3PL Providers Support the Growth of the Canadian eCommerce Market

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With the retail e-commerce market projected to reach CAD$29 Billion by 2021, businesses are urged to partner with third party logistics (3PL) providers to satisfy end-to-end customer experiences.

Supply chain and logistics companies recognize the increasing demands of customers across a variety of industries. From retail to pharmaceutical markets, to in-store and online ecosystems, the need for optimized solutions is key to driving revenue and customer loyalty. In response to an accelerating Canadian ecommerce market, 3PLs prove to be the most effective and efficient catalyst for achieving these initiatives. This article identifies current trends within the ecommerce market and the top three benefits 3PLs bring to the shipment lifecycle.

Canadian eCommerce Market

Over the next ten years, projections show that online verticals will generate 35% of Canadian retails sales. Consumers are no longer purchasing on a singular platform, pushing companies to shift from traditional to omni-channel strategies. In addition, consumer loyalty has gravitated from brand names to companies that offer immediacy and low cost.

Although online buying in Canada has progressed slower than the US and the UK, there is optimism that our market will now flourish. Contributing factors outlined by BCG include the following:

  • Young consumers (ages 18 to 44 years) have an increased level of online activity, with 50% of those under 35 purchasing at least once a month.
  • Online research precedes 60% of all purchases.
  • eCcommerce sites are improving their product availability and shipment options.

Today, ecommerce businesses meet the growing demands of consumers by providing platforms that deliver immediacy and convenience. By breaking barriers associated with geographic limitations, consumers are able to purchase globally and at lower costs. In addition, online platforms give access to information with the click of a button, making research and comparison shopping easier.

While the benefits for online shoppers remain high, ecommerce businesses must ensure they have the appropriate processes in place to meet customer expectations and fulfillment. Third party logistics (3PL) provider’s become an integral component to optimizing supply chains for the retail ecommerce industry.

Top Three Benefits Proposed by 3PLs

By 2024, 3PL market share is expected to be well over USD$1,100 billion, according to Global Market Insights. A contributing factor to market growth will be attributed to an increased need for ecommerce businesses to meet the growing demands of their consumers. Immediacy and efficiency must translate into “fast delivery, efficient inventory management, freight forwarding, and individualized shipping time” (Cision, 2017).

3PLs provide solutions that facilitate flexibility and scalability to businesses looking to create efficient and specialized processes for their customers. Aside from the management of supply chain processes, there are three benefits 3PLs offer that contributes significantly to the ecommerce ecosystem.

1. Consolidation

As mentioned above, ecommerce sites break geographical limitations and enable online shoppers with purchase options across the globe. However, on the retail side this may propose an issue as multiple orders create complex supply chains. 3PLs break this barrier by offering freight consolidation solutions that streamline shipments using a single point of contact and stable operation procedures. This also cuts costs for businesses as consolidation enables effective use of shipments.

2. Order Fulfillment

Business Dictionary defines order fulfillment as a “sequence of steps involved in processing an order to the satisfaction of the customer and making the necessary changes in the inventory records”. Online businesses need efficient processes in place to ensure all steps of the shipment lifecycle are carried out efficiently and effectively. 3PLs help satisfy customer experiences by guaranteeing the accuracy and handling of shipments are exceeded. This in turn, nurtures the relationships between business and customers, which translates into growth and positive ROI.

3. Warehousing and Distribution

Businesses that operate online require dependable warehousing and distribution solutions, which can sometimes pose concern. 3PLs help ecommerce sites carry out omni-channel strategies by supporting all distribution initiatives. Whether items are shipped to retailers or directly to customers, a 3PL utilizes technology such as transportation management systems (TMS), to deliver results. This removes the burden of integration from businesses, reduces operation costs and improves visibility for customers.

Based on the figures above, significant projections indicate that Canada is progressing forward as a leader within the global ecommerce market. To meet the growing demands of online customers, ecommerce businesses must partner with 3PLs that offer a resume of optimized solutions.

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