CSCMP's Supply Chain Quarterly
October 22, 2018
Forward Thinking

E-commerce promotes regional distribution

Shift would help online retailers speed delivery and reduce the cost of handling returns.

The explosive growth of domestic and international e-commerce will drive retailers to create more regionalized distribution networks in order to stock products closer to the end customer and simplify the process of product returns.

That is one of the main supply chain ramifications of what's shaping up to be a period of eye-popping growth in Internet sales. Michael DeSimone, chief executive officer of the technology firm FiftyOne Global Ecommerce, predicts U.S.-based e-commerce will grow 10 percent annually through 2015. He also foresees nearly 21-percent compounded annual growth for international e-commerce over the same period.

DeSimone, who spoke at a recent seminar in New York sponsored by the investment firm Stifel, Nicolaus & Co., projected that the international (excluding the United States) e-commerce market would reach US $1.1 trillion in 2015.

The move toward regional distribution networks to handle e-commerce is gaining traction in both the United States and internationally. That's because retailers everywhere face the same challenges: expediting deliveries to the end customer, keeping costs as low as possible to accommodate customers' demands for free shipping, and managing and facilitating product returns.

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.

Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 2012: E-commerce promotes regional distribution"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.