Late deliveries may cost retailers big

Changing consumer behaviors will complicate operations at already-stressed distribution centers (DCs) nationwide as retailers struggle to deal with an unprecedented holiday shopping season, according to a survey from voice automation software provider Voxware, released Tuesday.

The biennial survey of U.S. consumers revealed a growing impatience with late deliveries as more people shop from home due to the coronavirus pandemic. Surging e-commerce activity since the spring has put pressure on retailers to speed order fulfillment and delivery, in turn stressing DC operations, which are increasingly looking toward automation and other strategies to help with the challenges, the survey also found. 

Retailers could suffer from brand damage and lost revenue if they can’t keep up with the new demands, the researchers said.

“In 2020, Christmas bells will sound more like alarm bells at many distribution centers,” Keith Phillips, Voxware’s president and CEO said in a statement announcing the survey results. “One thing remains constant, even during this challenging time consumer expectations continue to rise. Distribution centers need to perform in accordance with those expectations or suffer consequences to brand reputation and ultimately revenue.”

The survey found that 30% of consumers are “much less likely” to purchase from an online retailer who has failed to deliver an item on-time in the past, up from 23% in 2018. What’s more, respondents reported more delayed and more inaccurate deliveries this year than in years past. The result is a negative and lasting impact on customer loyalty, reputation, and ultimately, the bottom line, the survey found. More than 60% of respondents said they will abandon shopping with a retailer if they receive two or three late deliveries.

Investing in automation can help with those challenges, as it can improve both speed and accuracy in the DC, the researchers said.

“Retailers have been scrambling to identify and deploy warehouse technology given the challenges many faced earlier this year,” Phillips said. “Automation will be critical and companies that have not taken the initiative to optimize their distribution centers will struggle to deliver the flawless experience customers expect. When consumers can switch retailers with the swipe of a finger, speed and accuracy of delivery is a critical differentiator.”

Other survey findings include: 

• Shipping directly to gift recipients means more packages sent per order: 77% of respondents said they plan to have more gifts shipped directly to recipients than last year, further complicating fulfillment and delivery challenges in the DC.

• More smaller items must be picked and packaged this year: 78% of respondents said they plan to purchase “stocking stuffers” online rather than in-store, creating challenges to the picking process.

• Covid-related supply chain slow-downs have been prevalent: 13% of respondents claim up to 50% of the items they have purchased online have arrived later than the promised delivery date.