More than 55% of customers are using multiple channels such as online and mobile to shop, yet over 40% of retailers describe fulfillment costs as a major challenge impacting their business. The average cost for the company to fulfill an order is staggering at 70% of the average order value.
The findings come from a Radial & EKN Research study revealing the complexities associated with shipping and fulfillment are eroding profitability for retail companies.
Two out three CEOs say that costs to fulfill orders have increased over the past several years, with 37% citing that inventory order and supply chain operations are not properly aligned and are therefore driving up costs.
In an effort to marry customer expectations with back-end efficiency, retailers have adopted a number of tactics including non-traditional shipping solutions, like “buy online, pick up in store” and “buy online, ship from store.”
Unfortunately, despite a small reduction of costs, complexities and hidden fees associated with process inefficiencies persist, including:
• 31% of retailers are challenged with split orders, where multiple products in one order must be shipped from different locations
• 56% of retailers say their order management systems need to be able to process at higher volumes and velocity, and to source from a variety of channels
• 40% of retailers have trouble automating order capture and processing, integrating inventory and standardizing order management from different order types across channels
With more than 35% of retailers still in the planning stages of deploying intelligent order technology, the industry is not moving quickly enough to meet demand in today’s fast-paced retail landscape. By shifting responsibility from the retailer to a fulfillment partner, retailers will be better positioned with a long-term solution for the increasingly complex shipping landscape.