Leaders in the 3PL market realized the transformation coming as a result of the retail transformation to the omni market structure and, more importantly, the impact to the market from the discontinuous changes demanded by consumers. The impact and resulting transformation to support the retail omni market has spread across industries to drive transformation into all of the industry and practices supporting the retail omni market. This transformation is and the effects of the retail omni market are most outwardly visible in the parcel and last mile delivery to the consumer. The consumer lifestyle demands for delivery of purchases is most impacted in this area and has driven, at least initially, the greatest transformation. This transformation crosses through not only the delivery services and also includes the tracking and scheduling of these services along with the communications and directive input from consumers to schedule and coordinate the final delivery.
These carriers and third party logistics providers have really been going through similar struggles to meet consumer lifestyle demands as the major retailers. This has crossed over how and where product is stored along with the delivery methods and new services developed to date to improve flexibility and extend capabilities. These delivery services started with the simple parcel tracking notifications to the addition of direct communication to coordinate delivery, to the redirection of delivery and now to parcel drop boxes where the consumer parcel can be dropped near the delivery address for the consumer to pick up based on their schedule. These are a brief litany of the types of changes that are the initial manifestation of the transformation driven into the delivery market and the transformation is really just gaining steam.
The 3PL market supporting retail and eCommerce has been driven into a similar type of transformation from two directions really; both the demands of the retailer and the requirements of the last mile delivery services. The leaders in the 3PL market embraced the transformation and have developed a flexible strategy and selection of services that can support the delivery coordination demands in an efficient and cost effective manner with the intent to provide the type of strategic services that most retailers struggle with to implement. 3PL providers are prepared and capable to efficiently outsource inventory management to provide a structure that can support two day delivery at zone 1 pricing for all major metropolitan areas.
This type of investment for most retailers is insurmountable and would leave them at a strategic disadvantage. The 3PL provider brings a great deal of value to the omni market support to allow small and mid-sized retailers compete cost effectively with the large retailers. The 3PL providers have carved out an important niche in supporting the retail omni market demands and the benefit there is that retailers can focus on the consumer relationship and product development and outsource the supply chain and logistics to experts that focus on these capabilities. Retailers can no longer afford to support the demands of supply chain and logistics and this provides a great opportunity to partner with a 3PL that is focused on innovation and supporting the retail transformation.
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