UPS exec addresses how e-commerce has changed logistics and supply chain operations

Alan Gershenhorn, senior vice president of Worldwide Sales, Marketing and Strategy for UPS, says e-commerce has significantly changed how retailers fulfill orders and replenish stock—whether at the store, an online storefront or from a distribution center.

By ·

Back in October, transportation and logistics bellwether UPS said it expected volumes on Cyber Monday, December 2, the most active online shopping day of the year, to be up ten percent annually at 32 million packages.

This impressive statistic speaks not only to how rapidly e-commerce is growing but also to how it is changing supply chain and logistics operations and processes, too. E-commerce upticks are not singular to UPS by any stretch to be sure, as FedEx , its biggest competitor, called for Cyber Monday volumes to be up 11 percent compared to 2012, when it anticipated volumes to be topping 22 million shipments (final Cyber Monday tallies for each company were unavailable at press time).

On his company’s third quarter earnings call, Alan Gershenhorn, senior vice president of Worldwide Sales, Marketing and Strategy for UPS, explained that the dramatic rise of e-commerce continues to alter consumer behavior and shipping patterns.

And in an interview with LM he took it a step further, providing a thorough explanation of how that is resulting in retailers, in a sense, rewriting their playbooks in terms of how they address their fulfillment and supply chain models.

“E-commerce has significantly changed how retailers fulfill orders and replenish stock—whether at the store, an online storefront or from a distribution center,” said Gershenhorn. “Consumers’ expectations are rising, and online shoppers want to come as close as possible to getting the same kind of one-to-one personal attention they would receive at their favorite brick and mortar store.”

As a result of this, he noted how UPS becomes an extension of the retailer and can help fulfill this role in an ever increasing omnichannel world, adding that UPS conducts extensive research in the form of a study to gain insights into buying behavior and consumer expectations when purchasing online and in store to help retailers understand where they need to focus their efforts to differentiate themselves from their competitors.  The study, UPS Pulse of the Online Shopper, is conducted in the U.S. and globally, and receives input from more than 14,000 frequent online shoppers.

One of the main takeaways of the study, he said, was that on a global basis consumers want greater control over their online shopping experience, including more information, more choices, and more convenience across channels, and he explained that logistics plays a key role in delivering a positive retail customer experience and can make the difference in driving customer loyalty and increased sales.

“This shift in consumer buying behavior is really forcing retailers to rethink their entire fulfillment and supply chain model,” said Gershenhorn. “This can mean investing in enterprise-wide inventory visibility, providing the opportunity to leverage select stores to ship directly to consumers. This will allow for greater product selection and availability, speed to consumer and better inventory balancing. UPS works with retailers to optimize their networks to help reduce costs and find the optimal number of fulfillment locations given current or future supply and demand.  UPS has a set of solutions that will help retailers execute their omnichannel strategies.”

With Thanksgiving falling later this year and leaving consumers with six fewer shopping days until Christmas, Gershenhorn said the shorter holiday shopping season is definitely a factor this year, as there are 26 shopping days between Thanksgiving and Christmas this year, making it the shortest holiday shopping season on record.

Even with fewer days to ship packages during the holiday season, he cited how UPS has the ability to proactively manage its network and match capacity to the needs of its customers.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

E-commerce · UPS · All Topics
Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...