Startups are radically rethinking logistics.
For years, online retailers have lamented the state of shipping. But that hasn’t stopped e-commerce from growing: comScore projects that holiday e-commerce sales for 2015 will surpass $70 billion, up 14% from last year, while mobile sales will grow by 47% to reach $11.7 billion.
All those extra Amazon purchases under the tree are putting unprecedented strain on existing infrastructure, and online retailers are increasingly seeing shipping and logistics as bottlenecks to growth.
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“The delivery network needs to be completely ripped up and re-created,” said Jennifer Hyman, CEO of Rent the Runway, at this year’s South by Southwest Interactive. “We need to put UPS and FedEx out of business… The only way for e-commerce growth to be economically viable is if the delivery network changes.”
In response, startups including Shyp, Shipbob, Shipster and Dropoff are reinventing the unsexy business of package delivery. San Francisco-based Shyp emphasizes that the service “comes to where you are, no need for a box, no need for a post office,” according to a recent ad campaign.
In October 2015, Shyp announced “address-free shipping.” Customers create usernames that are synced to physical addresses and delivery preferences that can be changed and updated. Just as apps such as Venmo replace bank details with a simple username, people sending packages now only need to remember who they’re sending an item to, rather than specific routing details. As the service develops, if someone wants to send an item back to a company, they will be able to direct it using a simple search for @Apple or @Samsung, according to Wired.
Unsurprisingly, e-commerce behemoths are working on their own solutions for the “last mile” of shipping. Amazon is rumored to be bypassing FedEx and UPS by taking more delivery in house. The company is “buying its own truck trailers, hiring on-demand delivery workers and building a new type of delivery hub—with technology that has thus far been kept under wraps—in major cities from Seattle to New York,” according to the Financial Times.
If these solutions can scale, they could provide the framework for e-commerce to ramp up even more for 2016 and beyond. The physical address lists that we now store in digital form may soon seem as obsolete as the Rolodexes of decades past.
For more key trends for 2016, download our latest report, The Future 100.