ASCAL Institute

E-Commerce Fulfilment – Global Challenges and Opportunities

With another holiday season fast approaching, it seems that nearly one half of all consumers are going to experience some disappointment with their holiday orders, resulting in frustration and dissatisfaction in their overall online shopping experience. Despite retailer’s best efforts, a shocking 47% of consumers say they faced challenges related to shipping when making holiday purchases last year, suffering issues such as tracking inaccuracies, non-transparent return policies, wrong shipped items, items shipped to the wrong address, or duty and tax miscalculation. This is the finding of Pitney Bowes 2017 Global e-Commerce Study, which reveals that 94% of consumers have made an online purchase domestically within the last year, and 70% of consumers have made a cross-border purchase, amid a trend of declining year-on-year delivery satisfaction rates. With Pitney Bowes annual Parcel Shipping Index forecasting a 20% increase in global parcel volumes in 2018, retailers are beginning to recognise the growth opportunity in cross-border e-commerce, but despite the frenzy to capture market share, retailers still have a long way to go toward meeting consumer expectations, particularly when it comes to the post-purchase experience for online shoppers. The modern consumer is becoming increasingly sophisticated, informed, and demanding; seeking out value, convenience and speed on a global scale. At the same time, consumers tolerance for error or failure is diminishing. In the new world of the omni-channel supply chain, consumers now expect an array of options when it comes to shipping, collecting, or returning their purchases. This includes:
  • Standard shipping free of cost
  • Express shipping at a nominal cost
  • Shipping to e-lockers
  • Shipping to locations other than the buyer’s home
  • Returning unwanted purchases in-store, and returning unwanted purchases using pre-paid shipping labels
  • “Click-and-collect”; purchasing online and picking up in store, now common practice for 40% of global online shoppers
With shipping costs and return policies revealed as the leading factors deterring consumers from making international purchases, it is clear that delivery experiences and speed of fulfilment play a key role in securing and retaining new customers and promoting a long-term relationship. Shipping has become not only an extension of a retailer’s own brand but can make the difference between a single purchase and a repeat customer. And in addition to the retailer’s key focus of improving speed and convenience of delivery for the consumer, they are challenged with lowering operational costs in inventory, labour and transportation in order to remain price competitive. This requires technology capable of real-time visibility and coordination along the entire supply chain, complemented by automation to ensure maximum responsiveness. This, in conjunction with a combination of Lean and Agile logistics practices at tactical points along the supply chain, creates a supply chain capable of satisfying and even exceeding consumer expectations. The challenge here is that the life cycle of technology and automation has accelerated to the point where very short ROI periods are essential. Whilst the landscape of e-commerce may seem abundant with opportunity, it is extraordinarily competitive, and retailers must continuously improve their tactics and service offerings, with initiatives such as:
  • Low cost, fast, flexible and accurate shipping as key to attracting and retaining customers
  • Personal customer information management solutions that aggregate a single view of the customer
  • Wide product assortment and timely promotions
  • Simple, fast and secure checkout
  • Minimised returns. The faster the delivery, the less likelihood of returns (making it difficult to return simply deters customers from purchasing).
  • Cross-border appeal, but localised marketing and customer care
  • Target the cross-border markets more likely to shop cross-border, rather than those nearby. Pitney Bowes reveals vast differences in consumer behaviours between countries.
  • “In-Store Global. Online Local” shopping suggests retailers who have bricks-and-mortar stores can create a future cross-border shopper with the tourist who visit their locations. About two-thirds of consumers (63%) who have shopped across border are now participating in this trend
Where some see challenges, others see opportunities. Online retailers who have focussed predominantly on their marketing are now finding themselves restricted by the limitations of their supply chains. But their supply chains can be turned into a point of strength and competitive advantage, with a precise blend of strategic responsiveness and efficiency in their supply chain strategy. Successful omni-supply chains are very complex, and whilst many enterprises lack the expertise that is required to excel, engaging suitably qualified and experienced supply chain consultants can bring that expertise at a fraction of the price and time that recruiting a full time professional would demand.

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