The global retail logistics market was valued at USD 227.72 billion in 2021. It is projected to reach USD 652.08 billion by 2030, growing at a CAGR of 12.4% during the forecast period (2022–2030). Intelligent distribution robots and autonomous items and sorting systems promote technological advances that usher in a new era of intelligent logistics for clients. With the advent of new technologies like big data and AI, as well as the new retail model where the majority of links are digitalized and online in real-time, businesses are now better able to understand the actual needs of customers. It is also used to guide supply chain optimization and improvement. New last-mile delivery mechanisms and the advent of the Internet of Things (IoT) in the supply chain are anticipated to fuel market expansion.
In addition to managing established distribution channel systems, organizations must handle growing businesses such as B2B wholesale distribution, B2C e-commerce, and self-service vending machines to upgrade existing retail formats. In addition, globalization and a rise in international retailing due to an improvement in the economy as export and import of goods are anticipated to contribute to the retail logistics industry's growth in the coming years.
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Growing International Trade
Growing globalization has led to fierce competition among international retailers. International retailers that are opening new stores in developing economies like Asia and the Pacific face fierce competition for customers. This encourages more business activity and facilitates travel between various locations. As a result, there has been a growth in demand for retail and logistic services that can speed up the delivery of products. International retailing helps countries develop economies by increasing the tax revenue obtained from importing and exporting goods and expanding existing markets. Similarly, the proliferation of internet use has increased opportunities for international retailers to engage in trade and online commerce.
Last-Mile Delivery Strategy
In addition, it is anticipated that the last-mile delivery method utilized by the retail e-commerce sector would contribute to the expansion of the retail logistics industry. Customers can evaluate products based on delivery time, prices, features, specifications, and compatibility requirements on an e-commerce platform, which allows them to evaluate products from multiple online sources. These benefits over traditional storefronts are driving growth in the retail e-commerce business.
Pandemic-Related Changes in Consumer Behavior
The lockdown's disruption has made it difficult for the retail sector to get back on track. Retail relies on the actions and engagement of its customers, just like other customer-driven industries, and the sector is struggling to adapt to the shifts in consumer behavior. Lockdowns have been caused by the government's decision to restrict access to certain areas of the internet. Due to declining revenue, the retail business is currently suffering from a lack of data, which is a problem in and of itself.
Advancement in Logistics Technology
Multimodal transportation has significantly increased in popularity due to the decreased costs per vehicle, shortened freight handling times, and fewer customs formalities. One of the critical tendencies observed in the retail logistics industry is a growing preference for the utilization of several different modes of transportation. It requires the utilization of many modes of transportation, such as airplanes, ships, railcars, and trucks. Integrating this multimodal transportation enables inventory operators to maintain cost control over merchandise while reducing the costs associated with maintaining inventory. During the process of outbound logistics, multimodal transportation enables businesses to transfer goods in an effective and cost-efficient manner.
The global retail logistics market is segmented into type, solution, and mode of transport.
Based on type, the market is segmented into conventional and e-commerce retail logistics.
The conventional type dominates the market, which can be attributed to consumers' growing reliance on traditional retail logistics services and their preference for traditional retail stores over online retailers. In a retail store, consumers can pick up and examine a product for purchase. It also provides instant gratification because shoppers may purchase items without waiting for their shipment. The e-commerce retail logistics segment is projected to have the most excellent CAGR of 13% during the forecast period. The expansion is mainly related to the coronavirus pandemic's global spread, which increased e-commerce platforms' sales. In addition, increased internet penetration, perks such as simple and free returns/exchanges, fast delivery, decreased shipping costs, and a broad product range all contribute to the rapid growth of e-commerce shopping.
Based on solutions, the market is segmented into commerce enablement, supply chain solutions, reverse logistics and liquidation, and transportation management.
The supply chain solutions segment is the dominant shareholder, growing at a CAGR of 13.8% during the forecast period. The supply chain guarantees on-time delivery, enhances Omni-channel operations, personalizes kitting and order fulfillment, and efficiently manages customer returns. It also enables direct-to-consumer and direct-to-store shipping, enhancing warehouse productivity and inventory management. The reverse logistics and liquidation market is anticipated to experience considerable expansion during the forecast period. The thriving e-commerce industry and the growing number of e-shoppers are boosting demand for dependable reverse logistics services.
Based on transportation modes, the market is segmented into railways, airways, roads, and waterways.
The road mode of transport category dominates the market during the projected period. The increasing need for roadway vehicles to transport retail products over long distances, particularly in domestic regions, has contributed to the expansion. To increase truck drivers' safety, recent regulations from the Federal Motor Carrier Safety Administration encourage the use of cameras in place of rearview mirrors. In addition, improved road connectivity in developing nations and excellent road connectivity in all established nations is a crucial factors propelling the expansion of the highway mode of the transport segment. Most tier 2 and tier 3 cities in many nations are well-connected by roads, allowing retail logistics companies to quickly deliver and pick up merchandise. The improvement of global highways and developments in road transportation systems are expected to drive the global market.
The global retail logistics market is segmented into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
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E-commerce networks are widely used by people in Asia-Pacific, which has a sizable customer base. Australia, China, Japan, and India are among the biggest exporters, accounting for a significant share of global e-commerce retail sales. Consequently, the regional market expansion is primarily driven by the region's potential e-commerce growth prospects.
In addition to an increasing emphasis on transportation techniques and continuous logistical infrastructure improvements in developing nations are expected to fuel regional market growth. As part of the Indian Government's Logistics Efficiency Enhancement Program, the Ministry of Road Transport & Highways (MoRTH) is establishing multimodal logistics parks to address inadequate road and material handling infrastructure (LEEP). North America held a considerable market revenue share.
The global retail logistics market’s major key players are Kintetsu World Express, Inc. (APL Logistics Ltd.) (Kintetsu Group Holdings Co., Ltd.), A.P. Moller - Maersk A/S, DSV A/S, Deutsche Post DHL Group, FedEx Corporation, Kuehne + Nagel International AG, Nippon Express Co., Ltd., XPO Logistics, Inc., United Parcel Service, Inc., and C.H. Robinson Worldwide, Inc.