When it became clear that Covid-19 was going to shut down the local industry for a long time and that life was going to take place mainly at home, many persons probably discovered awkward fears in themselves, apart from worries about work and health, which they wouldn’t express because of shame: 'Will I be able to live without my favorite asian food next door or my favorite clothing store? How will I survive the end of the day without the occasional stroll through town? And am I a bad person for worrying about such habits while other people can't pay their rent or fall ill with the virus? Well ...the only answer is that home delivery is reaching its peak now! Web stores animate us with discounts and postal carriers warn of extended delivery times. And tacitly we participate in this. Thank God, only the postman knows our sins (and even him we usually don't even see anymore)! It's a bit like with embarrassing music hits - nobody hears them, but still they storm the charts. And actually, we are secretly incredibly grateful for the opportunities that e-commerce gives us and are rediscovering our desire to buy while shopping online intensively. Let's take this as an opportunity to take a closer look at the phenomenon of online trading.
Ten years ago, the British department store business “John Lewis” built its 'Magna Park 1' - an approximately 60387 square metre 'logistics campus' consisting of roads, warehouses, freight containers and truck bays, in the east of Milton Keynes, which was to supply the company's stores in southern England. No sooner the park had been completed than Lewis realized that e-commerce had much more potential. Between 2006 and 2016, the number of John Lewis packages delivered directly to customers increased twelve-fold, and as a result, additional buildings for home deliveries couldn’t be built fast enough. Magna Park 2 followed in no time at all, with an area of around 62710 sqm, another warehouse for the Waitrose supermarket chain with around 92903 sqm and Magna Park 3, which was similar in size to its predecessors and filled the left land.
John Lewis' story is the most significant symbol of the home delivery boom, which has only one mission, and that is growth in all directions and with numerous innovations. In China, the 'Meituans' scooter riders in banana-yellow cleavage whiz around, distributing 30 million food orders to online shoppers on a single weekend in July. Voice assistants such as Alexa, Siri or Google are increasingly using voice ordering to make pre-selections and to be available to us as personal shopping assistants. And Facebook wants to make its second attempt to become a platform for online shops. In addition to ads and chat services as sales channels, a live shopping function with an 'augmented reality' application is to be used. Research in e-commerce is expected to further boost the already rising numbers.
The share of e-commerce sales in total retail sales has risen steadily in recent years. While less than 360,000 orders per day were shipped in New York City in 2009, the figure is now already more than 1.5 million. Global online sales were still $3.8tn $ (£2.95tn) in 2017 and are expected to increase to almost $6tn $ by 2024. Especially the purchase via mobile devices is increasing. Markets with significant m-commerce sales include China, Japan, South Korea, Great Britain and the USA. In Germany, it accounts for 55 percent of total e-commerce sales. Currently, the Germans reach about 3.8 billion parcel shipments. Online trade in Germany thus generates around 63 billion euros. The consumer electronics and fashion sectors are at the forefront of this growth.
The strategy 'Think less, buy more' works and not only for Amazon, Ebay and other online giants! One click here, another one-click payment there and we have already ordered new products to our home with minimal effort - a delicious meal, everyday household items, the latest fashion or technology. We all push the e-commerce industry and contribute to it without thinking much about how the packages get to us. We all seem to benefit from the progress.
While we select and purchase with inches of our thumbs, online retailers are busy transforming the physical world so that our deliveries arrive in the right place at the right time. But the disadvantages are obvious. For one thing, there is the packaging of the products delivered to the home. For example in the USA this makes up about 30% of solid waste. For the cartons alone, 1 billion trees are felled. Returns, which are often still destroyed, as well as individual and express orders, also put a strain on the climate. On the other hand, local trade is increasingly threatened. However, a further disadvantage also arises for the companies and workers themselves, as their networking and acceleration cause more documentation and organisational effort and higher susceptibility to errors. Jobs in the parcel industry are considered very poor. Most of the time the workers, who often come from countries like Kazakhstan or Ukraine and speak broken German, experience non-transparent working conditions and low pay. Exploitation through the use of subcontractors, self-insured delivery staff and high time pressure often determine their everyday life.
These are problems that poor countries, where online shopping is not common, do not have at all - First World Problems of a highly modern, digitalized, western society. But if you consider how many production facilities in the value chain begin or end abroad, it becomes clear that we bear a collective responsibility beyond our horizon in times of a globalized society.
But what possible solutions could there be to the problems mentioned above, especially if we do not want to return to local trade after the lockdown? Recently, a german podcast appeared on the german news site tagesschau.de (https://www.tagesschau.de/multimedia/podcasts/malangenommen-online-shopping-101.html) that dealt with what our western world would look like if we only bought online. The interviewed experts were in disagreement. Romanticised ideas of modern city centres were explained - raised beds with vegetables, open gardening and living spaces instead of consumption. Small shops could enjoy local popularity compared to the big online retailers. However, not all interviewees believe in a complete switch to online retailing, but in more climate-friendly incentives for collective orders and more targeted shopping. Incidentally, it was only in March that the EU Commission announced that the destruction of unsold durable goods would be banned throughout Europe. In addition, the so-called 'memo boxes' - reusable packaging for shipping - are also being discussed again and again.
The poorly-off parcel carrier could be partially replaced by automated delivery vehicles, according to the experts. However, drones and robots, which are currently being discussed, would be unrealistic in urban areas. But other new technologies could make our deliveries more convenient - loose and extensive apps for example, which make delivery more manageable. These could e.g. contain security codes with which the messenger can enter the customer's home and conveniently deposit the goods. But in this case the disclosure of data is strongly criticized. In another scenario, the parcel carrier job would be transformed into an advisory service. For example, door-to-door deliveries would only be paid for extra services. However, the forecasts forget to include ideas for solutions to the increasingly complex documentation and organisational structure in logistics centres. Hence our proposal and area of expertise: automated workflows, device control and data management and a central point for that. This ensures that information such as working hours, delivery routes or customer information is automatically created, transparently managed and effectively used in compliance with data protection regulations. IoT solutions that network the individual control units and persons could be used here. As an example we would like to mention our MobiTime. This software solution, which provides the digital documentation of employees' work performance, includes a web portal for admins and an employee app and can be expanded with any hardware. MobiTime offers features such as digital time recording and location of employees, notification of anomalies and deviations or documentation and recording of supplements. All in all, this reduces the amount of work and time required and the susceptibility to errors for recurring tasks.
As a further example we would like to present our Mobile Device Management MobiVisor. With MobiVisor, mobile devices such as smartphones, sub-notebooks, PDAs or tablet computers can be managed centrally. With the help of software and hardware, at least one IT administrator can remotely manage all devices from a single program. If such a technology would be used e.g. for the devices of parcel carriers, their daily work routine could be facilitated and certain work processes could be made more transparent.
Retailers have to deal with the issue of home delivery and sustainability, because it’s obvious that online business isn’t only a lifeline in the crisis for many companies and customers, but is part of Industry 4.0, which will determine our future.