News / The future of online retail supply chains: omnichannels or dystopian swap-shops?

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Online retailing is still in its infancy but it has already radically altered the way many people live – imagine how it could change society given another decade.

A new report from Deutsche Post-DHL, released this week, tries to do just that: outlining four possible ways society could evolve and how online retailing serves it, and ponders the implications for the logistics industry.

In the first scenario, “hybrid consumer behaviour in convergent worlds of retailing” describes a society that would resonate with residents in areas of the developed world already seeing high levels of social polarisation.

It suggests a society that has become “achievement-orientated”, where deep social contrasts have developed and become further entrenched. At the same time, technological progress has been limited – smartphones are ubiquitous and the major form of communication, although touch-screen technology adorns city streets, clamouring for people’s attention with advertising.

In this scenario, multichannel retailing is the norm, with physical stores operating in conjunction with online buying. Convenience can be bought, but the biggest factor for consumers is price.

The second scenario sees an explosion in the size of the middle-class globally; an era of unprecedented prosperity where large portions of the workforce are self-employed with highly personalised lifestyles and a much greater emphasis on leisure. Communities have become far more virtual, with technologies such as 3D printing creating “innovative online retailing platforms”.

It suggests that “as a result of the boom in online retailing, the volume of goods transported by the logistics companies has increased substantially. To prevent complete gridlock, a number of conurbations have brought in stricter regulations for the delivery of goods”.

The third scenario is the most science-fiction of the four. It sees rapid technological development in which data glasses and smart contact lenses have displaced smartphones and desktop computers; where the retail experience has become highly integrated due to big data and the predictive technology currently being developed by companies such as Google. Web shops feature personal shopping avatars, while retailers and their logistics providers compete on fulfilment.

“Same-day delivery is standard practice in major cities. Retailers and logistics companies can often predict requirements on the basis of precise customer data. They send the goods – in some cases via automated solutions such as drones – even before the customer has ordered them.”

The fourth possibility is positively dystopian: the global economy has stagnated, energy and essential resources are increasingly rare and expensive. Everything has become geared towards what little sustainability is left. As a result, production has become increasingly regionalised as global transport has become too expensive, given the high energy prices, and large parts of the economy have become focused on recycling materials from earlier products, with “swapping transactions” a large part of the regular economy.

“In addition to the traditional delivery solutions, the majority of logistics firms offer spare parts logistics as well as repair services,” it said.

These scenarios have been framed through the prism of how different societies today might evolve – in places diverse as London, Shanghai, Sao Paulo and Bangalore. The full, 124-page report can be found here.