LP Magazine

JAN-FEB 2019

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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24 JANUARY–FEBRUARY 2019 | LOSSPREVENTIONMEDIA.COM The End-to-End Logistics Provider I f you're like me, you've probably placed an order online in the last ninety days. Like most online experiences, it was likely seamless. You type a product in the search field, pull up comparable items, make a command decision, and place the order. When the experience concludes, you will have received an email confirmation of the order and the expected delivery date for your parcel. Most consumers who follow this process every day in the world don't give a thought to what transportation providers will be handling their parcels. This responsibility falls on the retailer, who has been entrusted with the customer's order. If the parcel shows up at the doorstep on time, life is good for all parties. If it doesn't show up, life becomes bad, specifically for the retailer. According to several marketing surveys, by 2021 global e-commerce sales will reach a staggering $4.5 trillion. To put that into perspective, out of the 190 countries ranked by the International Monetary Fund based on their gross domestic product (GDP), this dollar amount would rank number four in GDP between the countries of Japan and Germany. China is expected to lead this blistering e-commerce pace, becoming the largest market on the planet for consumer goods purchased. As Americans, we are all too familiar with the term "made in China." However, as e-commerce continues to accelerate, the new term in the market place is becoming "purchased in China." In November 2018, Alibaba CEO Daniel Zhang announced that it intends to help global business sell $200 billion in goods to China through e-commerce channels in the next five years. The Chinese government has hosted several logistics summits to try and promote its own internal e-commerce growth for Chinese retailers, who drastically want to sell and ship directly to consumers in the United States. The Chinese believe that consumers having the ability to order and receive products at their homes not only is a convenience but also offers an emotional impact. This makes sense when you consider the emotional lift you sometimes get when arriving home from work and seeing a package at your front door. Parcels without Borders What does this mean for individual merchants and retailers who are now experiencing the ability to sell beyond their borders? First, the experience has to be as seamless as an in-store shopping experience, which can be a daunting task if you are shipping to another country. Second, the package must be delivered quickly, and typically the consumer doesn't want to pay for shipping. In the same breath, the consumer wants a hassle-free returns policy at no cost to them. This now leaves the retailer searching for options. One of the most-costly services in business is transportation. Therefore, most companies will look for the most cost-effective way to move that box from the warehouse to the client. This cost will vary greatly depending on several factors, which would include the time it takes to deliver the package, the distance the package has to travel, and the method of delivery. Typically, the more convenient the process is for the customer, the higher the transportation cost will be for the retailer or individual merchant. As a result, most companies will look for a balanced approach that will satisfy both the customer expectation and the costs associated with transporting the order. The result of this evolution in the supply chain is the development of the end-to-end service provider. These logistics companies support retailers as a hybrid solution, providing services that range from distribution, customs clearance, transportation, and final-mile delivery. It can include a mix of their own proprietary distribution centers and trucks mixed in with a vast network of contracted transportation providers, which can also incorporate national post offices in the final-mile delivery. If this sounds confusing, it's because it sometimes is. However, if done correctly it is a very sound and cost-effective continued on page 26 By Glenn Master Master is a recognized industry expert with over twenty years of experience in loss prevention and security management. He has worked both domestically and internationally specializing in supply chain, transportation, and logistics. Master has held executive and management positions with companies such as Pitney Bowes, Newgistics, Office Depot, Henry Schein, and Motorola. He is cofounder and current board director of the International Supply Chain Protection Organization (ISCPO). He is also an adjunct professor at Texas Christian University teaching undergraduate courses in criminal justice, security, and LP management. He can be reached at Glenn.Master@pb.com. SUPPLY CHAIN According to several marketing surveys, by 2021 global e-commerce sales will reach a staggering $4.5 trillion. To put that into perspective, out of the 190 countries ranked by the International Monetary Fund based on their gross domestic product (GDP), this dollar amount would rank number four in GDP between the countries of Japan and Germany.

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