New research from supply chain commerce solutions provider Manhattan Associates has found that retailers are struggling to keep up with consumer demands for speedy delivery services and flexible delivery/collection options.
Manhattan questioned 2,000 people and 100 UK retail professionals about their preferred fulfilment options, and found that while nearly half of customers want same-day delivery, only one in five retailers currently has the ability to fulfil orders this quickly.
The study also found that over a third of UK shoppers expect to use two-hour click-and-collect services in the next six to nine months, yet just one in four retailers can currently offer this service.
Manhattan expects that this growing gap between consumer demands and retailer capabilities will only widen as speed of fulfilment continues to grow in importance. Just a year ago, consumers ranked it as 4 (on a scale of 1-5) for importance; today they rank it as a 3 – behind price and choice, but above convenience and expertise.
According to the report, one of the things holding retailers back is that they’re struggling for profit margin on fulfilment. In trying to meet customer demands, costs are going up.
“One-third of retailers struggle to make a profit on deliveries and fall into the ‘profitability gap’,” said Craig Sears-Black, UK managing director of Manhattan Associates. “The only way to solve this is for retailers to have a single inventory pool, which allows order management systems to tap into any stock holding, at any location and assess the viability and profitability of using it to fulfil a specific order. In their focus areas for the next 6-9 months, retailers are recognising that they need to become much smarter in the way they approach the order fulfilment process.”
These are problems worth solving, however. While only one fifth of retailers say that they have accurate visibility of stock all of the time, 83% of shoppers say that they would be more loyal to a company that reliably delivers their products.
“Those retailers that can’t fulfil quickly may lose out to the speedier competition, but the real winners will be those that can execute on the fulfilment promise profitably,” said Sears-Black.
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