The ‘always-connected’ consumer has higher expectations than ever before. These include the latest in buying and shipping options, faster delivery and a seamless online experience. The same digital transformations that continue to fuel this on-demand economy are now challenging manufacturers, retailers and logistics firms to navigate a new fulfillment landscape. With ecommerce expected to generate $4.479 trillion in retail sales by 2021, investing in new technologies and implementing digital, automated processes is no longer enough to keep pace. That’s why retailers and manufacturers alike are redefining their roles, exploring new business strategies and increasing collaboration as they transition to a more robust omnichannel strategy.
Retailers, for example, are focusing on the new “ship from store” strategy, leveraging their store locations to double as online fulfillment centers for shipments and ecommerce returns. Zebra’s Future of Fulfillment Vision Study - a global body of research analyzing how manufacturers, transportation and logistics (T&L) firms, and retailers are preparing to meet the growing needs of the on-demand economy - found 76 percent of retailers currently use store inventory to fill online orders. Further, six out of 10 expect that number to continue to grow and it’s anticipated that 96 percent of retailers will have dedicated fulfillment centers for online orders by 2028. With rising customer expectations for same-day and even two-hour delivery, fulfilling digital orders from brick-and-mortar store locations is one strategy key players are beginning to use, and it will soon become a requirement to succeed.
While both speed and accuracy are essential for developing a successful omnichannel strategy, only 39 percent of the survey respondents across manufacturing, retail and T&L believe they’re currently operating at the level necessary to meet today’s expectations. So how can these key players speed up the process to achieving improved visibility and accuracy while surpassing consumer expectations? The answer is simple: collaboration.
A growing number of retailers currently rely on dropshipping, in which manufacturers themselves are responsible for delivering products directly to the consumers, bypassing the retailer’s inventory altogether. Expanding beyond these capabilities, retailers have also started to leverage strategies including curbside and warehouse pickup as well as third-party locations like parcel shops and lockers. As for logistics companies, 78 percent of those surveyed expect to provide same-day delivery by 2023, and 40 percent anticipate delivery within a two-hour window by 2028.
Through the collaboration of these key players to meet consumer delivery expectations, the future of fulfillment will also be characterized by new shipping options. New technologies such as autonomous ground vehicles, drones and droids will see significant growth between now and 2028, according to our study. The new landscape will also give rise to unconventional shipping methods such as bicycle couriers and crowdsourced delivery, a method in which a network of drivers can choose to complete a specific delivery order.
So what’s next for adopting the new fulfillment model? As this model continues to evolve, it will be essential for industry leaders to come together and empower their frontline employees to drive their performance edge, ultimately improving the customer experience. This means embracing the digital transformation permeating the supply chain, proactively adopting new solutions to support the next generation omnichannel strategy, empowering employees and fostering collaboration amongst all key players.