E-commerce in Poland is hot. Over the last few years, we have been observing a trend of gradual replacement of traditional sales channels by the e-tailers and the trend seems to be accelerating.
The last nine months have accelerated the development of this trend even more. Current players are increasing their sales, and thanks to low entry barriers (there is no need to maintain a stationary outlet or service it), new entities appear on the market. The transformation of trade does not mean, however, that traditional sales will disappear any time soon. On the contrary, these two sales channels – traditional and electronic – will complement each other, in line with the Omni channel concept, which involves the integration of not only sales channels, but also communication, delivery and returns.
Logistics plays a role in this integration, which is not only coordinating but also influencing processes. It enables both channels to keep existing customers (through the availability of goods, on-time deliveries, etc.) and to attract new customers (through offering a convenient form of delivery, free and extended return terms). These processes can be performed independently, but also outsourced to external companies – fulfilment operators.
There are various entities offering fulfilment services in Poland – from international concerns, through logistics companies, to small specialized local entities. Many service providers offer fulfilment as an additional service to their business. Some of them start this type of activity based on the experience of their own e-shop and extend it to other entities. Large logistics companies offer fulfilment, based on the scale of orders, adequate to their core business, but are often not flexible to the needs of smaller e-shops.
An additional difficulty for logistics operators who previously only offered contract logistics is the different specificity of the market. E-commerce entities are a different group of customers than contract logistics service users. As a rule, these are small enterprises that have a fairly wide range of products, but in a very small amount. Their customers usually order individual goods and their geographic location varies greatly.
Research commissioned by GS1 Polska and carried out by Last Mile Expert’s friend, Prof. Arkadiusz Kawa, has shown that fulfilment operators are a very important link in the e-commerce supply chain. They support Polish enterprises not only in ongoing logistic operations, but also in their development. There are about 60 players right now, but their number is constantly increasing. E-fulfilment players mainly serve online stores, of which there are more than 32 thousand in Poland, but also online sellers without a formalised store but which are much more numerous.
Experts say that the Polish fulfilment market is still at a relatively early stage of development, but it has great prospects ahead. Our research shows that only 30% of online stores use fulfilment services for goods sold on the Internet. Those who use these services are satisfied and state that the key benefits for them include time saving and increased quality of logistics and fulfilment services.
Other arguments in favour of outsourcing in warehouse and last mile logistics are convenience and greater development opportunities in new markets. The remaining 70% of companies that do not use fulfilment services cite many reasons, the most important of these is the desire to keep everything under control. Online retailers believe they can better respond to customer needs and want to have direct contact with the goods. It seems that this trend is changing, though, with almost 27% of online store managers intending to outsource their online logistics for goods sold within the next three years.
If you are interested in finding out more, the entire report can be seen here (in the Polish language)