Z_punkt as well as numerous international experts from retail, logistics and academia.
It is the first global scenario study on cross-border online commerce and its implications for the logistics industry.
In four scenarios the study shows what the electronic world of shopping around the globe could look like for consumers and businesses in the near future.
The different future projections are based on a detailed analysis of the most influential factors - from energy and raw material prices to technological, political and social factors to retail and consumption patterns.
The scenarios also outline possible effects of changes to society’s value system by 2025.
The research examined selected developed and emerging markets around the world. Trend scouts also studied purchasing and logistics trends in 12 international metropolises - among them New York, Moscow, Bangalore, Jakarta and Lagos.
The Dynamics of an Internet Nation
The forecast for what is still the world’s largest economy is a clear indication that even the global leader can provide powerful impetus for growth. GDP is set to grow by 43 percent and Americans can look forward to a one-third rise in disposable household income. Although the USA is a mature industrialized nation, a relatively significant increase in population is predicted for 2025, namely 13 percent, i.e. three times higher than in western Europe. Without doubt, this will give strength to the dynamic economic growth which is anticipated. As the cradle of the digital era, the country has had a very high level of Internet usage from the outset – and it still has: more than three-quarters of the population have access, 27 percent via broadband. The proportion of Americans with mobile Internet access is close to 50 percent. This is reflected in the very large volume of online retailing, which exceeded $300bn in 2011.
The forecast for what is still the world’s largest economy is a clear indication that even the global leader can provide powerful impetus for growth. GDP is set to grow by 43 percent and Americans can look forward to a one-third rise in disposable household income. Although the USA is a mature industrialized nation, a relatively significant increase in population is predicted for 2025, namely 13 percent, i.e. three times higher than in western Europe. Without doubt, this will give strength to the dynamic economic growth which is anticipated. As the cradle of the digital era, the country has had a very high level of Internet usage from the outset – and it still has: more than three-quarters of the population have access, 27 percent via broadband. The proportion of Americans with mobile Internet access is close to 50 percent. This is reflected in the very large volume of online retailing, which exceeded $300bn in 2011.
These consumer insights anchor the scenarios in today’s world and increase their plausibility.
The Four Scenarios
The scenario method is an ideal means of developing alternative visions of the future. The objective is to spur people’s imagination and give them new perspectives.
The scenario method is an ideal means of developing alternative visions of the future. The objective is to spur people’s imagination and give them new perspectives.
Accordingly, the scenarios do not simply carry the current situation forward into the future: they consciously reckon with upheavals and discontinuities. With this description of very diverse development paths, the future scenarios generate an awareness of possible changes in the business environment.
They invite the reader to consider the risks and opportunities involved, as well as the strategies and possible courses of action. The result is a valuable mental exercise and a thought-provoking assessment of possible future developments.
Scenario 1 – Hybrid Consumer Behavior in Convergent Worlds of Retailing
Against a background of moderate economic growth, the achievement-oriented society has been firmly established worldwide. In many of the developed economies, such as Australia, France or the United Kingdom, social contrasts have increased.
Against a background of moderate economic growth, the achievement-oriented society has been firmly established worldwide. In many of the developed economies, such as Australia, France or the United Kingdom, social contrasts have increased.
Technological progress has only been moderate. Smartphones and tablets are still people’s constant companions. They have flexible screens which can be rolled out, folded and flipped up. Interactive displays are ever-present in city streets, serving as interfaces to the virtual world. Retail companies offer their goods online and in stationary stores – multichannel retailing has become established.
In many cases stores merely have the function of showrooms where customers can “experience” the goods. Prompt delivery to any specified location is a standard service. For all who can afford it, convenience is a decisive factor as far as shopping is concerned. But for the vast majority of people, it is still price which ultimately matters most.
Scenario 2 – Self-Presentation in Virtual Communities
People are prospering. For the first time in history, a middle class with a comparatively strong purchasing power has developed worldwide. This has been accompanied by a shift in values, with the focus on leisure time rather than on work. Self-fulfillment and individual lifestyles are more important than success in one’s job.
People are prospering. For the first time in history, a middle class with a comparatively strong purchasing power has developed worldwide. This has been accompanied by a shift in values, with the focus on leisure time rather than on work. Self-fulfillment and individual lifestyles are more important than success in one’s job.
Trends are mainly set by international lifestyle communities. They have a strong influence on the shopping habits of broad sections of the public. Small, innovative online retailing platforms serve the different communities, while large online retailers and platforms take care of the mainstream market. Stationary retailing is principally focused on “experience” shopping.
So-called wearables are a standard feature of everyday life. One of the main purposes of this portable technology is to measure and optimize one’s own actions – in relation to nutrition or fitness, for example – and to continually exchange information and experience within the community.
