Retail ecommerce increased by 75% in 2020 in Canada and is on track to expand by another 12% in 2021, according to eMarketer. This year, ecommerce will account for 13.4% of the country’s retail sales—up from just 6.9% in 2019, before the pandemic shifted consumer behavior over to buying more online. This shift isn’t expected to wane anytime soon, and it’s forcing shippers to rethink their business strategies as they tackle current challenges and plan for the future.
For example, retailers are investing in digital platforms to reach consumers dispersed over a vast land mass while responding to competition from global e-tailers. The International Trade Association says fashion is currently the leading product category, followed by electronics and media.
“Canadian consumers increasingly rely upon the internet to place orders,” ITA says. “For the past decade, Internet consumer sales have risen at a far higher rate than traditional retail sales. Most Canadian retail firms have adopted wireless technologies and internet-based systems to improve business-to-business and business-to-consumer relations.”
A Fresh Take on E-fulfillment
Canada’s online retailers are also reassessing their fulfillment, distribution and transportation strategies in a world where they’ve found themselves delivering a higher volume of smaller orders directly to their B2C and B2B buyers’ doorsteps. To help them achieve these goals in the most profitable and efficient manner possible, DB Schenker recently opened the doors to its first shared-use e-fulfillment operation.
“We saw a definite market need for this service, with ecommerce erupting over the last 18 months or so,” said Leo Donatelli, Director, Business Development, Contract Logistics at DB Schenker Canada. Many of these growing online brands were relegated to working with larger e-tailers like Amazon to manage their fulfillment—programs that are rarely tailored to a specific brand’s needs.
When ecommerce companies grow to the point where they want to have more direct control of the customer experience, the shared-use omni-channel warehousing environment helps them achieve that goal. Located in Greater Toronto, the facility also offers value-added services (VAS), co-packing and other services designed for the ecommerce industry.
“From this new facility, companies can effectively manage their shipment modes and ultimately take some of the margins that they’re paying their current partners back in-house,” said Donatelli, “either to share with their customers or to use for new product development and further brand expansion.”
First Tenant Moves in
The first tenant in DB Schenker’s new shared-use facility sells camera systems, Wi-Fi-connected doorbells and related products. The logistics provider receives the products, stores them, repackages them as needed (e.g., when a customer wants a package of six cameras versus the standard quantity of three) and ships out the orders to customers.
“This isn’t a service you get from Amazon or another ecommerce fulfillment provider,” said Donatelli. “Most times, you’d have to transfer that inventory to a third party, have them repackage it, ship it back to the fulfillment center and pay additional fees.”
After operating one or more steps away from their end customers, ecommerce companies also like the control that they get from using a shared fulfillment space that’s tailored to their specific needs. “We remove the barriers that exist between many ecommerce companies and their customers,” said Donatelli. “We know the value of customer acquisition and understanding your customer; a lot of ecommerce companies miss out on those opportunities.”
Growing Along with its Customers
Being situated in Greater Toronto, DB Schenker’s new shared-use e-fulfillment center offers a high level of service across most of Canada. “We have shipping solutions that can get goods to customers in as quickly as one day,” said Donatelli, who added that DB Schenker invested in core technology systems like the Tecsys Warehouse Management System (WMS) and the Nulogy co-pack platform to ensure high levels of throughput, good inventory tracking and excellent supply chain visibility in the new facility.
DB Schenker is also using its proprietary “360 Visibility” business intelligence (BI) platform, which allows customers to access a web portal, view data, run reports and view order statuses in real time. They can view inventory levels, see what products are (or aren’t) selling and then use the data for good decision-making.
Finally, DB Schenker’s provider-agnostic final-mile delivery services include offerings from FedEx, UPS and Canpar (in Canada). “We can also leverage our trucking network here in Canada, for companies that have orders that are too big to be shipped via parcel,” said Donatelli.
Up next, the logistics provider plans to open new shared-use e-fulfillment centers in Calgary and Vancouver. “Our long-term vision is optimized ecommerce fulfillment operations on a large scale that many users can benefit from,” Donatelli concluded. “We’ll leverage our upfront investment for those companies’ individual, long-term gains and continue to grow along with our customers.”