Online retail giants, such as JD.com, are known to have a competitive edge over traditional retail stores. They have lower overhead, can offer more products because they are not limited to available shelf space and have numerous other advantages. However, when customers want products as soon as possible, they inevitably make the commute to a local store rather than wait a few days or longer for the delivery of an online order. The online giant JD.com, which is led by retail industry entrepreneur Liu Quingdong, has identified a great solution that has already helped it to gain an edge in this aspect of the market as well.
Specifically, it has found a way to reduce delivery time in many major markets throughout China to an average of two hours. However, some deliveries are made within 30 minutes. It has accomplished this incredible feat by adding 20,000 offline stores to its distribution chain. This move toward improved efficiency includes 175 Walmart hypermarkets and spans across 54 cities. The company states that efficiency is improved because unnecessary steps in the supply chain are eliminated. Orders no longer have to sit at distribution centers, warehouses and delivery stations before being delivered to customers. Instead, they are delivered straight to the consumer from the closest location. In addition to delivering orders to consumers much faster, the company is benefiting from reduced costs and improved customer satisfaction. The retail stores that are participating receive financial benefits, and they also are able to provide their in-store customers with a better shopping experience. This is partially because the stores are less crowded while store sales may remain the same or may increase.
The use of advanced technology plays a critical role in this innovative process. Artificial intelligence rapidly identifies the closest location that the requested goods are at and will immediately send a delivery order through that center. At this time, this new supply chain strategy is bolstering the company’s sales and giving it a competitive edge over its major rival, Alibaba. However, Alibaba is already taking steps to level the playing field with a similar setup.
For the time being, JD.com continues to take advantage of its edge. It has benefited from a 20 percent increase in orders since unrolling this new supply chain strategy. Because the company has plans to extend this strategy to many mid-sized and smaller cities throughout China soon, there is still plenty of room for further growth and increased profitability. For years, the company’s founder, Liu Quingdong, has identified and implemented new and improved ways to serve customers. This began with the company’s original establishment, which was spurred by need related to economic conditions at the time. This entrepreneur grew a single retail store operation into one of the largest offline retail giants in the world, and he continues to innovate today. With this in mind, this retail company remains an enterprise to watch going forward. It promises to continue to lead the way toward improved profits and an elevated customer experience through ongoing innovations.