As a result of the boom in online retailing, the volume of goods transported by the logistics companies has increased substantially. To prevent complete gridlock, a number of conurbations have brought in stricter regulations for the delivery of goods.
Scenario 3 – Artificial intelligence in the Digital Retailing Sphere
The main driving-force behind the global economy is the dynamism and innovative flair of information technology. People are living in a highly developed digital culture. Data glasses, smart contact lenses and other wearables have become indispensable parts of everyday life.
The main driving-force behind the global economy is the dynamism and innovative flair of information technology. People are living in a highly developed digital culture. Data glasses, smart contact lenses and other wearables have become indispensable parts of everyday life.
Intelligent avatars serve as virtual shopping advisers. Often they act independently and “purchase” everyday goods, for example. Web shops adapt their offerings to customer profiles in real time; the avatars present supposedly interesting products to their users in “personal shopping hubs”. Stationary retailing and the showrooms of the online shops also operate with simulations which are tailored to customer’s requirements.
Same-day delivery is standard practice in major cities. Retailers and logistics companies can often predict requirements on the basis of precise customer data. They send off the goods – in some cases via automated solutions such as drones – even before the customer has ordered them.
Scenario 4 – Collaborative Consumption in a Regionalized Retailing Landscape
The global economy is stagnating. Trade barriers and high energy and raw material prices have led to a regionalization of the economy. People buy locally, as a rule. Sustainability and energy efficiency are the pivotal factors in shopping. Leasing and sharing models are therefore very common. The importance of personal possessions has diminished significantly for many people. Availability is what really matters.
The global economy is stagnating. Trade barriers and high energy and raw material prices have led to a regionalization of the economy. People buy locally, as a rule. Sustainability and energy efficiency are the pivotal factors in shopping. Leasing and sharing models are therefore very common. The importance of personal possessions has diminished significantly for many people. Availability is what really matters.
Major online portals are mainly involved in leasing business. At regional and local level, a large proportion of swapping transactions are organized via smaller online platforms. Electronic equipment and consumer goods are modular in design so that their useful life can be prolonged.
This facilitates both repair and maintenance. In addition to the traditional delivery solutions, the majority of logistics firms offers spare parts logistics as well as repair services.
From a highly developed digital culture to Do-It-Yourself
today’s emerging markets will be the engine of growth 11 years from now. A strong global economy and a stable middle class will have established a true “Everywhere Commerce”. Consumers will receive their purchases much faster than today, with Express shipments being delivered in less than 24 hours and measured in minutes. In a different scenario a highly developed digital culture has evolved, in which almost all products will be sold online and consumers will receive support by avatars. To protect manufacturers from counterfeit, logistics companies will offer protected supply chains.
However, the study not just portrays positive future projections of worldwide e-tailing, but also possible crisis scenarios. Scenario four outlines how the worldwide consumption patterns develop after the global economy will have suffered another financial crisis and energy and raw material prices have risen considerably. Under these circumstances, people could adopt a Do-It-Yourself mentality instead and sharing models instead of the “all new” approach.
Changed consumer behavior influences retail sector
The scenario analysis is supplemented by multiple essays from renowned logistics experts: Prof. Dr. Dirk Moschett of Fribourg University in Switzerland underpins the necessity for all of society to bundle supply flows more efficiently. Professor Geritt Heinemann, of the University of the Lower Rhine elaborates in his “E-Pace” contribution on the importance of timing for the success of online retail. Professor Shashi Matta of Ohio State University analyses how changes in consumer behavior, e.g. trends such as sustainability or crowd-shaping, affect online retail. Best practice solutions, which Deutsche Post DHL already implemented for electronic retail, showcase the range of solutions and service in logistics.
The scenario analysis is supplemented by multiple essays from renowned logistics experts: Prof. Dr. Dirk Moschett of Fribourg University in Switzerland underpins the necessity for all of society to bundle supply flows more efficiently. Professor Geritt Heinemann, of the University of the Lower Rhine elaborates in his “E-Pace” contribution on the importance of timing for the success of online retail. Professor Shashi Matta of Ohio State University analyses how changes in consumer behavior, e.g. trends such as sustainability or crowd-shaping, affect online retail. Best practice solutions, which Deutsche Post DHL already implemented for electronic retail, showcase the range of solutions and service in logistics.
All scenarios and contributions have in common that the competition in electronic retail, whether on global, national or regional level, will become more intense. Jürgen Gerdes: “We don’t know for certain what the world will look like in 2025, but the study’s various scenarios show how rapid the global retail sector - online and offline - is changing and that logistics will be a focal point of these change processes.”
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