Omnichannel Growth Driving New Order Fulfillment Expectations
Today’s digitally empowered consumer wants retailers to offer more omnichannel fulfillment options, including choices in how and where they can buy merchandise. In The Future of Fulfillment Vision Study, Zebra Technologies surveyed more than 2,700 professionals in the global retail, delivery and logistics, and manufacturing industries to determine the extent to which retailers and their supply chains are meeting these new expectations. Surveyed decision makers are aware of the need to both “go omnichannel” and re-engineer their operations with the technology to do it successfully, as only 39 percent of supply chain respondents reported operating at an omnichannel level.
Eighty-nine percent of decision makers agreed that e-commerce is driving the need for faster delivery. As a result, delivery and logistics companies are adjusting, as 78 percent expect to provide same-day delivery by 2022, and 39 percent expect to be able to deliver within two hours by 2032.
Reimagining the Retail Store
The Future of Fulfillment Vision Study also found that the role of the typical retail store is changing. Many retailers are retrofitting stores to double as online fulfillment and return centers. Seven in 10 respondents agree that more retailers will make such changes to their stores. On-demand fulfillment expectations are also impacting the role of traditional retail stores. According to the study, 76 percent of surveyed retailers use store inventory to fill online orders, and 86 percent plan to offer a buy online, pick up in-store option in the next year.
Clearly, retailers are adapting to heightened delivery and return expectations. More than 60 percent that currently do not offer free shipping, free returns or same-day delivery plan to do so in the future.
Ongoing Challenges
One-third of respondents said that reducing backorders was their biggest barrier to achieving omnichannel fulfillment capability, followed by inventory allocation and freight costs.
Retailers are challenged to cost effectively process product returns. Accepting and managing returns is a challenge for 87 percent of the retailers surveyed, while 68 percent said returns for online orders are a challenge. To meet the challenge, 44 percent expect to outsource returns management to a third party.
Technology Solutions
More than half — 55 percent — of respondents’ organizations are still using pen-and-paper-based manual systems for omnichannel fulfillment logistics management, but change is on the horizon. Nearly three-quarters of respondents currently use barcode scanners, and by 2020, 94 percent of respondents will use handheld mobile computers with barcode scanners to manage omnichannel fulfillment logistics.
Adoption of more advanced radio frequency identification (RFID) technology-based inventory management platforms that enable real-time, item-level inventory lookup is also expected to increase by 49 percent in the next few years.
Looking to the future, respondents anticipate that supply chains will use next-generation technologies that will make transportation and workers operate more efficiently. Surveyed executives expect the most disruptive technologies to be drones (39 percent), driverless/autonomous vehicles (38 percent), wearable and mobile technology (37 percent), and robots (37 percent).
Omnichannel fulfillment is a new use case for most retailers, and all are on a different point in their journeys to optimize their supply chains and stores to meet their customers’ expectations.
Overall, The Future of Fulfillment Vision Study tells us that manual systems are no longer adequate to meet consumer expectations for buying and taking possession of the right item at a time and place of their choosing, and through the most personally convenient channel that offers the best deal. Retailers require real-time visibility across all purchasing channels to ensure they have what the shopper wants, when and how they want it, or shoppers will buy somewhere else and may never come back.
Ultimately, the retailers that succeed will be the ones that implement solutions that not only provide a performance edge to their store associates, but also provide visibility and actionable insights into their customers, inventory and other valued assets from the point of manufacture to the point of sale.
Tom Moore is the North America retail and hospitality industry lead at Zebra Technologies, a provider of enterprise-level data capture and automatic identification solutions that provide businesses with operational visibility.
