Global giants are disrupting the retail industry, and the waves they’re making are also shaking up several other industries.
Amazon has now surpassed Walmart as the world’s largest retailer (in overall sales outside of China). Propelled by online shopping and a lean, just-in-time operations structure, Amazon and the retail companies following their model have driven a 75% upswing in global retail sales growth. The success of Amazon and other large retailers has proven to be a tide that raises many boats.
High-volume, order-fulfillment e-commerce workflows have had a major impact on the shipping industry, for one. The demand for fast and free shipping has never been higher – consumers love free shipping – which is a boon for shipping companies and a challenge for e-commerce businesses running on razor-thin margins.
‘Lean’ supply chain principles are affecting the world of staffing, as well, and in three complementary ways. They create a demand, present a challenge, and provide a model to solve it all at once.
The need for people in areas such as order fulfillment, inventory management, warehousing, shipping, and delivery is exploding in recent years. The success of Amazon and other e-commerce companies has created the need for many qualified candidates to meet the demands of surging e-commerce sales.
According to Shopify’s Michael Keenan, “Two years ago, only 17.8% of sales were made from online purchases. That number is expected to reach 20.8% in 2023, a two percentage point increase in e-commerce market share. Growth is expected to continue, reaching 23% by 2025, which translates to a 5.2 percentage point increase in just five years.”
The cyclic, seasonal nature of consumer spending means retailers do not consistently require this level of the workforce. The spending boom of the holiday season is an obvious example, but there are many other spending peaks and valleys throughout the year.
As employee wages represent the largest expense for businesses, maintaining peak-level staffing year-round can quickly reduce margins for companies in the e-commerce space during slower periods.
As e-commerce matures and brands ‘sharpen their elbows’ to retain and grow their market share, profit margins will be under constant pressure and in danger of erosion.
Proactive businesses need to stay ahead of the curve on cost-effectiveness, especially when dealing with fickle, oft-times unpredictable consumer-based trade and commerce.
Lean supply chain principles create both a demand and a challenge, yet that model provides the solution. Flexible, just-in-time staffing strategies powered by the digital staffing agency, Jombone, are fulfilling the demand for workers effectively that scales to demand.
“The Jombone platform helps e-commerce fulfillment companies network with a local workforce who are highly motivated,” says Sumit Sahdev, co-founder and CEO. “Our platform helps companies simplify the hiring process to meet surges in demand, applying advanced digital technologies to standardize staffing best practices and create significant cost savings.”
Sahdev argues the application of lean supply chain principles to vital tasks such as order fulfillment, order & inventory management, and logistics is going to be the defining challenge for companies to overcome to find the best candidates and meet the needs of younger generations who increasingly prefer an online store to physical stores.
“Even with partial automation in light industrial distribution centre settings, ‘on-demand’ labour facilitates a multitude of mission-critical, KPI-driven activities and other important resulting metrics.”
E-commerce has truly been a sea change for global industries – it is reshaping the way we consume and work. By applying the very principles that have driven the success of e-commerce to the labour market, businesses can meet surging customer demand while protecting margins to remain competitive in the e-commerce world.