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The state of fulfillment is a mixed bag for retailers

Many are automating but faster delivery, lack of visibility remain challenges for most

Social media is populated on a daily basis with posts from consumers complaining about their e-commerce deliveries not arriving on time. The good news for those consumers is that the retailers themselves are not completely satisfied with their ability to deliver.

In the second annual Bringg Barometer: “The State of Retail Delivery & Fulfillment 2022” report, 47% of retailers said they were “somewhat satisfied” with delivery windows and 4% said they were dissatisfied. Only 29% felt they were doing a great job with delivery windows, suggesting there is plenty of room for improvement in the process, according to delivery and fulfillment cloud platform company Bringg.

When it came to the quality of delivery services offered, 54% were highly satisfied against just 23% that were somewhat satisfied. However, the Bringg report found areas of opportunity. Of 56% of retailers that were highly satisfied with their delivery/pickup options, 64% said they struggled with inefficient manual processes. Of the 54% highly satisfied with the quality of delivery services, 43% struggle with scheduling those deliveries.

This year’s report did identify how retailers have coped with COVID-19 and the shifts in consumer behavior.

Read: Bringg is bringing customization and control to the last mile

Read: Cloud-based fulfillment platform Bringg partners with last-mile delivery provider GoFor

“[In 2021] retailers found their feet with alternative fulfillment options, and models such as curbside pickup and click and collect have become the norm,” Bringg said in the introduction of the report. “Consumers continue to prioritize last-mile fulfillment speed and convenience, accelerating the need for retailers and e-commerce brands to deliver faster, more efficiently and cost effectively.”

The company noted that hyperlocal fulfillment models have gained traction as retailers rush to fulfill greater volume orders and achieve same-day or on-demand deliveries for customers.

“With on-time delivery, same-day delivery, scaling fulfillment and managing multiple fleets all top priorities, today’s retailers can’t afford to have inefficiencies, lack of visibility and outdated technology holding them back,” Bringg wrote.

The survey of e-commerce stakeholders found that 44% are managing multiple fulfillment channels with disparate technologies, and 61% cited visibility as a significant problem.

“Retailers need to be able to connect their data and processes better to create more efficient order fulfillment and a single, unified experience across fulfillment channels, helping their brand to stand out in an increasingly commoditized field,” the report said.

When it comes to fulfilling faster delivery times, 99% of respondents said they will offer same-day delivery within the next three years compared to just 35% that do so today. However, most fulfillment models today are not optimizing for same-day delivery, with 36% saying they don’t have the right technologies, such as real-time order visibility, in place to accommodate same-day delivery. Another 24% cited the distance goods must travel from warehouse to fulfillment centers as an obstacle.

Watch: Using tech to improve deliveries

Visibility was not only a problem from warehouse to fulfillment center but also once the item was shipped to the customer, with 61% of respondents saying they lack delivery visibility. The major impediment to this for 55% of respondents is the manual nature of their planning and dispatch operations.

“While retailers are looking for new ways to fulfill orders, there’s a challenge in connecting the dots,” the report noted. “These gaps in data as well as legacy processes are standing in the way of achieving fast delivery of growing order volumes.”

The report found that 65% of retailers are currently handling their last-mile and fulfillment operations manually. This is becoming problematic as more retailers are recognizing the need to have multiple delivery partners to ensure capacity. More than half of respondents (55%) use multiple fleets for last-mile delivery.

Faster deliveries lead to lack of brand control

The survey dug deeper into the trends mentioned above, including speed of delivery, which has become a top ask of customers in today’s on-demand environment. Currently 58% of companies are offering next-day delivery, but indicating the importance of instant gratification, 56% expect to offer 30-minute delivery windows by 2025.

However, as brands work to deliver faster, many feel they are losing control over their brand experience. More than 80% of retailers work with as many as five different last-mile providers, but 36% say it hurts their brand control to do so.

“Retailers are not connected enough across their technologies and external fleets to have enough visibility over the provider’s end-to-end delivery performance and customer experience,” Bringg’s report surmised.

A lack of visibility throughout the supply chain was a common theme, and it is no different when it comes to scaling same-day delivery. The top challenges to scaling operations included real-time order visibility and tracking challenges (51%), travel time between warehouses and retail/delivery locations (49%), manual operations (35%), and outdated technology (34%).

Automation, services adoption

More retailers are utilizing automation to help solve their last-mile e-commerce challenges, but it is still a long slog for many. Just 35% have fully automated the process, although the rest have at least started the process. Only 5% said they have no automation at all.

When it comes to value-add services, 65% offer over-the-threshold delivery services currently, but 45% said they would like to offer assembly or repair services, although the complexity in doing so is holding them back. Disposal and reverse logistics are on the road map to adoption by 15% of respondents.

“It will be interesting to see how the retail sector adjusts its fulfillment operations to the current market eruptions,” the report said. “Retail sectors such as omnichannel fulfillment are growing; retailers are taking their customers from offline to online buying and fulfillment; and new ecosystem players — including crowdsourced fleets, warehouse solutions, mobility solutions, and more — are paving the way for cost-effective, fast fulfillment. The good news is that the retail industry is highly agile, with a third of retailers (33%) highly confident that they can pivot based on new, pandemic-driven customer behavior.”

 Click for more articles by Brian Straight.

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Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and fleetowner.com. Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at bstraight@freightwaves.com.